China’s Rich Have $1.1 Trillion in Hidden Income, Study Finds
Posted by Author on August 16, 2010
By Bloomberg News – Aug 11, 2010 –
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 findings indicate China’s wealth gap between rich and poor, already one of the world’s highest, is even wider than official figures show. Reducing income disparities is a top goal of President Hu Jintao and Premier Wen Jiabao, who want to stave off riots, strikes and other social unrest that might threaten the six-decade rule of the Communist Party.
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.
“Once government power is united with capital, the free competition of the market economy begins to be replaced by a monopoly of crony capitalism, leading to disparity in income and property distribution, lower economic efficiency and acute social conflicts,” Wang wrote in his report’s conclusion.
The study, compiled in 2009, is based on interviews with families in more than 4,000 urban households in 64 cities and 19 provinces, and uses 2008 data. …...(more details from The Bloomberg)
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This entry was posted on August 16, 2010 at 6:40 pm and is filed under China, corruption, Economy, GDP, income, Law, Life, News, Official, People, Social, World. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.
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