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China's richest citizens are even wealthier than the statistics suggest, and may hold as much as 9.3 trln yuan ($1.4 trln) of hidden assets, according to a Credit Suisse-sponsored study by a top economic think-tank.
Official statistics for 2008 failed to capture income equivalent to about 30% of China's gross domestic product, the "Analysing Chinese Grey Income" report found.
And nearly two thirds of that unreported income goes into the pockets of the richest 10%, widening China's already troubling wealth gap, said Wang Xiaolu, the economist at the China Society of Economic Reform (CSER), who headed the survey.
The findings may explain in part Beijing's tolerance of recent strikes in manufacturing zones, and official emphasis on ensuring more equitable division of wealth.
Average per-capital income for the richest 10%, at 97,000 yuan, was 65 times that of the poorest 10%, Wang's survey showed — instead of the 23 times figure given by official National Statistics Bureau's household income survey.
"It means the wealth gap is widening, and the distribution of national income is becoming more and more unfair," it concluded.
A fairer income distribution could ease social tensions and support Beijing's plan to boost domestic consumption.
"One very interesting observation to argue for the highly uneven income distribution in China is reflected in the strong buying power of its richest people," the report said.
China accounted for 3% of sales for a brand like Volkswagen and 5% for Pepsi, while for luxury retailers like Richemont and Swatch Group, it made up 20 and 28%, respectively.
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The team that did the research chose an unusual method to counter a perceived tendency, particularly among high-income families, to lie about the "grey income" that makes up the majority of their earnings.
They contacted only family, friends and colleagues, who would be more likely to tell the truth, trust that data would be kept anonymous and whose answers could more easily be assessed for veracity.
The report suggested actual urban income was around double official levels.
The grey income comes from sources including stock market manipulation, property deals, vast bonuses from state-owned firms with a monopoly on the market, and even large wedding and other gifts to powerful officials and their relatives.
"Grey money is usually closely connected to the following: corruption, abuse of power, public investment, shares in land development (projects) and other monopoly interests," Wang told the Beijing Evening News.
