NewChina is biggest exporter of illicit capital, says watchdog group

The South China Morning Post discusses the implications of the ICIJ leak with Clark Gascoigne, spokesperson for the Washington DC-based think tank Global Financial Integrity (GFI), which has been tracking global illicit money flows since 2006.

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Hong Kong is a hub of illicit financial outflows from the mainland, says Global Financial Integrity. Photo: SCMP Pictures

Published: 10:45am, 22 Jan 2014Updated: 3:01pm, 5 Apr 2016

On Wednesday, a group of investigative journalists released the initial results of an investigation into some 20,000 offshore bank accounts by people with addresses in Hong Kong and the mainland.

The South China Morning Post discussed the implications of the leak with Clark Gascoigne, spokesperson for the Washington DC-based think tank Global Financial Integrity (GFI), which has been tracking global illicit money flows since 2006.

What was your initial reaction to the report on the Chinese offshore accounts?

We are not surprised by the findings of the ICIJ investigation. Indeed, GFI estimates that more than US$1 trillion flowed illicitly out of China between 2002 and 2011, the most recent year for which reliable data is available.

While China is not unique in suffering from the consequences of illicit flows – we estimate that roughly US$6 trillion flowed out of the developing world between 2002 to 2011 – China is the biggest exporter of illicit capital, ahead of Russia (US$880.96 billion) and Mexico (US$461.86 billion).

What implications does offshore banking have on the Chinese economy?