In most places, being ranked by a prominent magazine among the wealthiest people in the country constitutes a great honor. Not in China. Such lists, known as bai fu bang in China and published in Forbesand its Chinese equivalent Hurun, are described instead as the sha zhu bang: “kill pigs list.”

In the last fifteen years, China has produced greater overall wealth than any other country. The number of its billionaires has gone from a mere 15 to around 250 in just six years, but for a number of these people this vaulted status is short-lived. According to one study, 17 percent of those on the list end up squealing their way to court or end up in jail. If they’re lucky, those who are caught are investigated and jailed. Some are even executed.

British businessman Rupert Hoogewerf first introduced the China Rich List in 1999 as part of the Hurun Report, a magazine published about wealth and the wealthy in China. Hoogewerf defends his list from accusations that he unwittingly targets China’s privileged, arguing that only one percent have run afoul with the law. The latest Hurun Rich List, however, belies this claim: it lists a handful of those have been arrested, charged or jailed.

Many of those who are not in hot water with the law are, however, facing a different quandary: they’re getting poorer. Just under half of the 1,000 richest have seen their wealth shrink, with 37 of them enduring losses of over 50 percent. Overall, there were 20 fewer billionaires in 2012 than in the year before.

John Bussey of the Wall Street Journal also noted the curse of the rich list: “Very soon after [China’s wealthiest] make the list and get publicity, their share prices begin to decline. The companies themselves are more subject to government cutting off subsidies to them, and the individuals who lead them are more subject to investigation.”

Take Zhou Zengyi as an example. Once China’s 11th richest man, valued by Forbes at $320 million in 2002, he has since been arrested twice and is currently serving a 16-year sentence. Zhou’s transgressions even took Chen Liangyu, Shanghai’s Communist party secretary, down with him.

What accounts for the sharp rise and fall of China’s wealthiest? In a business environment in which personal connections and favors — referred to as guanxi in Chinese — predominate, many tycoons have amassed large fortunes without concern of rules and regulations. However, such a fast and loose atmosphere can cut both ways.

Xu Ming, a billionaire who was once China’s eighth richest citizen, has been detained and under investigation since March 2012 because of his ties with fallen Chongqing Mayor Bo Xilai. Likewise, four others on the list have either been charged with economic crimes, are in detention, or already languishing in prison.

Arrests like these indicate that China has begun to take corruption more seriously. Again, however, identifying which targets deserve indictment remains largely arbitrary. The Economist noted that despite the number of high level cases coming to light in the country, many more remain hidden: “If they wanted to, China’s authorities could probably find grounds for accusing most of the country’s richest people of bending (if not breaking) the rules. But China’s legal culture thrives on the principle of ‘killing the chicken to scare the monkeys.'”

One of these “chickens” is Gong Aiai, a former banker who amassed over 20 properties worth a combined 1 billion yuan (USD $159 million). After citizen-led online searches uncovered her massive wealth, the government had no choice but to investigate. Apparently, Gong used false residence permits to facilitate her property acquisition, a crime that will cause her to go to prison.

Though noteworthy considering the large sum of money involved, Gong’s case is hardly unusual. However, her fall from grace raises a key question. Why do so many wealthy Chinese risk everything to get rich?

One reason is simple economics. With sky-high housing prices, few Chinese can afford to buy a home with their salary alone.

With sky-high housing prices, few Chinese can afford to buy a home with their salary alone.

Many prospective buyers also face roadblocks buying in desirable locations like Beijing because they are restricted by their hukou, a residential permit which functions like an internal passport and prevents citizens from establishing residency and accessing social services outside of their birthplace. Understandably, a scorching black market for desirable hukou has spread throughout China, and online forums teem with requests for what is viewed as a ticket to prosperity.

China’s wealthy also leverage their guanxi with government officials strike mutually beneficial deals. A few months ago, Chinese netizens revealed that an urban management official in Guangdong owned 21 homes, quite a feat considering that his monthly salary was a modest 10,000 yuan. In China, where home ownership confers a higher social status, the real estate economics are daunting. An ordinary apartment in one of China’s marquee cities can cost as much as 16 times of the median annual income.

In a country where so many struggle to get ahead, such gaudy displays of wealth present a challenge to social stability. For that reason, the Chinese government has a political and economic incentive to scrutinize its richest citizens.

Ruchir Sharma, head of emerging markets at Morgan Stanley Investment Management, explains this logic: “If a country is generating too many billionaires relative to the size of its economy, this concentration of wealth can lead to stagnation. Take China…turnover among its top billionaires is high, and few have ever amassed a fortune of more than $10 billion; indeed there is reason to believe Beijing is enforcing an unwritten rule that caps total wealth.”

The threat of this cap has led many wealthy Chinese to bury their wealth underground. Wang Xiaolu, deputy director of the National Economic Research Institute, estimated that China’s gray economy is worth $1.47 trillion annually and growing fast, indicating that many of the wealthy engage in clever accounting to disguise their true net worth. Consequentially, China’s income inequality has grown worse. Less than one percent of the population controls about 70 percent of the country’s wealth, an issue threatening the very foundation of China’s economic miracle.

Deng Xiaoping, the Chinese leader responsible for instituting economic reforms, famously advocated “letting a few people get rich first”. More than three decades later, life for these rich has grown increasingly precarious. For China’s numerous poor, alas, the second part of Deng’s bargain has not yet arrived.

This originally appeared on The Atlantic. Also on our sister site:

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