Around 16 to 18 thousand corrupt officials have fled the country with up to 800 billion yuan ($123 billion) since the 1990s, according to a report released Tuesday on the website of the People's Bank of China, the central bank.
The report, based on case studies of illegal assets monitored by the central bank, said Chinese officials who committed economic crimes began to flee the country in the late 1980s.
According to the report, there are four ways for corrupt officials to transfer their assets without getting caught: cash smuggling, using offshore financial centers, taking bribes in foreign countries, and transferring assets through "middle men" located in foreign countries.
Cash smuggling
Traveling to other countries with cash hidden in one's suitcase or handbag is the most direct way for corrupt officials to transfer money overseas.
It is suspicious enough for high-ranking officials or company executives to travel overseas too often. Therefore, many underground agents have provided smuggling services for those who need to move assets.
These agents use "water-boys"(shui ke) to take small amounts of money overseas. The method is cheap but risky, especially if the money is confiscated by customs, but is the hardest for banks to trace.
Using offshore financial centers
This method is mainly used by executives of listed or state-owned companies, who transfer company assets to an offshore financial center before destroying evidence and eliminating all traces.
Taking bribes in foreign countries
Accepting bribes in other countries has become prevalent among corrupt officials, since many Chinese firms have begun investing or opening branches abroad. This type of bribery, conducted in a "black box" style, has become more subtle than receiving money or illegal commissions. Sometimes it can be as simple as an arrangement for the official or executive's child to study abroad.
Using a middle man
Transferring money through a relative living or studying abroad is an old trick used mostly by corrupt local government officials. Some of the middle men even open companies for money laundering.
The report showed that the amount of assets and the ranks of the officials were relevant to the countries they fled to: low-ranking officials or company managers tend to choose countries close to China, such as Russia, Malaysia or Thailand, while high-ranking corrupt officials with huge illegal assets prefer developed countries such as the US, Canada or Australia.
The central bank suggested in the report that an international cooperation mechanism should be established between corruption watchdogs, customs and banks in order to prevent corrupt officials from transferring assets.
