30% of Chinese GDP off the Books

A new study from Credit Suisse and Beijing think-tank China Reform Foundation shows that China is richer -- and much more unequal -- than official figures show. Chinese citizens hide 9.3 trillion yuan (or about USD$1.4 trillion), most of it "illegal or quazi-legal" from sources like kickbacks and payoffs. The distribution of the hidden wealth is highly-skewed; the richest 10% of households have triple the income reported by official figures, the poorest 10% just 13% more. The official gap between the rich and the poor in China is high, and this study suggests that actual income inequality might be much greater.

According to Weng Xiaolu, the study's author, suggests that corruption and state capitalist are to blame for the hidden and unequally distributed income, a view echoed by Bloomberg News which fears that increasing inequality could bring social unrest to China.
SSDAN Office

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