What is notable, if not unexpected, is just how pervasive the parking of offshore capital has been, and confirms that it is not inflow of money that the PBOC has to be afraid of when its internationalizes the Yuan, it is the outflow that will be far more worrisome.
The data illustrates the outsized dependency of the world’s second largest economy on tiny islands thousands of miles away. As the country has moved from an insular communist system to a socialist/capitalist hybrid, China has become a leading market for offshore havens that peddle secrecy, tax shelters and streamlined international deal making.
Every corner of China’s economy, from oil to green energy and from mining to arms trading, appears in the ICIJ data.
But the biggest stunner is the sheer size of the wealth transfer: according to ICIJ estimate, up to $4 trillion in "untraced assets" may have left China since 2000.
Chinese officials aren’t required to disclose their assets publicly and until now citizens have remained largely in the dark about the parallel economy that can allow the powerful and well-connected to avoid taxes and keep their dealings secret. By some estimates, between $1 trillion and $4 trillion in untraced assets have left the country since 2000.
And while the parking of capital abroad is not illegal, it does contribute to concerns about vast corruption in China, which is also why the current Politburo has been scrambling to cut down on superficial among China's higher echelons. At least optically... And certainly not going to the very top, where it appears the bulk of the corruption resides as the initial data dump discloses.
To be sure, this is just the start of peeling away the layers of China's offshore wealth: the ICIJ provides this teaser: "Along with the China and Hong Kong names, ICIJ’s files also include the names of roughly 16,000 offshore clients from Taiwan. ICIJ will continue to publish stories with its partners in the next few days and will release the Greater China names on its Offshore Leaks Database on Jan. 23."