In this article Olivia Yu reviews literature from the last 15 years regarding Chinese corruption.

This literature ranges from theoretical to empirical, and made use of qualitative and
quantitative research methods. She claims that as corruption is more pervasive in
developing and transitional countries there is an interest in understanding its occurrence in
China as it is a rising economic power with socialist roots. One of the problems of data about
corruption is that, of what is available, it is an underrepresentation of the reality due to its
covert nature.
Yu states that corruption in the public sector in China is widespread and while the country
has been enjoying rapid economic growth corruption has, over the last 20 years, increasingly
become a source of discontent, especially considering the growing inequality between rich
and poor. She observes that the mechanisms to monitor and prevent corruption are only
effective for lower level officials. The more powerful the official is the less likely he is to be
exposed. This is in part due to the organizational structure. All officers of the
supervisory/anti-corruption agencies are party members therefore they must show loyalty
towards the party, but as anti-corruption officers they must also fulfill their duty to fight
corruption. This problem is exacerbated by the fact that local party officials are more
powerful than non-party state officials. The most powerful person is usually the local party
secretary, who also appoints officials working for the anti-corruption agencies and has, the
author claims, an over concentration of power. In addition, some forms of corruption, such
as misuse of power, are not always treated as criminal acts rather they are treated as ethics
violations and are dealt with administratively. These are known as unhealthy tendencies.
In Chinas current code, corruption consists of three offenses: bribe-taking, embezzlement
and graft.
There are three bodies that deal with corruption: 1). The Central Commission for Discipline
(Zhongyang

), which is the partys disciplinary mechanism. 2). The

Ministry of Supervision (Jiancha Bu), which deals with the behavior of government agencies
and employees. 3). The General Bureau of Anti-Corruption which is within an arm of the
judiciary known as the Supreme Peoples Procuratorate (Zuigao Renmin Jiancha Yuan).
Allegations of corruption concerning party members are referred to the Commission for
Discipline, and those concerning government officials are referred to the Ministry of
Supervision. These are able to implement various forms of punishment like demotion,
dismissal, or reprimand. They are further able to refer the case on to the Procuratorate for

criminal prosecution. Yu provides evidence that shows that only 19% of the cases referred to
the Procuratorate are prosecuted.
One of the most interesting observations the author makes is the changes in forms of
corruption during the course of the reform period. The author summarizes corruption in
modern China as the product of interactions between changing conditions in social control
as market activities were increasing, structural opportunities for office holders in the public
sector to generate personal gains, and instrumental roles of cultural practices. (Yu 2008:
174) Although corruption is a universal problem, its evolution in modern China
15 of 76 DISCLAIMER: This bibliography contains summaries of the presented articles. It does not represent the
views of

the author or any of the institutions involved in its preparation.

reflected the transformations the country went through, as well as particular characteristics
of Chinese society. Yu notes that in the first period of reform, 1978-1992, profiteering was
the most common form of corruption due to the price fixing role and procurement
mechanisms of the state, and the ties with new middle-men. With subsequent market
reforms dual-pricing systems were removed and the opportunity for public organizations
and their employees to exploit their distributive function for speculative activities was
gradually eliminated. After 1992 bribery became the more common form of corruption.
Although bribery did exist prior to 1992, it was however focused in government agencies
that had administrative authority over regulated industries. Due to market and regulatory
pressure the net organizational bribery increased involving employees at all levels, in
organizations of all ownership forms, and performing a large range of functions. By the end
of the 1990s 80% of bribery cases and 90% of the total bribe money were related to
organizational bribery. Company financed bribery (

) had, by the 1990s,

become a distinct corruption offense. The aims of this form of bribery are often to get
contracts, below market price supplies, credit, or receive a favorable interpretation or
judgment concerning legislation.
The social regulation of corruption has changed over the 60 years history of China. Once
seen as a detestable bourgeois activity, within the new era where getting rich is
commendable, and due to the reduced ideological control of the party, the normative
deregulation has allowed for a more permissive attitude towards corruption. Another

peculiarity in the Chinese is system is the role that relationships (Guanxi) play. Yu believes
that this system was developed to create a trustworthy system in response to irrational
institutions, she quotes from Hsu who terms this a form of capitalism without contracts.
Guanxi and power have also been of benefit to many of the families of officials. Yu draws
attention to a study which revealed that 98% of senior officials in China have relatives in
senior business or government positions, earning on average more 120 times more than the
average Chinese salary. The author emphasizes that this system of guanxi and corruption
actually undermines the economy and free market. She states that this has become an
increasing source of instability and is putting the legitimacy of the party-state at stake.