It is not new that the Chinese elites have been taking their money and running when they can. The Chinese have fueled the Australian and Canadian housing markets and helped the housing market rebound in California. The American national association of realtors is not subject to money laundering laws, so buy in cash Mr. Yee. The ICIJ had an in depth report on the trillions stashed abroad by China's oligarchs. These are the princelings, the red nobility and the movers and shakers in Chinese business and government circles. With the assistance of Western bankers, the Chinese well connected park their cash on tiny islands around the world. The fees and commissions bankers earn on this money helps their bottom line, and reinforces the idea that the good old USA is the best place for criminal consulting. The ICIJ report was blocked in China, but it laid bare the credibility trap that these elites are in with their wealth connected to their political ties and corruption. An interesting figure was revealed,
Chinese officials aren’t required to disclose their assets publicly and until now citizens have remained largely in the dark about the parallel economy that can allow the powerful and well-connected to avoid taxes and keep their dealings secret. By some estimates, between $1 trillion and $4 trillion in untraced assets have left the country since 2000.
The Chinese GDP is $8 trillion, so whether $1 or $4 trillion, we are discussing a giant chunk of the economy. This is an economy where GDP is calculated not on final sales but on if it is built. Those ghost cities count towards GDP even if no one lives in them. The Chinese are still building. It's still the same confiscate peasants' land, build commercial or industrial project, collect fees and bribes, rinse lather repeat. They cannot change the system because they are rich from the system, but to reveal the workings of the system would risk all.
That sounds like the American political economy. One big difference. Zhou Zhengyi, pictured above, sits in jail. His billions are untouched. He has had over 300 relatives, friends and political connections investigated. He is not alone. Li Peiying was executed in 2009 on corruption charges. The Chinese jail and kill corrupt cronies, not all, but enough to create public examples. This example making will be needed if their bubble pops. Xi Jinping is the leader of the new ruling clique, so the corrupt cronies of the former cadre may be a convenient source for targets. Xi is going to need a useful villain for the people when the Ponzi ends to distract the population from wanting to replace the barrel. If successful enough, they will not have to start a war with Japan. America's oligarchs never go to jail, watch over a rotting barrel and are always itching to start wars.