Corruption: Main Dangers to Economic and Political Stability and Root Causes
| Date | 01 March 2000 |
| Published date | 01 March 2000 |
| DOI | https://doi.org/10.1108/eb027261 |
| Pages | 44-50 |
| Author | Ye Feng |
| Subject Matter | Accounting & finance |
Journal of Money Laundering Control — Vol. 4 No. 1
Corruption: Main Dangers to Economic and Political
Stability and Root Causes
Ye Feng
In China, corruption mainly refers to crimes of
corruption and bribery as stipulated in Articles 382
and 394, embezzlement (Articles 382 and 383), mis-
appropriation of public funds (Article 384), accepting
a bribe (Articles 385 and 386), a unit accepting a bribe
(Article 387), accepting a bribe in mediation (Article
388),
offering a bribe (Articles 389 and 390), offering
a bribe to a unit (Article 391), offering a bribe for
recommendation (Article 392), a unit offering a
bribe (Article 392 and 393), accepting a gift without
transferring it to the public (Article 394), possession
of unexplained property (Article 395, sub-paragraph
1),
concealing overseas bank deposits (Article 395,
sub-paragraph 1), illegally distributing state-owned
assets (Article 396, sub-paragraph 1) and illegally
distributing confiscated property (Article 396,
sub-paragraph 2) in Chapter VIII on Crimes of
Corruption and Bribery in the Chinese criminal
law. The essential feature of this category of crimes
is that they include the worst cases, endangering
economic and political stability, where state func-
tionaries, taking advantage of their position and
power, not only illegally transfer ownership of
property, but also compromise the reputation of
the civil service.
MAIN DANGERS
The establishment and development of a
market economy
First, these crimes cause a serious drain on state and
public property. Embezzlement, misappropriation
of public funds and illegal distribution of state-
owned assets are directly manifested in the behaviour
of some state functionaries who seek private gain by
taking advantage of their power and opportunity to
administer, distribute and control public property.
They take assets owned by the state or the collective
directly into their own possession or use them for
their own purposes, instead of using them for pro-
duction and other areas for promoting the national
good;
while fund shortages, in turn, reduce state tax
revenues, making it impossible for the government
to invest adequately in capital construction projects
that have a bearing on long-term national economic
development. Corruption inside an enterprise not
only increases the cost of production, but often
turns a potentially profitable enterprise into one
with very little profit, or even into one that goes
bankrupt and closes down. Bribery, on the other
hand,
robs the government or enterprises of their
ability to make decisions in the interests of the
public, either by erroneous decision making in
con-
travention of economic laws, or by misdirecting a
correct decision, using large quantities of financial,
material and human resources in wrongly decided
investment projects, thus causing a serious economic
loss.
Secondly, these crimes disrupt the effective distri-
bution of economic resources and the rational flow
of production. At present, the goal of China's eco-
nomic restructuring is to head for
a
market economy.
A market economy requires respect for the laws
governing values and an effective market-oriented
distribution of social resources. Naturally illegal
funds cannot be used in the process of distribution,
inevitably causing a tremendous waste of resources.
During the period of transition from a planned econ-
omy to a market economy, the government is still
responsible for some market regulation and the
market also requires the government to coordinate
the administration and distribution of resources in
short supply. Public officials who are in charge of
dis-
tributing market resources have thus become targets
for bribery; the resources available for government
distribution are rapidly appreciating through artifi-
cial speculation; and criminals guilty of corruption
and bribery can reap staggering profits out of the
inadequate resources left for the disposal of the
government. Many resources and essential factors of
production in short supply flow into unnecessary
areas because of bribery, not only leading to waste
of resources, but also artificially producing shortages,
seriously affecting the market's basic role in resources
distribution.
Thirdly, these crimes disturb the balance of equal
competition. Equal competition represents the basic
Journal of Money Laundering Control
Vol 4,
No.
1,
2000,
pp.
44-50
© Henry Stewart Publications
ISSN 1368-5201
Page 44
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