Illicit $1.25 trillion smuggled out of China

China saw an estimated $1.25 trillion leaving its borders illegally from 2003 through 2012, leading the way among developing countries and accounting for almost one fifth of the flight of illicit capital from the developing world, a report showed on Monday.

The report "Illicit Financial Flows from Developing Countries: 2003-2012" was the latest annual study by Washington-based think-tank Global Financial Integrity (GFI). It reveals that $6.6 trillion worth of illicit money flew from developing economies between 2003 and 2012, at a staggering average rate of 9.4 percent per year.

Illicit Financial Flows from Developing Countries: 2003-2012 (in millions of US dollars, nominal)

Source: Global Financial Integrity?

China's illicit outflows in 2012 reached $249.5 billion, increasing 53 percent from the previous year. In the stated 10 years except 2011, China ranked as the biggest exporter of illicit capital among 151 monitored developing economies.

 

Illicit Financial Outflows from the Top 10 Developing Economies, 2003-2012 (in millions of US dollars, nominal)

Source: Global Financial Integrity?

The total amount of $1.25 trillion capital which fled from China in ten years is equivalent to 15 percent of its GDP in 2012, surpassing the volume of GDP generated by first industry that year.

The GFI research found that fraudulent misinvoicing of trade transactions, including crimes such as corruption and tax evasion, take up the majority of 77.8 percent of illicit financial outflows.

Components of Illicit Financial Outflows: 2003-2012 (in millions of US dollars, nominal)

Source: Global Financial Integrity?

As of Dec 4, Chinese police have repatriated 428 suspected economic fugitives amid the "Fox Hunt 2014" campaign that began in July. Of those seized, 141 were involved in economic crimes involving over 10 million yuan ($1.63 million dollars).