Cracks under the glaze

China has rapidly achieved economic superpower status through its reputation for high productivity and low manufacturing costs. The undoubted benefits must though be set against a pronounced risk of fraud and corruption, says Mark Godfrey in this report from Beijing.

The daily deluge of crime reports in China’s press indicates that corruption and fraud are not only still rife in the country, they are most acute when government regulatory bodies hand out business licences and approvals to state-owned firms. Over 16% of China’s GDP is lost each year to fraud and embezzlement, compared to 4% in the USA, according to ChinaWhys, a local fraud examination company.