Sunday, January 27, 2013

Corrupt Chinese Officials Panic Selling (UPDATED)

But still buying gangbusters in California

The great China corruption fire sale
Thousands of Chinese communist officials have been panicked into a fire sale of their illicit properties and billions of pounds have been smuggled overseas as the country's new leaders intensify a campaign to root out corruption.
The CDIC report, which was obtained by the Economic Observer newspaper, suggested that nearly 10,000 luxurious homes had been sold by officials in Guangzhou and Shanghai last year. It also claimed that $US 1 trillion, equivalent to 40 per cent of Britain's annual gross domestic product, had been smuggled out of China illegally in 2012. Economists and experts cast doubt on the figure, but said the flow of money was dramatic. Li Chengyan, a professor at Peking University, suggested that about 10,000 officials had absconded from China with as much as pounds $US100 billion.
The CDIC said 1,100 government officials had fled China during last year's national holidays in October and that 714 had been successful in getting away. In the United States, the National Association of Realtors said properties worth more than $US7 billion had been bought by Chinese in the US last year. Some high-end homes were now built for rich Chinese, with ponds for koi carp and a second kitchen for pungent cooking.

The threat stated in the above article came from the creation of a property database. Officials Offload Property Original article in the Economic Observer
According to a university professor who has been helping a city government in Anhui Province set up a home ownership database, officials with a greater degree of political awareness are unwilling to deal with the new property register.

The professor didn't give a clear response when asked why anyone would refuse the simple task of entering data into a computer. Instead, he tactfully noted that "The best solution to the problem is to pass the work on to a university, get them to submit a report, and, once funds have been allocated, find some students to do the work. In this way, both research and work can be done, and they won't have to worry about the risk of leaking information."
A person in charge of a real estate agency told the Economic Observer that since November last year, the instances of officials hurriedly offloading their properties had increased around the country, and these properties are often luxury residences, sometimes worth more than 10 million yuan if they're located in first-tier cities.

Only a portion of these houses are being sold through real estate agents.

Some property owners prefer to let state-owned institutions or even professional agents handle the sale. In this way, they won't need to expose themselves during any part of the process.

According to statistics posted on the website of the Beijing Municipal Commission of Housing and Urban-Rural Development, 7,940 contracts for second-hand housing deals had been signed in the first half of January 2013, an increase of 360 percent over the number of transactions completed in the capital over the same period last year.
Hat tip: UBC in Crisis Mode commenting at

No comments: