November 14, 2013

Bribes and hidden transaction make up at least 12% of China Economy and are not included in official GDP

China’s hidden household income totaled over 6.2 trillion yuan in 2011– accounting for 12 per cent of the country’s GDP – underlining the widespread impression corruption represents a “serious challenge” to society, a state-backed foundation’s study says.

Most of this undeclared personal or household income comes from undocumented sources and is held by a few individuals.

The study results estimated the 2012 per capita income of the richest 10 per cent of the urban population at 188,000 yuan – 3.2 times more than the official figure. The urban rich make almost 21 times more than the poorest members of society. Official figures placed the gap at 8.6 times.

The study concluded hidden income contributed to the huge gap between official figures and those generated by the survey.

“Corruption’s impact on society is expanding, posing a serious challenge to society,” Caixin quoted from the report.

Hidden income, also known as ‘grey income’, includes earnings ranging from utterly illegal activities such as bribes and off-book transactions, to gifts innocently given by parents to teachers.

The Translated Caixin article is here

A 2010 Credit Suisse study suggested that Chinese households are hiding 9.3 trillion yuan of grey income

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