Official statistics for 2008 failed to capture income
equivalent to about 30 percent of China's gross domestic product, the
"Analyzing Chinese Grey Income" report found.
And nearly two thirds of that unreported income goes into
the pockets of the richest 10 percent, widening China's already troubling
wealth gap, said Wang Xiaolu, the economist at the China Society of Economic
Reform (CSER), who headed the survey.
The findings may explain in part Beijing's tolerance of
recent strikes in manufacturing zones, and official emphasis on ensuring more
equitable division of wealth, the report added.
Average per-capita income for the richest 10 percent, at
97,000 yuan, was 65 times of that of the poorest 10 percent, Wang's survey
showed - instead of the 23 times figure given by official National Statistics
Bureau's household income survey.
"It means the wealth gap is widening, and the
distribution of national income is becoming more and more unfair," it
concluded.
A fairer income distribution could ease social tensions
and support Beijing's plan to boost domestic consumption.
"One very interesting observation to argue for the
highly uneven income distribution in China is reflected in the strong buying
power of its richest people," the report said.
China accounted for 3 percent of sales for a brand like
Volkswagen and 5 percent for Pepsi, while for luxury retailers like Richemont
and Swatch Group, it made up 20 and 28 percent respectively.
"So if income distribution becomes more equitable,
it would help boost the consumer market."
The team that did the research chose an unusual method to
counter a perceived tendency, particularly among high-income families, to lie
about the "grey income" that makes up the majority of their earnings.
The survey team contacted only family, friends and
colleagues, who would be more likely to tell the truth, trust that data would
be kept anonymous and whose answers could more easily be assessed for veracity.
The report suggested actual urban income was around
double official levels. The gap between earnings recorded in National Bureau of
Statistics Data, and Chinese citizens' real earnings and assets, also grew
rapidly from the "middle income group" and up, to become a yawning
gulf for the richest.
The grey income comes from sources including stock market
manipulation, property deals, vast bonuses from state-owned firms with a
monopoly on the market, and even large wedding and other gifts to powerful
officials and their relatives.
"Grey money is usually closely connected to the
following: Corruption, abuse of power, public investment, shares in land
development (projects) and other monopoly interests," Wang told the
Beijing Evening News.
The report predicted stronger government efforts to
rebalance income, because of the negative impact of the yawning gap on both
stability and economic growth.
"It is very likely that unlike normal capital
return, grey income usually does not help improve competitiveness and
efficiency," the report said.
"On the contrary, a large amount of it is likely to
come from loss of enterprise and government income or usurpation and plunder of
ordinary household income and property. This hampers justice, undermines
economic efficiency and becomes a major factor for social conflict and
instability."
