After over three months of silence, there’s speculation that Chinese actress Fan Bingbing 范冰冰 has been arrested. According to a now-deleted news report from Securities Daily last Thursday, Fan was apprehended and is currently under investigation for tax evasion. She has been accused of taking advantage of a dual-contract system that gives Chinese actors something called a “yin-yang contract,” essentially an official contract and an unofficial one that’s off the books.
The “yin-yang contract,” however, isn’t the only reason for Fan’s arrest. The actress, who has been repeatedly listed by Forbes as China’s highest-paying actress in the past few years, was also accused of several other crimes, including illegal bank lending and other corrupt practices.
“The yin-yang contract is only the tip of the iceberg,” read the Securities Daily report. Several of Fan’s films and TV series, including The Legend of Ba Qing (巴清传 bā qīng chuán) and L.O.R.D: Legend of Ravaging Dynasties 2 (爵迹2 jué jī 2), have been placed in limbo because of her tax evasion scandal. Before the scandal, however, the former already had its premiere delayed because of sex abuse allegations surrounding its male lead, Yunxiang Gao 高云翔.
Fan’s arrest has not been corroborated by any other news outlet, and the deletion of the Securities Daily article has only fueled speculation of the actress’s whereabouts. A day after Securities Daily’s report, news site iFeng reported that all of the offices at Fan Bingbing’s studio had been cleared out. The explanation given was that the office is currently going through a cleaning and that the workers will soon return. Fan Bingbing’s social media account has been inactive since the accusations began — her last Weibo post was on June 2 — and in late August, there was speculation that she had been given a three-year ban from acting. Those rumors, however, have never been substantiated.
Controversies surrounding Fan’s sky-high pay rates and the prevalence of “yin-yang contracts” in China’s entertainment industry were ignited earlier this year. On May 28, TV host Cui Yongyuan 崔永元 posted an image of Fan Bingbing’s employment contract on his Weibo account. According to the contract, the actress would earn $1.6 million (10 million RMB) for her work on an unidentified production. The next day, Cui followed up with an equally explosive Weibo post saying Fan had two contracts drawn up, one promising $1.6 million (10 million RMB) in salary and the other contract, the “hidden” one, guaranteeing $7.8 million (50 million RMB), for merely “four days of work.”
Cui’s revelations have led to seismic changes in China’s movie and TV industries. To clamp down on tax evasion, the government has implemented new policies on taxation. According to the new regulations, which went into effect on August 1, the tax rates on celebrities has risen to a considerably high 42 percent. Before the crackdown, tax rates were as low as 6.7 percent, and corporations founded by China’s stars enjoyed many perks and celebrity-friendly tax policies. The new rules on taxation have led to many studios scrambling to pay their overdue taxes, and is even rumored to have bankrupt certain film companies.
In addition to changes in tax policies, the government has also imposed salary caps upon Chinese celebrities. On June 27, five state bodies, including the propaganda department, the State Administration of Radio and Television, and the State Department of Taxation, issued a notice capping star salaries. According to the directive, lead actors cannot be paid more than 70 percent of the cast’s total wages. Cast remunerations also aren’t allowed to exceed 40 percent of production costs.
On August 10, iQiyi, Youku, and Tencent — three of the largest streaming sites in China — announced that they would implement their own salary cap upon performers. The announcement stated that the wages of individual celebrities will no longer be allowed to exceed 1 million RMB ($147,000) per episode and 50 million RMB ($7.35 million) per production. The pay cuts, imposed by the government and the industry, have had a noticeable chilling effect upon China’s entertainment sector. Several TV and film productions have been halted as actors are apprehensive about signing new employment contracts in this new, stringent state of business.