Wednesday, August 11, 2010

China: corruption and the wealth gap

Nothing is new here. The same script was used in Chinese society when the KMT was running the country, and before than the Manchus and before that the Ming dynasty etc., People should be very vigilant against an overboard optimism of this giant country.

Excerpts from a WSJ article I just read.

Most of that extra wealth lies with the already-rich, widening income inequality beyond that suggested by official figures. This crowd is often supplementing its earnings with 'gray' income which can include kickbacks, bribes and the like.

and more...

Behind this official underestimate of Chinese household wealth lies what Wang terms 'gray' income, such as government and party officials receiving outsize cash gifts when their offspring marry, or benefiting from a bit of insider trading in the property market, or receiving under-the-table payments in return for favorable treatment. Such items contributed to total hidden income in 2008 of nearly $1.4 trillion, equivalent to roughly 30% of China's GDP.

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