- Global Financial Integrity estimate is for 10 years to 2013
- Almost $8 trillion exited developing nations in that period
China’s illicit financial outflows were estimated at almost $1.4 trillion over a decade, the largest amount for any developing nation, as money exited the country through channels including fake documentation on trade deals.
The estimate for the 10 years through 2013 was published Wednesday by Global Financial Integrity, a Washington-based group researching cross-border money transfers. The study is based on data reported to the International Monetary Fund and covers money which GFI believes to be illegally earned, transferred or utilized.
Money flowing out of China this year has helped to pump up property markets from Sydney to Vancouver, while prospects for a weaker yuan may drive more cash abroad. On Wednesday, China cut the currency’s reference rate to the weakest since 2011.
The bulk of $7.8 trillion of illicit money that exited developing nations over the 10-year period was disguised as trade through fake invoicing, the report said. That’s a method that was highlighted in China in 2013 when the government cracked down on false documentation that was hiding money flows and distorting the nation’s trade data.
While citizens are officially limited to converting $50,000 per person a year, a range of tools exist for getting around that restriction, from pooling quotas to transactions through so-called underground banks.