Global Financial Integrity

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Three Reasons TTIP Needs Transparency

The Transatlantic Trade and Investment Partnership seeks to unite U.S. and EU markets: a gigantic trade deal uniting over 800 million consumers across the United States and the European Union, and yet all its important documents remain shielded...

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Tax Havens Are the Biggest Foreign Investor in the United States… Not China

There has been a lot of talk in recent years regarding the extent of China’s investment in the United States. Most of this has been centered on China’s admittedly large holdings of U.S. debt, but the fear has spilled over to other forms of investment as well. A 2012 report filed by the US-China Economic and Security Review Commission, an entity created by Congress in 2000, went as far as recommending that the Committee on Foreign Investment in the US be amended to add a required litmus test for Chinese investment, specifically. This test would make it mandatory to analyze the “net economic benefit” of all proposed Chinese investment in the United States before it is approved.

Being fair, a lot of this has to do with national security, with the rational that Chinese acquisitions of telecommunication companies (for example) might pose a threat to the “cyber and physical infrastructure services critical to maintaining the national defense, continuity of government, economic prosperity, and quality of life in the United States.” How much of this is legitimate I’m not sure of.

Still, does China own an outsized portion of US assets compared to the rest of the world? The short answer is no, not even close.

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US$400 Billion Smuggled into China from Hong Kong through Trade Misinvoicing Since 2006

Fraudulent Trade Misinvoicing Fueling Currency and Housing Speculation within the Country

WASHINGTON, DC – As the Chinese government recently announced moves to crackdown on illicit capital inflows through trade misinvoicing, Global Financial Integrity (GFI) finds that US$400 billion flowed illicitly into China from Hong Kong via trade misinvoicing between 2006 and the first quarter of 2013.  The estimates by Global Financial Integrity were released today in an article by GFI Junior Economist Brian LeBlanc on the website of the Thomson Reuters Foundation.

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Illicit Trade Invoicing Fuels China’s Currency, Housing Speculation

US$400 Billion Smuggled into China from Hong Kong through Trade Misinvoicing Since 2006

China’s regulatory body responsible for managing the country’s foreign exchange reserves (SAFE) announced last month that it was planning to increase enforcement and penalties associated with the abuse of trade payments to mask illicit inflows of foreign exchange. The Wall Street Journal reports that Chinese authorities have uncovered 1,076 instances of false reporting of export invoices by 112 companies, adding up to approximately $2.5 billion. Still, SAFE has not disclosed the severity of the problem nor how it would clamp down on such practices—leaving many questions to be answered. Allusions to “fishy” trade with Hong Kong were given, but specifics were lacking.

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Ahead of Anti-Corruption Day, GFI Reviews the Major Developments of 2012

WASHINGTON, DC – As the world observes International Anti-Corruption Day this Sunday, December 9, 2012, Global Financial Integrity highlighted some of the most notable achievements, developments, and short-comings in the fight against corruption over the past year.

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China: $4 Trillion in Dirty Money Should Worry Us All

Global Financial Integrity’s new report on illicit financial flows from China showed some of the worst numbers that we’ve ever estimated. Crime, corruption, and tax evasion cost the world’s largest country and second-largest economy $3.79 trillion from 2000-2011. To make matters even darker, illicit capital flight is intensifying. In 2011 alone, China lost over $600 billion –more than any other single country lost over a ten year period when Global Financial Integrity estimated illicit financial flows from 2000-2009.

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Chinese Economy Lost $3.79 Trillion in Illicit Financial Outflows Since 2000, Reveals New GFI Report

Fraudulent Mispricing of Trade Accounted for $3.20 Trillion in Illicit Outflows from 2000-2011

Serious Ramifications for “Social and Political Stability”

WASHINGTON, DC – The Chinese economy hemorrhaged US$3.79 trillion in illicit financial outflows from 2000 through 2011, according to a new report [PDF] released today by Global Financial Integrity (GFI), a Washington, DC-based research and advocacy organization.   Amidst increased domestic concern over inequality and corruption, GFI’s study raises serious questions about the stability of the Chinese economy merely two weeks before the once-in-a-decade leadership transition.

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Heywood Death Scandal Puts Focus on Illicit Financial Outflows from World’s 2nd Biggest Economy

China Largest Victim Worldwide of Illicit Outflows; Lost US$2.74 trillion to Crime, Corruption and Tax Evasion from 2000 to 2009

WASHINGTON, DC – As details surfaced today connecting the illicit outflow of assets from China in the suspicious death of British businessman Neil Heywood last November, Global Financial Integrity (GFI) highlighted China’s place as the largest victim of illicit financial outflows.  The latest research from GFI estimates that the Asian nation suffered US$2.74 trillion in illicit financial outflows over the decade ending in 2009, more than quintupling the outflows from the next largest victim of illegal capital flight.

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