Corruption in China: $124 billion over 15 years

I recently came across an article from a China Pollyanna who claims that China’s government spending has generated “greater business efficiency”. (not Jim Rogers)

This reminds me of how bubble markets operate; euphoria tends to rationalize developments as predominantly positive.

As Japan’s bubble experience reveals, which this New York Times article narrates,

In the 1980s, Japan's growing middle class lived large, flying by the planeload on flashy shopping trips to Paris and snapping up luxury condominiums in New York and Hawaii. While today the U.S. is concerned about the challenge from China, 20 years ago it was Japan that had Americans nervous. Economists predicted that Japan would replace the U.S. as the world's largest economy by 2010.

We know where Japan’s economy stands today.

And so how efficient has China government’s spending been?

$124 billion funneled to the pockets of politicians and bureaucrats!

From the Financial Times,

Corrupt Chinese officials smuggled an estimated Rmb800bn ($123.6bn) of ill-gotten gains out of the country over a 15-year period, according to a report released by China’s central bank.

Around 17,000 Communist party cadres, police, judicial officers and state-owned enterprise executives fled the country between the mid-1990s and 2008, the 67-page report said.

For higher-ranking officials who managed to abscond with large amounts of money, the ÛS was the favourite destination, while Canada, Australia and the Netherlands were also popular. Those who could not immediately secure visas for western countries often chose to stay in small countries in eastern Europe, Latin America and Africa while they waited for a chance to move to their final intended destination.

Lower-ranking officials tended to escape to countries bordering China, the report said. The independently administered Chinese territory of Hong Kong was also a popular transit point.

The report, stamped “internal materials, store carefully” and compiled in June 2008, was published on the website of the central bank’s anti-money ­laundering bureau this week. The bureau took the report down after it generated a public outcry.

Well, many in the Chinese government have indeed been very efficient in pocketing of other people’s money.

It's no different when a recent report shows that $6 billion worth of reconstruction funds were reportedly lost by both the Iraqi and the US government.

The common denominator is that government is very efficient in wasting and or in purloining of taxpayers resources.