Business and the Risk of Crime in China

Business and the Risk of Crime in China

Roderic Broadhurst
John Bacon-Shone
Brigitte Bouhours
Thierry Bouhours
assisted by Lee Kingwa
Volume: 3
Copyright Date: 2011
Published by: ANU Press
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  • Book Info
    Business and the Risk of Crime in China
    Book Description:

    The book analyses the results of a large scale victimisation survey that was conducted in 2005-06 with businesses in Hong Kong, Shanghai, Shenzhen and Xi'an. It also provides comprehensive background materials on crime and the criminal justice system in China. The survey, which measured common and non-conventional crime such as fraud, IP theft and corruption, is important because few crime victim surveys have been conducted with Chinese populations and it provides an understanding of some dimensions of crime in non-western societies. In addition, China is one of the fastest-growing economies in the world and it attracts a great amount of foreign investment; however, corruption and economic crimes are perceived by some investors as significant obstacles to good business practices. Key policy implications of the survey are discussed.

    eISBN: 978-1-921862-54-0
    Subjects: Economics

Table of Contents

  1. Front Matter
    (pp. i-iv)
  2. Table of Contents
    (pp. v-vi)
  3. Foreword
    (pp. vii-viii)
    Lu Jianping

    It is a great pleasure to introduce for the public the results of the 2005–06 China International Crime against Business Survey (China ICBS) conducted by the team of ANU professors and researchers in Hong Kong.

    The general aim of the China ICBS is to enhance our understanding of the extent and nature of crimes against business, and their impact on business and confidence in China. As the first large-scale survey of crimes against business undertaken in Chinese cities, the China ICBS shows that it is possible to obtain useful data about crime risks, prevention practices and reactions of business...

  4. Preface
    (pp. ix-xii)
    Roderic Broadhurst
  5. [Map]
    (pp. xiii-xiv)
  6. Acronyms
    (pp. xv-xvi)
  7. Introduction
    (pp. 1-24)

    Commercial activity entails many risks with the potential to ‘shrink’ profit margins. Losses arising from wastage, damage, fraud and theft are an integral part of the cost of doing business. Crime is a ubiquitous factor in commercial life, a ‘cost’ to avoid, minimise and manage. Losses from theft and fraud can sometimes be fatal to business survival, but usually losses are absorbed or passed on to clients or consumers. Drawing on the experiences of more than 5000 businesses, the research reported here seeks to understand the scale and impact of crime on business in the People’s Republic of China, exploring...

  8. 1. Background
    (pp. 25-42)

    Since its inception in 1989, the United Nations International Crime Victims Survey (UNICVS) has provided comparative information on the victimisation of individuals, but there is limited comparable information at the international level on crime and corruption affecting business, particularly in terms of direct experiences as opposed to perceptions. A new focus on business crime arose from a growing concern about the impact of crime, especially organised crime and corruption in developing economies, and the rising costs of crime prevention for government and the private sector (Doerner and Lab 1998; Eigen 2002; Kaufman et al. 2000; van Dijk 1999). The first...

  9. 2. Crime and its Control in China
    (pp. 43-78)

    Both Hong Kong and the mainland have experienced profound social, political and economic changes in the past 30 years, which have influenced crime rates and the responses to crime. Research on crime and victimisation is well developed in Western industrialised countries, but less so in developing countries and new economies. In Hong Kong, official crime and justice statistics as well as data from victimisation surveys are readily available. Information from the mainland is becoming more accessible, particularly in the English language; however, crime statistics are limited, by and large, to aggregate national data. Although the extent and nature of crime...

  10. 3. ICBS Instrument, Methodology and Sample
    (pp. 79-94)

    The China ICBS questionnaire was adapted from the 2000 UN Interregional Crime Research Institute (UNICRI) version of the ICBS that was used in Central Eastern Europe. In order to examine new areas of crime but keep the questionnaire to a reasonable length, questions about violence at work were removed, and the section dealing with protection money was combined with the section on intimidation/extortion. New sections were included on computer-related crime and infringement of intellectual property (IP). Overall, the questionnaire included 120 pre-coded questions, available in English, Cantonese and Mandarin. The Chinese versions were translated from the original English version with...

  11. 4. Common Crimes against Business
    (pp. 95-110)

    We refer to ‘common’ crime when talking about conventional crime or ‘street’ crime, such as burglary, robbery or theft, which is perpetrated against both individuals and businesses. The next chapter examines crime that is more likely to specifically target businesses or commercial enterprises, such as fraud, bribery and corruption, and computer-related crime. Here, we focus on nine common crimes: burglary, vandalism, vehicle theft, theft from a vehicle, theft by customers, theft by employees, theft by outsiders, robbery, assault, and an ‘unspecified offences’ category. First, we report rates of victimisation by city. Then, we consider whether victimisation varies by business sector...

  12. 5. Fraud, Bribery, Extortion and Other Crimes against Business
    (pp. 111-132)

    We use the term ‘non-conventional’ to denote crimes that are more likely to be directed primarily at businesses because of their size, resources and the types of activity they perform. The ICBS examined fraud by employees and outsiders, Internet fraud, bribery, extortion and intimidation, infringements of intellectual property (IP) (counterfeiting) and computer-related victimisation. A single question was asked in relation to bribery and corruption: ‘did anyone try to bribe you, other managers, your employees, or obtain bribes from the company in relation to its activities?’ That is, the question referred to bribes received by employees presumably at the expense of...

  13. 6. Predictors of Business Victimisation
    (pp. 133-142)

    The descriptive analyses performed so far suggest that business size was a major predictor of victimisation, but that, for some crime types, business sector and city also had some effect. Because the proportions of businesses of different sizes involved in various sectors of activity differ across the four cities, it is necessary to control for sector and size effects in order to present a valid picture of city effects, if any exist. In this chapter, we try to disentangle the relative impact of four factors—business size, sector of activity, location of premises, and city—on business victimisation by conducting...

  14. 7. Reporting Crime Victimisation and Satisfaction with Police Response
    (pp. 143-170)

    The willingness of crime victims (whether a business or an individual) to report crime to police or other law-enforcement agencies, such as an anti-corruption body, is in part a reflection of their confidence in these agencies. Omnibus crime victim surveys, such as the UNICVS, which measure the prevalence of crimes against households and individuals, find large variations in the willingness of victims to report a crime. Reporting ‘rates’ have been found to vary according to the nature and severity of the offence as well as the age and gender of the victim, and, in relevant offences, the degree of intimacy...

  15. 8. Perceptions of Business Environment and Crime Trends
    (pp. 171-188)

    All respondents were asked their opinion about several potential obstacles, including regulatory controls, to doing good business in the mainland. Hong Kong respondents were also asked about obstacles to doing good business within Hong Kong. While mainland businesses based their answer on their own experience, only the 20 per cent of Hong Kong businesses with additional premises in the mainland could talk from experience; others expressed their perception of what doing business in the mainland was like. Although a number of mainland businesses also had premises in Hong Kong (12.6 per cent), they were not directly asked about potential obstacles...

  16. 9. Summary, Implications and Future Directions
    (pp. 189-214)

    In this final chapter, we briefly summarise the main results of the China ICBS, with the prevalence of common and non-conventional crimes illustrated in Figures 9.1 and 9.2. The overall direct costs of crime incurred by our sample of businesses are estimated and extrapolated to the wider business community. We review the findings in respect to willingness to report to police and satisfaction with the police response, as well as general attitudes to crime trends and crime prevention. Where possible, we compare the results of this survey with those of a similar nature conducted in other parts of the world....

  17. Appendix A. World Governance Indicators
    (pp. 215-220)
  18. Appendix B. Review of Business Victimisation Surveys
    (pp. 221-230)
  19. Appendix C. Media Sources Used in Chapter 2: Crime and policing in Shanghai, Shenzhen and Xi’an
    (pp. 231-234)
  20. Appendix D. Hong Kong ICBS Pilot Survey, 2003
    (pp. 235-238)
  21. Appendix E. Schematic Overview of the ICBS China Questionnaire, 2004–05
    (pp. 239-240)
  22. Appendix F. ICBS China Questionnaire, 2004–05: Hong Kong version
    (pp. 241-272)
  23. Appendix G. Victimisation by Common Crime by City, Business Sector and Size
    (pp. 273-276)
  24. Appendix H. Victimisation by Non-Conventional Crime by City, Business Sector and Size
    (pp. 277-278)
  25. Bibliography
    (pp. 279-298)