Business Corruption

There are numerous examples of corrupt behaviour within the mining industry. According to a 2009 news article by The New York Times, the local steel industry is plagued by corruption. One of the common illegal practices is that big government-run steel makers purchase extra iron ore with their import licenses, and pocket profit by re-selling excess ore to small steel makers who lack import licenses. There are several cases of corrupt local officials colluding with owners to grant hazardous mining rights and neglecting safety measures for workers. These practices have resulted in the deaths of several thousand miners.

According to a 2008 news article by BBC News, the rainforests of southwest China (e.g. Xishuangbanna) are threatened because rubber companies are clearing the rainforest. Farmers accuse local officials of corruption and collusion with rubber companies in destroying protected forests.

Political Corruption

According to a 2009 news article by The National, Chen Tonghai, former head of Sinopec, the state-owned oil refining company and one of China's ten biggest companies, was sentenced to death in July 2009, for accepting more than CNY 185 million in bribes. However, his death sentence was changed to a life sentence. The fact that one of the most powerful and well-connected leaders of a state-owned company was convicted sends a strong signal to other leaders of large state-owned companies about how seriously the Chinese state views corruption.

According to sources such as Telegraph and TIME news articles between 2009 and 2010, the British-Australian mining company, Rio Tinto was found to have colluded with Chinese steel mills during the negotiation over iron-ore prices. It is reported that bribes were allegedly paid by Rio Tinto representatives to Chinese steel makers over the iron-ore supply contract talks. Four Rio Tinto employees, including its China-based executive, Stern Hu, were charged with bribery and stealing commercial secrets. All of them were given prison sentences up to 14 years. According to the Telegraph, two other Chinese executives were also sentenced to prison for leaking secrets to the aforementioned employees. Chinese state media claimed that the espionage had cost the country a total of CNY 700 billion over the past 6 years due to inflated iron-ore prices, as reported by Forbes in October 2009.

A more recent corruption scandal was related to Hao Pengjun, the head of the Pu county coal office. According to an August 2011 article by Reuters, Hao was sentenced to 20 years in prison and was given a huge fine, after he was convicted for illegally running a mine and using the earnings to purchase properties.