Corruption costs China $86 bn annually
China, the world’s fastest growing major economy, ranks No. 72 in Berlin-based Transparency International’s 2007 Corruption Perception Index of 180 countries.
By Agencies |
SYDNEY: Corruption costs China as much as $86 billion a year and poses one of the most serious threats to the nation’s economic and political stability, the Carnegie Endowment for International Peace said.
Bribery, kickbacks and theft account for about 10% of government spending and transactions, even though the state has more than 1,200 laws and directives against corruption, the Washington-based policy study group said in a report released late Tuesday.
"Corruption has not yet derailed China’s economic rise, sparked a social revolution or deterred Western investors," Minxin Pei, the report’s author, said in a statement. "But it would be foolish to conclude that the Chinese system has an infinite capacity to absorb the mounting costs of corruption."
China, the world’s fastest growing major economy, ranks No. 72 in Berlin-based Transparency International’s 2007 Corruption Perception Index of 180 countries. The government in Beijing had 27 billion yuan ($3.6 billion) of unexplained spending last year, the national audit office said in a statement last month. Economic growth in China has averaged an annual 10.1% over the past five years. The foreign ministry in Beijing didn’t immediately respond to telephone calls seeking comment on the report on Wednesday.
Chinese President Hu Jintao has fired several top officials, including Shanghai Party chief Chen Liangyu, as part of an anti-corruption drive and has set up an agency to tackle graft.
"The Communist Party has been cracking down on corruption and it is one of our top priorities to inject discipline in our ranks," Guo Yezhou, spokesman for the international liaison office of the Communist Party in Beijing, said in an interview on July 19.
The government’s implementation of anti-corruption laws is “spotty and ineffective," according the report, titled "Corruption Threatens China’s Future." Corruption is concentrated in areas with extensive state involvement, such as infrastructure projects, real estate, government procurement and financial services, the Carnegie Endowment said.
The direct costs of corruption could be as much as $86 billion a year, or 3% of gross domestic product, "based on the conservative assumption that 10% of the land lease revenues, fixed investments and government spending is stolen or misused," the group said.
The indirect costs, including efficiency losses, damage to the environment and public health are “incalculable,” according to the report.
Bribery, kickbacks and theft account for about 10% of government spending and transactions, even though the state has more than 1,200 laws and directives against corruption, the Washington-based policy study group said in a report released late Tuesday.
"Corruption has not yet derailed China’s economic rise, sparked a social revolution or deterred Western investors," Minxin Pei, the report’s author, said in a statement. "But it would be foolish to conclude that the Chinese system has an infinite capacity to absorb the mounting costs of corruption."
China, the world’s fastest growing major economy, ranks No. 72 in Berlin-based Transparency International’s 2007 Corruption Perception Index of 180 countries. The government in Beijing had 27 billion yuan ($3.6 billion) of unexplained spending last year, the national audit office said in a statement last month. Economic growth in China has averaged an annual 10.1% over the past five years. The foreign ministry in Beijing didn’t immediately respond to telephone calls seeking comment on the report on Wednesday.
Chinese President Hu Jintao has fired several top officials, including Shanghai Party chief Chen Liangyu, as part of an anti-corruption drive and has set up an agency to tackle graft.
"The Communist Party has been cracking down on corruption and it is one of our top priorities to inject discipline in our ranks," Guo Yezhou, spokesman for the international liaison office of the Communist Party in Beijing, said in an interview on July 19.
ADVERTISEMENT
The government’s implementation of anti-corruption laws is “spotty and ineffective," according the report, titled "Corruption Threatens China’s Future." Corruption is concentrated in areas with extensive state involvement, such as infrastructure projects, real estate, government procurement and financial services, the Carnegie Endowment said.
The direct costs of corruption could be as much as $86 billion a year, or 3% of gross domestic product, "based on the conservative assumption that 10% of the land lease revenues, fixed investments and government spending is stolen or misused," the group said.
The indirect costs, including efficiency losses, damage to the environment and public health are “incalculable,” according to the report.
Download
The Economic Times Business News App for the Latest News in Business, Sensex, Stock Market Updates & More.
The Economic Times Business News App for the Latest News in Business, Sensex, Stock Market Updates & More.
Download
The Economic Times News App for Quarterly Results, Latest News in ITR, Business, Share Market, Live Sensex News & More.
The Economic Times News App for Quarterly Results, Latest News in ITR, Business, Share Market, Live Sensex News & More.
ADVERTISEMENT
