Like other socialist economies that have undertaken economic reforms, such as post-Soviet Eastern Europe and Central Asia, reform-era China has experienced increasing levels of corruption.
According to Yan Sun, Associate Professor of Political Science at the City University of New York, it was cadre corruption, rather than a demand for democracy as such, that lay at the root of the social dissatisfaction that led to the 1989 Tiananmen Square protests and massacre.
[7] Since the Tiananmen Square protests and massacre, corruption has not slowed as a result of greater economic freedom, but instead has grown more entrenched and severe in its character and scope.
The spread of corruption in traditional China is often connected to the Confucian concept of renzhi (人治; rénzhì; 'Rule of the people') as opposed to the legalist "rule of law" (法治; Fǎzhì).
Profit was despised as preoccupation of the base people, while the true Confucians were supposed to be guided in their actions by the moral principle of justice (义; 義; yì).
The famous attempt of Wang Anshi to institutionalize the monetary relations of the state, thus reducing corruption, were met with sharp criticism by the Confucian elite.
As a result, corruption continued to be widespread both in the court (Wei Zhongxian, Heshen) and among the local elites, and became one of the targets for criticism in the novel Jin Ping Mei.
In the late Ming dynasty, robust international trade brought an influx of silver into China, enriching merchants and becoming a target of government officials.
"[9] The widespread corruption of the Kuomintang, the Chinese Nationalist Party, is often credited as being an important component in the defeat of the KMT by the Communist People's Liberation Army.
Though the Nationalist Army was initially better equipped and had superior numbers, the KMT's rampant corruption damaged its popularity, limited its support base, and helped the communists in their propaganda war.
For this, the CCP has been called the "princelings' party" (Chinese: 太子党; pinyin: taizidang), a reference to nepotistic corruption in some periods of Imperial China.
Non-structural corruption exists around the world, and refers to all activities that can be clearly defined as "illegal" or "criminal," mainly including different forms of graft: embezzlement, extortion, bribery etc.
New Left scholars on China criticise the government for apparent "blind faith" in the market, and especially for its erosion of authority and loss of control of local agencies and agents since 1992.
[18] Corruption in China results from the Party-State's inability to maintain a disciplined and effective administrative corps, according to Lü Xiaobo, Assistant Professor of Political Science at Barnard College.
[23]: 115 In 2010, in a rare move due to its perceived impact on stability, Li Jinhua, vice-chairman of the National Committee of the Chinese People’s Political Consultative Conference (NCCPPCC) and former long-serving auditor general of the National Audit Office, fired a warning shot in the People's Daily, calling for better legal structures and greater supervision over the business dealings of officials and their children.
The report shows that the brother-in-law of China's current Paramount leader, Xi Jinping and the son-in-law of former premier Wen Jiabao are amongst those making use of offshore financial havens to avoid tax and transfer money overseas.
[7] Similarly, in late 2006 the State Council’s Development Research Center asked 4,586 business executives (87 percent in nonstate firms) to rate their local officials in terms of integrity.
[36] Controlling an office entitles the holder to rents or payments for real or fake activities, and organizations are turned from places of work into "resource banks" where individuals and groups pursue their own interests.
Prebendal corruption doesn't necessarily need to be about monetary gain, but may include usurpation of official privilege, backdoor deals, clientelism, cronyism, nepotism.
[10] At the same time, many corrupt local officials have turned their jurisdictions into virtual “mafia states,” where they collude with criminal elements and unsavory businessmen in illegal activities.
[10] In the People's Liberation Army (PLA), corruption took the form of senior posts and promotions being sold and those in positions of authority soliciting bribes from military contractors and businesses involving PLA-controlled real estate.
[37] While the state and its bureaucrats are major players in the reform-era economy, new interests and concentrations of economic power have been created, without legitimate channels between administrators and entrepreneurs.
Inconsistent tax policy, and a politicised and poorly organised banking system, create ample opportunities for favouritism, kickbacks, and "outright theft," according to Michael Johnston, Professor of Political Science at Colgate University in Hamilton, New York.
[40] The Telegraph quoted an employee of a state company saying: "In fact, the police stations in Chongqing were actually the centre of the prostitution, gambling and drugs rackets.
But rules and values for business and bureaucratic conduct are in flux, sometimes contradictory, and “deeply politicized.”[17] In many countries systematic anti-corruption measures include independent trade and professional associations, which help limit corruption by promulgating codes of ethics and imposing quick penalties, watchdog groups like NGOs, and a free media.
In some cases this has impelled high-ranking officials to form special investigative groups with approval from the central government to avoid local resistance and enforce cooperation.
[58] However, since in China vertical and horizontal leadership structures often run at odds with one another, CCP anti-corruption agencies find it hard to investigate graft at the lower levels.
The goal of effectively controlling corruption thus remains elusive to the ruling Party, and only a propaganda tool to mislead the Chinese public on its false promises.
Prominent individuals implicated in corruption in China include: Zhou Jihong[62] (Olympic Diving Champion and Vice President of World Aquatics), Wang Shouxin, Yang Bin, Chen Liangyu, Qiu Xiaohua (the nation's chief statistician, who was fired and arrested in connection with a pension-fund scandal),[63] Zheng Xiaoyu,[63] Lai Changxing,[63] Lan Fu, Xiao Zuoxin, Ye Zheyun, Chen Xitong, Tian Fengshan, Zhu Junyi, Zhang Shuguang (a railways official, managed to steal $2.8 billion and move it overseas[64]).
Authors who have written about corruption in China include: Liu Binyan, Robert Chua, Wang Yao, Li Zhi, Lü Gengsong, Xi Jinping, Jiang Weiping, Gong Ting.