Corruption in China - 1319 Words

While corruption is said to generate inefficiency and retard growth in a country (Ackerman, 1997), China manages to deliver astronomical economic growth amidst rampant corruption (Li, Peng, 2001). To explain China’s puzzle, the essay first focuses on the causes of corruption and why it has yet to be eradicated, and then analyzes its economic impact in the short and long run. The rise of corruption in China can be attributed to the structure of its economic institutions. Starting off with a unified system where resources are uniformly allocated by the central government, large-scale decentralization market reforms in the 1970s like the â€Å"fiscal-contracting system† endowed local officials with high control over the use of public goods (Zhou,†¦show more content†¦Some say that the Chinese government allows tolerable corruption to motivate officials so that they do not have to reward them in other materialistic ways that are incongruent to the benevolent image of the party (Fan, Grossman, 2000). Anti-corruption activities only target on exposing and punishing smaller cases to appease the masses while corruption at the higher levels is often left unscathed (Pei, 2007). Despite the high levels of corruption, investors do not seem to be deterred from doing business in China. Some believe that corruption acts as an effective â€Å"grease† to speed up the many layers of bureaucratic inefficiencies for starting of businesses in China (Meon, Weill, 2008). Furthermore, the policy of regional competition in China has caused the competitive lowering of bribes in order to attract businessmen with a lower â€Å"unavoidable cost† of doing business in the region. (Li, Peng 2001). Another reason would be the high predictability of corrupt practices in China (Campos, Lien, Pradhan, 2001), to the extent where investors factor â€Å"bribes and gifts† as a portion of their budget. Hence it does not appear as a deterrent to businesses when they enter the market (Dickson, 2008). Corruption due to â€Å"Guanxi† is also explained to enhance efficiency, because â€Å"Guanxi† contributes to high levels of public trust that encourages bus iness ventures due to the availability of valuable information that reduces uncertainty (Li, WuShow MoreRelatedCorruption in China2317 Words   |  10 Pages200 11.08.200 Universidad Mayor Santiago de Chile Facultad Ciencias Econà ³micas y Empresariales International Marketing Manfred Brà ¤uchle Q. Case 2- 5 Coping with Corruption in Trading with China Rafael Fuentes Candia (Chile) Michael David Franz-Josef Kampmeyer (Germany) Johannes Knapp (Germany) Case 2 – 5 Coping with Corruption in Trading with Chin Tuesday, August 12, 2008 page 2 Rafael Fuentes Candia Michael Franz Josef Kampmeyer Johannes Knapp I. List all different types of bribes,Read MoreCase Analysis Corruption in China1824 Words   |  8 PagesCase: Coping with Corruption in Trading with China. Corporations across the globe deal in international business practices every day. When a company must to do business in countries with a high level of corruption, a company should have a plan that helps to maintain control over a key piece of intellectual property or some production process component that allows company to maintain power in the relationship. Most of these processes and practices are legal and ethical, following the laws and regulationsRead MoreCoping with Corruption in Trading with China Essay examples1063 Words   |  5 PagesCoping with Corruption in Trading with China Corruption is on the rise in China, where the country’s press frequently has detailed cases of corruption and of campaigns to crack down on it. The articles primarily have focused on domestic economic crimes among Chinese citizens, and on local ofï ¬ cials who have been ï ¬ red or assessed other penalties. Indeed, China has been rated by Transparency International as number 59 of the 102 countries the German organization rates on its â€Å"Corruption PerceptionRead MoreBritish And Chinese Trade Of Opium Into China Caused The Corruption And Eventual Downfall Of The Qing Dynasty1730 Words   |  7 Pagesto find the extent to which the British and Chinese trade of opium into China caused the corruption and eventual downfall of the Qing dynasty. The main body of this investigation focuses on the corruption and failure of the Chinese government in controlling British incursions, which caused its citizens to rebel and thus began the downfall of the Qing Dynasty. The introducti ons of opium to China and the effects it had on China will be assessed in accordance to origin, value, purpose, and limitationRead MoreThe Politics Of Mexico And China1737 Words   |  7 PagesMexico’s move towards democracy. Similarly, China, a fractured authoritarian state, has been showing increasing signs of democracy. Due to its economic and political trends, many argue that China is well on its way towards becoming a democracy. However, despite these trends, there is a problem in that the politics in both Mexico and China remain riddled with corruption. This complex issue raises the question of why corruption persists in both Mexico and China despite their movements towards democracyRead MoreChina’s evolving geopolitical role and its participation in the WTO.1419 Words   |  6 Pagesterms of geopolitics, it was been observed that China is among the three great powers, beside the United States and the European Union. According to O. Tuathail, 1996; Agnew, 2009, critical geopolitics intends to understand world politics in terms of the ways in which elites and publics actively construct the spaces of political action that are then the medium for the policies of states and other factors. At its current rate of economic growth, China, though still considered a developing country asRead MoreCorruption And Ethics And Integrity Enforcement Agencies1591 Words   |  7 PagesIn the current world, corruption has been rampant across all the sectors of the global economy. There are many instances when corruption cases have been filed within legal and ethics and integrity enforcement agencies. Corruption ranges from the normal citizens of a nation to the top officials of the nation. It develops from the selfish and greedy nature of people. The effect of corruption on the economies of individual states and nations is often dire, especially when it is large scale. These effectsRead MoreCorruption Is A Matter Of Great Concern For The Nation1742 Words   |  7 PagesGovernment in 1963, Kenya has been plagued with corruption. Combating corruption is a matter of great concern for the nation, largely because corruption in Kenya is not just centralized at the head of government, but systematically rooted throughout all levels of government and normalized within society. Kenyans have developed a culture of corruption that cannot be easily broken, and poor governance can be attributed to the entrenchment of corruption throughout Kenya. Government institutions, whichRead MoreChina s Republic Of China1158 Words   |  5 PagesINTRODUCTION OF CHINA Known fully as the people’s republic of China, this country has improved vastly in terms of economic progress in the past decades. With 93% of its population being Han Chinese, China also has 55 other ethnic minorities. This percentage totals up to 1.37 billion people, making China the country with the largest population in the world. The population of China is rather unevenly distributed into 23 different provinces and each province is governed by a local government. China has theRead MoreCensorship in China Essay958 Words   |  4 PagesThe Freedom of Speech is granted to every American citizen and has been since it was founded in 1776; however, not every nation grants that right. China, as a communist nation, retains most individual freedom rights from its citizens. Although in the Peoples Republic of China’s (PRC) 1982 constitution, people are guaranteed Freedom of Expression and Press; it is often violated by the current corrupt government. The government demands the news to be 80% positive and 20% negative, altering the facts