China’s Rich Have $1.1 Trillion in Hidden Income
China’s households hide as much as 9.3 trillion yuan ($1.4 trillion) of income that is not reported in official figures, with 80 percent accrued by the wealthiest people, a study showed.
The money, much of it likely “illegal or quasi-illegal,” equates to about 30 percent of China’s gross domestic product, the study, conducted for Credit Suisse AG and published last week by the China Reform Foundation, found. The average urban disposable household income in China is 32,154 yuan, or 90 percent more than official figures, according to the report.
Most of that extra cash is going to the wealthiest families. The top 10 percent of China’s households take in 139,000 yuan a year, more than triple the official figures, according to the Credit Suisse report. In contrast, the bottom 10 percent earns 5,350 yuan, or 13 percent more. The top 20 percent of households account for 81.3 percent of total hidden income, according to the study, written by Wang Xiaolu of the Beijing-based foundation.
The “grey income” comes from many sources, including gifts to officials at weddings, profits from land transfers, kickbacks from construction projects, and payoffs from state monopolies such as the tobacco industry, the study said.