A new study has shown that up to US$1.4 trillion in household income in China is not reported in official figures, Bloomberg reported. The report, published by the China Reform Foundation, found that more than 80% of the undeclared income was earned by the top 20% of China’s households. The total value of undeclared income is equal to about 30% of China’s GDP; it comes from a variety of sources, including gifts, kickbacks, payoffs and profits from land transfers. The study helps to explain the rapidly growing spending on luxury consumer goods, but indicates a growing wealth gap between China’s rich and poor, analysts said.
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