Will stashed bribes under the mattress create a shortage of cash in China?

Alia | May 29th, 2014 - 4:06 am

Unlikely…but only for now, because the issue is very real, and it happened once in China’s history. 

Earlier in May, when investigators searched Wei Pengyuan, deputy chief of China’s National Energy Adminstration’s coal bureau, they uncovered more than 100 million yuan ($16 million) in 100-yuan notes. To put the numbers into perspective, that’s 1.15 ton, or 2 cubic meters (just a little bit smaller than a typical restroom in an apartment), of cash.

The amount was even too much for cash-counting machines – 16 were ordered to count the stack, and 4 burned out due to overheating. Many Chinese netizens joked that China should adopt “cash-counting machine” as the new measurement of money when it comes to corrupt officials, as in “He has 2 cash-counting machines of money at home.”

How much is one cash-counting machine? According to a custom service representative at a Chinese cash counter manufacturer, a functioning machine can count at 900 bills per minute for 3 consecutive hours. So…to overheat a cash counter to the point of burning out, one’d at least have 16 million worth of 100-yuan notes – a number that most Chinese could only image to have in dreams.

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And this is not even a stand-alone case. When a deputy director of the People’s Congress Standing Committee in the southern city of Dongguan was investigated, 3 cash-counting machines burned out.

The staggering amount of ill-gotten gains is disturbing enough. What’s more disturbing is the revelation that the art of hiding ill-gotten money may be where most of China’s innovation happens. After all, not everybody has the resource to open a Swiss bank account.

-        A director of a township level transportation bureau in Chongqing was found to hide nearly 10 million yuan in his new home’s restroom, which was first discovered after an “unfortunate” leak.

-        A director of the highway bureau at the city of Ganzhou, Jiangxi province, stored millions of yuan in custom-made propane tanks.

-        An official in charge of immunization planning at the disease control and prevention center in Guangdong province stored 12 million yuan in one of his luxury homes, which totally went moldy when uncovered

-        An official at the urban planning bureau in Jiangsu province put received bribes in sealed bags and hid them in trees, under piles of trash, and even underneath shit holes.

In the Chinese government’s classification of corruption, these are just the “flies”, not even the high-ranking “tigers,” who, supposedly, are more corrupt. Will these corrupt officials’ craze for cash, not in bank accounts but under their mattress, create money supply problems in China?

Well…it happened once some 400 years ago. Economic collapse was among the many factors that brought the Ming Dynasty to an end. The reason? A serious cash flow problem because too much of the nation’s wealth was stored in corrupt officials’ basements.

[Source: Caijing

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