90 Percent of China’s Billionaires are Children of Senior Officials
According to a research report, 90 percent of China’s billionaires are children of senior officials. There are about 2,900 senior officials’ children in China, with total wealth amounting to two trillion yuan. Their businesses mainly cover 5 areas: finance, foreign trade, land development, large-scale projects, and bonds and securities. They either own their businesses or are senior managers in big companies.
Hong Kong-based Singtao Daily published the results of the research, which it said was conducted by the Research Office of the State Council, China Academy of Social Science, and the Research Office of the Party School.
The World Executive (‰∏ñÁïåÁªèÁêÜ‰∫∫), a Chinese-language magazine, also quoted the report, saying that by March of 2006, 27,310 people own private property worth more than 50 million yuan, and 3,220 own more than 100 million worth. Of the latter group, 2,932 out of 3,220 are children of senior officials. They are spread in eight provinces: Guangdong: 1,566; Zhejiang: 462; Shanghai: 225; Beijing: 195; Jiangsu: 172; Shandong: 141; Fujian: 92; and Liaoning: 79.
The main sources of those billionaires’ wealth are:
1. Legal or illegal commissions from introducing foreign investments
2. Importing facilities and equipment with above-average prices. The import prices are usually 60 percent to 300 percent higher than market prices.
3. Exporting domestic resources and merchandise that they monopolize
4. Developing and selling land with bank loans and zero costs. Twelve large property developers in Guangdong Province are owned by senior officials’ children. In Shanghai, nine of the ten largest property developers are owned by senior officials’ children. In Jiangsu, children of senior officials control the 22 largest property developers and the 15 largest project contractors
5. Smuggling, tax evasion. About 30,000 to 40,000 cars are smuggled every year
6. Obtaining and pocketing loans from banks without collateral. This is one of the main reasons for the mounting non-performance loans in China’s banks
7. Contracting large-scale infrastructure projects. Eighty-five percent of freeways were contracted by private companies, which were owned by children of senior officials. One can reap seven million to eleven million yuan from constructing one kilometer of freeway
8. Appropriating from public accounts to private accounts, usually with the help of financial institutions
9. Monopolizing stock markets, generating false information
-Click here to read the news story (Chinese).