There was another chapter in the China Kleotocracy story the past week. Western press reported on a fellow by the name of Wang Guoqiang. Wang fled China with $30Mn in his pocket back in April. The problem is that the loot was stolen from the treasury of the city of Fencheng (Pop. 580,000).
The BBC and the Neue Zurcher Zeitung had the story. (I did not see it in the US press.):
More than a million public servants have sent large sums abroad.
A million public servants? That's a lot of crooks.
That officials create huge amounts abroad and then flee with their families is so common that the Chinese language has its own term: "Luo guan" literally "bare squad".
It is the practice that corrupt officials get their families out of the country first, hence the term "bare." I think this means that the Chinese are broadly aware that their political leaders are leaving the country with stolen money. It must be hard to govern when even slang language reflects what is happening.
In 2011, the Central Bank reported that corrupt officials had transferred more than 120 billion U.S. dollars abroad.
$120Bn? Where is this money going?
Popular flight destinations for fleeing officials are the USA, Australia and Canada.
The USA, Australia and Canada? The numbers reported above are huge! let's say 70% of the crooks went to America. This creates an estimate of 700,000 crooks (and their families) that have fled China with $80Bn in stolen money, and are now in the USA. How can so many people with so much money hide in the US without somebody making a a stink?
Think of it differently.
If the Treasurer for the city of Las Vegas (Pop. 580,000) stole $30Mn of tax payer money and fled to Canada or Australia, the US FBI would have the Aussies and Canucks hunt them down and have them extradited back home. Why aren't the Chinese doing the same thing?
The authorities enacted a ban immediately to report on the case, and blocked Wang's name in search engines. However, in blogs, the news spread faster than censors could delete it.
Kleptocracy is a very open secret in China. The Chinese leaders must hate the internet, and the fact that secrets can't be kept secret any longer. There has been another story circulating in the Chinese internet the past few days that may be connected to the kleptocracy story.
On 9/29, China Airline flight 981 from Beijing to NYC was ordered returned to Beijing airport. The "official" reason was, "they had received a threatening message."
There is some curious information about this:
-The plane was 7 hours into the NYC flight before it turned around. If there was a "threat" on board (bomb?), why didn't the plane make a landing before going all the way back to Beijing? The passengers were not told about the U-turn.
One passenger said he suspected the plane might be flying back because of the route information on the screen in front of him but a flight attendant told him there was "something wrong with the screen."
Shortly before landing, there was an announcement that the plane was encountering some turbulence and attendants asked passengers to close all the window shades.
"But when we opened the sunshades again, we saw the ground of Beijing," another passenger said.
-The initial "official information" was that the report of the threat came from a reliable source; the USA. But that was incorrect. (link)
"It could have been forged and released from inside the country", a Beijing airport police spokesman told China Daily on condition of anonymity.
Other sources including the country’s civil aviation authority and airport police, declined on Thursday to reveal specifics of the threat.
The plane and passengers were searched, nothing was found. The flight took off again an hour later. Of potential interest:
Some passengers opted to abandon their trip
Abandon trips? Or get arrested?
I have no idea what actually happened with flight 981. I do know that the internet speculation in China is that the plane was ordered back because another kleptocrat was on board and trying to escape.
A spokesman denied rampant speculation on social-media sites that the flight returned because a wanted corrupt official who was trying to flee the country was on board.
Something is brewing in China with the kleptocrats.The Bo Xilai and the murderess Gu Kailai scandal appears to have been a tipping point. Another tipping point for China is the leadership changes that will take place in October.
I wonder if the exodus of the kleptos (and the Chinese internet traffic on this story) can go unchecked for much longer. The question of "when" might be answered after a new government is installed. I also wonder which banks the Kleptos are keeping their loot with. We might get an answer to these question in the not-too-distant future.
My interest in the kleptocracy story was peaked when I read John Hempton's article on this topic. (Link).