Editorial
| Pages | 122-123 |
| DOI | https://doi.org/10.1108/JMLC-02-2018-0012 |
| Date | 08 May 2018 |
| Published date | 08 May 2018 |
| Author | Li Hong Xing |
| Subject Matter | Accounting & Finance,Financial risk/company failure,Financial compliance/regulation,Financial crime |
Editorial
Building bridges
In the pages of this journal and our sister publication the Journal of Financial Crime,we
have often referred to the initiatives that have taken place and are on track in China to
address not only corruption but also economically relevant crime. China has had a long
history of addressing crime and misconductrelating to the operation of its economy. Indeed,
some of the earliest market-related laws can be found in the various Chinese codes. Anti-
insider dealing legislation focussing on public officials was enacted in 1921 by the Nanjing
Government. Indeed, some of the earliest laws in China, nearly 3,000 years ago, addressed
issues related to corruption. The problem in China has generally not been an absence of
appropriate law, or for that matter clearmoral precepts, but rather the problems of effective
enforcement and standardisation of enforcement across such a wide and in some respects,
diverse country.
We have referred to the important initiatives that have been taken, in recent years, by
President Hu Jintao and more recently by President Xi Jinping against corruption (Li Hong
Xing 20 JMLC (2017) 218; see also Comment 38, The Company Lawyer (2017) 333). Indeed,
there are those who would argue that, while commendable in many respects, issues of
proportionality and even focus have arisen (refer to the earlier editorial). There have been
concerns that the crucial role played in the detection, investigation and sanctioning of
corruption by the Chinese Communist Party (CCP) has occurred outside the traditional
Chinese legal system. There have been cases, particularly involving matters outside China,
where the emphasis that has been placed on Party disciplinerather than prosecution by the
Supreme People’s Procuratorate (SPP) through the People’s Court, has complicated
procedures and compromised the ability of other countries to afford meaningful judicial
assistance. We reported last year in the pages of this journalthat given these concerns and
the desire to make availableto CCP investigations the panoply of legal powers possessedby
the SPP and police, the Government intended to establishfor the first time in China an over-
arching agency. This has now been established, and the Central Commission for Discipline
and Inspection (CCDI)is now in place and developing its operating systems and procedures.
At the 19th National People’s Congress in October 2017, attention was focussednot just
on corruption, but wider issues relatedto economic crime and, in particular, financial crime.
In large measure, this was a result of concerns particularly within the CCP about the
numerous examples and allegations of misconduct during and after the stock market crash
of 2015. The laws relating to market abuse and insider dealing were not, in the view of
many, adequately enforced. There has also been a growing concern, especially in the
provinces such as Shenzhen and GuangZhou, about “boiler room”operations and “get rich
quick”schemes. The situation has been compounded by allegations of corruption, self-
dealing and manipulation by some senior officials in the regulatory authorities –including
the China Securities Regulatory Commission and the China Insurance Regulatory
Commission. There have also been grave concerns in the banking sector and a number of
senior officials in some of China’s leading banks and financial houses have been placed
under investigation. At the same time, there is also a perception that China has quite strict
anti-money laundering laws, which have not been adequately enforced, and there is a
general lack of effective co-ordination in policing irregularities and, indeed, serious crime –
some organised, within the financial sector. President Xi Jinping was outspoken in his
JMLC
21,2
122
Journalof Money Laundering
Control
Vol.21 No. 2, 2018
pp. 122-123
© Emerald Publishing Limited
1368-5201
DOI 10.1108/JMLC-02-2018-0012
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