Practices and potential harm

Naked officials usually take three steps to achieve their aim -- first, arrange for their children, spouses or mistresses to emigrate; second, transfer their money; and third, flee themselves when the chance comes.

During the first step, the officials' children are usually sent abroad to study or work (this is usually arranged by agencies or business people and often in exchange for favors). Then later their spouses also go abroad under the pretext of accompanying their children or traveling on business.

The second step is transferring the money, which is the officials' primary motivation. They use various methods: smuggling cash, in other words carrying cash with them; cash transactions, paying a foreign account, overseas business, loans or other financial transactions to cash in the money through the legal financial system; transferring money under trade pretences by forging import and export contracts and papers; transferring the money through illegal underground banks; electronic money transfers, stocks, futures, and foreign exchange forward transactions and other financial derivatives; or by setting up shell companies to accept payments.

The third step is fleeing abroad. Though Chinese officials have to keep their civil service passports at foreign affairs offices and there is a set procedure to authorize overseas trips, naked officials do have the means to obtain exit papers. They either forge passports or hold more than one passport, or do not hand in their personal passports. They often claim they are in convalescence or are taking a vacation. Other officials disappear suddenly during overseas business trips.

Naked officials cause damage by taking large sums of capital out of China. A report by the World Bank in 2007 revealed that around 20 to 40 billion US dollars from developing countries went into corruption, the majority of which has been transferred to developed countries.

When naked officials flee abroad, they also provide a convenient way out for other corrupt officials, tempting them to take bribes, as it is an easy way to make illicit gains at low risk.