City University of Hong Kong
CB 3042 China Business Environment
Question: Why is it so difficult to eradicate corruption even though the party and the central government have repeatedly addressed the problem and various measures over the years?
Ho Wing Yan
China’s substantial corruption challenges are deeply rooted in cultural traditions as well as the country’s complex transitory conditions. Further, corruption is increasingly growing in significance as a political issue in China, and in an international context, China’s corruption problems have attracted extensive attention. Like any emerging market, China suffers from corruption and an often unethical business environment. What makes China different from many other national economies is the scale of the bureaucracy and the pace of economic development from a low base, both of which have created conditions ideally suited to the growth of corruption and opportunities for massive financial gain by underpaid local government of officials and by entrepreneurs eager to amass personal fortunes as quickly as possible. There are three main reasons cause this happen. Definition of corruption
Giving or obtaining advantage through means which are illegitimate, immoral, and/or inconsistent with one's duty or the rights of others. Corruption often results from patronage. Cultural effect in china
First, aspects of Chinese cultural traditions and norms rooted in Confucianism. The corruption in China is having a long history started from the western zhou dynasties. There was a famous corrupt official in history, He Sen, he corrupted one billion dollars in total. In addition, Confucianism is a cultural effect. It encourages corruption indirectly. Courtesy demands reciprocity. It indicates that you are being impolite if you don’t accept one’s present. It is an indirect implication. If you take the money, that implies that you need to do something back.
The relationship between corruption and economic development China is the largest industrialized, the largest agricultural, the 2nd-largest service industry, and the fastest economic developing country.
The rise of corruption is due to economic reform which introduced in 1978 by Deng Xiaoping. It makes a huge contribution of economic development featured in opening to the market, decentralization, growth of the Non-state sector, household responsibility system and Bureaucratism.
Since economic reform began in 1978, China has become a more market-oriented economy and its real GDP has increased at an annual rate of about 9.4 percent per year while the Government target is 8% per year. The Chinese government deserves credit in guiding economic reform but the rapid growth is due to three fundamental economic factors. Given the existence of political stability, these factors are the abundance of high-quality human capital, including both the skilled and hard-working labor force and the resourcefulness of the entrepreneurs, the market institutions established even if they are imperfect and the availability of modern technology and method of management which China can adopt as a new comer. It leads to a demand and supply problem, as the economic activity of both citizens and the Government increase, people make good use of the right from the government official, e.g. Quota policy. Anti-corruption law in China
There are several anti-corruption agencies in China nowadays, including Central and local commissions for discipline inspection, Ministry of supervision and its local branches, Supreme and local procurators and Supreme and local courts. Under the Anti-Corruption Law (2010), it is prohibiting bribery, concealing illegal gains, tax evasion, embezzling funds and receiving gifts which valued over RMB 200 by Chinese officials. If any of the above is violated, people may receive capital offense which is a punishment by death. But corruption still cannot be addressed since those...
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