Moving to a Neighborhood Near You

China’s ‘naked officials’ are preparing to flee, and taking the nation’s wealth along

By Jane Lin
Epoch Times Staff
Created: December 13, 2012 Last Updated: December 13, 2012
Related articles: Opinion » Thinking About China
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(Jeff Nenarella/The Epoch Times)

(Jeff Nenarella/The Epoch Times)

High-level Communist Party official Wang Guoqiang fled China in April with his wife and around 200 million yuan (US$31 million). The case came to light in August, provoking an outraged public response.

Wang, the Communist Party secretary of Fengcheng, a city of about 560,000 people in Liaoning Province, is just one of thousands of corrupt officials—called “naked officials”—who have fled China, or have plans to flee, with millions of dollars.

The term “naked official” refers to a Communist Party cadre who has sent his family and assets abroad, and is ready to leave the country when the time is right.

The amounts taken out of the country are staggering, although the estimates of the total amount differ among sources.

According to an Oct. 25 report by Global Financial Integrity, the Chinese economy hemorrhaged US$3.79 trillion in illicit financial outflows from 2000 through 2011.

In 2011 the People’s Bank of China estimated that since the mid-1990s, from approximately 16,000 to 18,000 officials had escaped with around 800 billion yuan (US$128 billion) as they fled China or went missing.

Li Chengyan, a research director at Peking University, said that around 10,000 Party officials have already left China with a trillion yuan ($160 billion), an average of about $16 million per official.

“In many cases, officials fled with several hundred million yuan each,” Li told the Economic Weekly.

About 1.18 million “naked officials” and their relatives set up permanent residence in foreign countries between 1995 and 2005, according to remarks made in 2010 by Lin Zhe, an anti-corruption expert and professor at the Central Party School.

Almost half of all civil servants don’t think the idea of fleeing China is too bad, while nearly 75 percent of higher ranking officials, who are above the level of departmental head, acknowledged the need to be “naked officials,” according to the “2012 Rule of Law Blue Book” issued by the Institute of Law at the Chinese Academy of Social Sciences.

The “Blue Book” reports, taken together, demonstrate that while Party officials wield power in China, they have no real sense of security there, columnist Jia Jia wrote in an article published by the Southern Metropolis Daily on Feb. 22.

“It also means that if Party rule weakens and China faces major social changes, the official has an easy way out,” Jia added.

In addition to Party officials, the smart money is also fleeing China.

According to the “Hurun Wealth Report 2012” published in late July, more than 85 percent of Chinese millionaires and 90 percent of billionaires are planning to send their children abroad for education; more than 16 percent of Chinese millionaires have already emigrated or have already submitted applications to do so, while 44 percent have plans to do so in the near future.

Victor Shih of Northwestern University estimated that the richest 1 percent of Chinese households own between $2 trillion and $5 trillion in property and liquid assets, and that if they were to take flight, the capital they pull out could threaten even China’s vast foreign exchange reserves.

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