Individual Corruption

According to Transparency International’s Global Corruption Barometer 2010, a substantial number of the responding households who had contact with the medical services in 2009 report to have paid a bribe. On the other hand, only a small percentage of the surveyed households report to have paid a bribe in order to obtain utility services such as telephone, electricity and water in the same year.

A May 2009 news article by The Independent reports that the Sichuan earthquake in spring 2008, which killed more than 80,000 people, laid bare the devastating results that corruption has on local citizens, especially when disaster hits. Many homes, schools, and hospitals were levelled by the earthquake due to shoddy construction work with substandard material that was a direct consequence of corruption and ignoring building codes. Based on the same source, many of the victims' families who are seeking justice are reportedly facing harassment.

Business Corruption

There are numerous examples of corruption in construction projects that lead to low quality and unsafe construction. In July 2011 alone, four bridges crumpled in China, and explanations for such accidents, according to an August 2011 article by The Wall Street Journal, tend to focus on the non-transparent way of distributing the contracts via virtually non-existent tender processes, where local governments grant projects to companies that are owned by high level local government employees, and the work is then further sub-contracted to a long chain of smaller companies, with bribes paid at each level and successive layers of cash creamed from each level. In the end, the actual budget left, only allows for the cheapest labour and often inferior materials, according to the same article.

Another example was a fire accident in Shanghai in November 2010, which took the lives of 58 people. According to two 2010 news articles by BBC News and Shanghai Daily, the accident was caused by the ‘alliance of interests’ between high ranking officials in the Jing’an District construction department and its affiliate companies. The latter reportedly paid bribes to the construction department in return for it turning a blind eye on safety regulations. According to an August article by BBC News, four former officials, including the head of the construction department, have been given prison sentences ranging from 5 to 16 years.

Political Corruption

According to the US Department of State 2011, the construction sector is considered a sector prone to corruption, regularly causing large amounts of funds to be lost. Similarly, an October 2011 article by Xinhua News also reports that corruption in infrastructure projects remains rife despite persistent anti-graft campaigns in recent years and severe penalties. According to the Central Commission for Discipline Inspection (CCDI), as cited in the news article, more than 6,800 officials have been prosecuted for corruption in infrastructure projects within the first eight months of 2011. Often bribery occurs in many areas related to infrastructure projects, such as land-use approval, public bidding and the purchase of construction related goods. The article further states that apart from accepting cash, officials also receive bribes in the form of gift cards, dividends, overseas tour packages, school tuition for their children, houses and luxury goods.

Zhang Chunjiang and Li Hua, both former executives of China Mobile, the world’s largest phone company by subscribers, were each sentenced to death with a two year reprieve, after being convicted of accepting more than USD 1.5 million and USD 2.5 million in bribes, respectively. According to an August 2011 article by The New York Times, at least six other executives from the same company are currently being investigated in corruption scandals.

Prior to the fatal train collision in July 2011, the former deputy chief engineer of China’s railways, Zhang Shuguang, and the railways minister, Liu Zhijun, had both been arrested in February 2011. According to several 2011 newspaper articles, such as The Independent and The Telegraph, Zhang was accused of stealing USD 2.8 billion and depositing the money in foreign accounts, while Liu reportedly receiving kickbacks linked to contracts for high-speed rail expansion. Three senior railway officials were dismissed following the collision. China has also suspended all high-speed rail projects until a safety review is completed. 

The State Food and Drug Administration (SFDA), which administers and approves medicine and health care supplies in China, was under investigation in connection with bribes by pharmaceutical companies that tried to avoid having their products properly tested. Incidents occurred in which people died due to fraudulently approved drugs. According to Global Integrity 2009, the former head of the SFDA was sentenced to death and was executed in July 2007 for accepting more than USD 860,000 in bribes in return for approving licenses for 170,000 medicines.

Frequency

The World Bank & IFC: Doing Business 2012:
- Dealing with a construction permit requires a company to go through 33 procedures and spend 311 days to obtain the required licences and permits, incurring an average cost of 444% of per capita income.

- Starting a company requires the entrepreneur to go through 14 procedures, taking 38 days at a cost of 3.5% of income per capita.

World Economic Forum: The Global Competitiveness Report 2011-2012:
- Business executives give government administrative requirements (permits, regulations, reporting) in China a score of 3.9 on a 7-point scale (1 being 'extremely burdensome' and 7 'not burdensome at all'), representing a competitive business advantage for the country.

Transparency International: Global Corruption Barometer 2010:
- Nearly 10% of households who had contact with registry and permit services in 2009 report to have paid a bribe.

- 5.6% of households who had contact with the utilities services in 2009 report to having paid a bribe.

- 44.8% of households who had contact with medical services in 2009 report to have paid a bribe.

Carnegie Endowment: Corruption Threatens China's Future 2007:
- A 2006 review of 3,067 corruption cases revealed that approximately half were related to infrastructure projects or land transactions.