Corruption in China Essay

Words: 1320
Pages: 6
Open Document
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 “fiscal-contracting system” endowed local officials with high control over the use of public goods (Zhou, …show more content…
Estimated direct economic loss because of corruption is 13% of its GDP, due to tax evasions, land grabs and the decline in value of the government output due to inefficient allocation to unprofitable companies (Wolf, Yeh, Zycher, Eberstadt, Lee, 2003). Corruption also leads to socio-political problems such as the increasing income gap of the society(Wu, Zhu, 2011) and the resultant loss of confidence towards the ruling party manifesting as physical unrest that harms China’s economy indirectly (Pei, 2006). Now, foreigners are increasingly deterred by the unreasonable amount of extra payments needed to invest in China (Lu, 2010) and thus have a growing preference to invest in places with higher anti-corruption efforts (Cole, Robert, 2008). This phenomenon threatens the sustainability of the Chinese economy that is highly leveraged on FDI. In all, unless the Chinese government is prepared to face a downward spiral of China’s economy, they should engage in more concerted efforts to weed out corruption from its roots.
Bibliography
1) Ackerman, Susan-rose. “The Political Economy of Corruption” Institute of International Economics. Pg 42- 43 Retrieved from http://www.iie.com/publications/chapters_preview/12/2iie2334.pdf. 2) Campos J. Edgardo, Lien Donald, Pradhan Sanjay (2001). “Corruption and its Implications for Investment”. In. Campos, J. Edgardo (Eds) “Corruption: The Boom and Bust of East Asia”. Philippines: Ateneo De Manila University Press. Pg
Show More

Related Documents: Corruption in China Essay

Coping with Corruption in Trading with China Essay

Coping 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 officials who have been fired 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 “Corruption Perception…

Words 1042 - Pages 5

Public Administration and Adb / Oecd Anti-corruption Initiative Essay

CHAPTER 1 Preventing Corruption A. Preventing corruption in public administrations B. Curbing corruption in the political sphere C. Regulating the business sector and fostering ethical business PREVENTING CORRUPTION Public Administrations 3 Preventing Corruption C orruption and bribery thrive on systemic weaknesses. Efforts to prevent corruption aim at eliminating these weaknesses and enhancing integrity and transparency. This goal is common to corruption prevention in the key sectors – public…

Words 8189 - Pages 33

Avon In China Essay

Avon in China Entering into the Chinese commercial world was a very risky move for Avon. As any international investment is risky, China is even more so due to the unstable economy at the time as well as the corruption in the government. When Avon went into the country, analysts reacted “Avon’s venture is risky because you don’t know what’s going to happen in China.” Avon went into the venture with an American ignorance. It was said in the case that Avon officials thought that it would be “virtually…

Words 952 - Pages 4

Global Management and Country International Management Practices Essay

carry out business with New Zealand. This paper presents an analysis of China’s cultural and organization behavior in the corporate world, focusing on strategies employed to run successfully and maintain a title as the World’s second largest economy. China is the country with the highest population in the world with about 1.4 billion people. The country’s politics scopes around its socialist, communist and authoritarian characteristics that have been narrowed down to socialism with Chinese characteristics…

Words 2365 - Pages 10

Analysis: Dimensions Of The Romania

|Dimensions of the |Romania – Mr. Ceausescu |China – Mao Zedong | |Dictator's Dilemma | | | |Installation of Fear |- Fear of the secret police- the Securitate |- fear of repression and hunger | | |(arbitrary arrest…

Words 348 - Pages 2

Final paper IBUS 595 1

Chongqing, but it can apply to just about any province in China. For example, the level of air pollution is very high in many areas of China. However, this pollution is more than a local, Chinese issue. China’s pollution even spreads beyond Asia. Some of it affects even the USA. Certain factories, however, are significant “emitters” of various forms of pollution containing metals and toxic gases. Our client wishes to be the premier go-to company for China. With permission and close ties (within legal bounds)…

Words 1417 - Pages 6

Can The Chinese Communist Party Gain Power Essay

Keshav Sota Prof Meyerson Can the Chinese Communist Party Maintain Power over China? Winston Churchill once said that "democracy is the worst form of government, except for all the others". Leaders such as Churchill have discussed alternatives to democracy without much success. In the last millennium, most governments have accepted democracy as the ideal form of government. Leaders and commoners alike praise the way democracy allows people to share their personal interests yet still function collectively…

Words 1200 - Pages 5

The Economic Structure Of The United States Vs. China

When it comes to the economic structure of the United States VS China there are several key differences in the economy of these two countries. Some economic challenges that China faces include corruption and crime, low income levels, and “low domestic consumption”. China per capita is below the world’s average. Due to environment deterioration china is considered one of the fastest aging countries in the world. The United States “has the largest and most technologically powerful economy in the world…

Words 415 - Pages 2

Essay on Capitalism and Good Guanxi

business culture issues when dealing with China. Additionally the following questions can be inferred from the case: • Is guanxi bribery and/or part of a larger overall pattern of corruption? • How does guanxi fit into China’s transitioning economy? • Is the need for guanxi still prevalent in the Chinese economy? China was the leading recipient of FDI in 2005.[i] The allure for foreign multinationals to establish operations within China is well known and continues to grow. Benefits…

Words 1723 - Pages 7

Characteristics Of Chinese Emperors

Shihuangdi was an extremely ‘ruthless’ king when it came to battle; he was clever and had the ability to slaughter his enemies without any real hassle. One can infer from this source and the behavior of this particular emperor and others that the kings of China really had a large dynastic sense, with the large tombs and huge terracotta army that he was buried with really shows how these people believed they were G-ds, and they lived ruled and died like G-ds too. Another example of how ruthless and power hungry…

Words 965 - Pages 4