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Business Risk of Crime in China

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Business Risk of Crime in China Business and the Ris k of Crime in China Business and the Ris k of Crime in China Roderic Broadhurst John Bacon-Shone Brigitte Bouhours Thierry Bouhours assisted by Lee Kingwa ASIAN STUDIES SERIES MONOGRAPH 3 THE AUSTRALIAN NATIONAL UNIVERSITY E PRESS E PRESS Published by ANU E Press The Australian National University Canberra ACT 0200, Australia Email: [email protected] This title is also available online at: http://epress.anu.edu.au/ National Library of Australia Cataloguing-in-Publication entry Title: Business and the risk of crime in China : the 2005-2006 China international crime against business survey / Roderic Broadhurst ... [et al.]. ISBN: 9781921862533 (pbk.) 9781921862540 (ebook) Notes: Includes bibliographical references. Subjects: Crime--China--21st century--Costs. Commercial crimes--China--21st century--Costs. Other Authors/Contributors: Broadhurst, Roderic G. Dewey Number: 345.510268 All rights reserved. No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means, electronic, mechanical, photocopying or otherwise, without the prior permission of the publisher. Cover design and layout by ANU E Press Cover image: The gods of wealth enter the home from everywhere, wealth, treasures and peace beckon; designer unknown, 1993; (Landsberger Collection) International Institute of Social History, Amsterdam. Printed by Griffin Press This edition © 2011 ANU E Press Contents Foreword . vii Lu Jianping Preface . ix Acronyms . xv Introduction . 1 1 . Background . 25 2 . Crime and its Control in China . 43 3 . ICBS Instrument, Methodology and Sample . 79 4 . Common Crimes against Business . 95 5 . Fraud, Bribery, Extortion and Other Crimes against Business . 111 6 . Predictors of Business Victimisation . 133 7 . Reporting Crime Victimisation and Satisfaction with Police Response . 143 8 . Perceptions of Business Environment and Crime Trends . 171 9 . Summary, Implications and Future Directions . 189 Appendix A . World Governance Indicators . 215 Appendix B . Review of Business Victimisation Surveys . 221 Appendix C . Media Sources Used in Chapter 2: Crime and policing in Shanghai, Shenzhen and Xi’an . 231 Appendix D . Hong Kong ICBS Pilot Survey, 2003 . 235 Appendix E . Schematic Overview of the ICBS China Questionnaire, 2004–05 . 239 Appendix F . ICBS China Questionnaire, 2004–05: Hong Kong version . 241 Appendix G . Victimisation by Common Crime by City, Business Sector and Size . 273 Appendix H . Victimisation by Non-Conventional Crime by City, Business Sector and Size . 277 Bibliography . 279 Foreword Lu Jianping1 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 enterprises through empirical studies such as fieldwork, surveys, questionnaires, and so on. It also makes possible valid comparisons of the prevalence of crimes against business in Chinese cities (Hong Kong, Shenzhen, Shanghai and X’ian) with others cities similarly surveyed in both emerging economies and developed countries. China’s economic growth since 1978 is no doubt a miracle both at the domestic and the global level. At the same time, crime (common crimes and economic crimes including crimes against business) is also soaring. It is a fascinating terrain for criminologists to verify classical theories, to explore the reason for this phenomenon and possibly to find new explanations. A privilege once reserved for state power or enterprises in command economies, doing business is becoming fashionable for everybody in China today, and the so-called ‘socialist market economy’ has been established. But China is still developing its market economy and problems such as distinctions (or discrimination) in status between public and private market actors and conflicts between state monopolies and marketisation still exist in China. The policy of opening and reforming has triggered profound changes in the economic system of China today, while economic changes in turn bring up new situations and changes in the social interest structure, class status, culture, mentality, human behaviour and governmental functions. This social transformation aggravates the phenomenon of institutional shortage. In this context of economic development and social change, business enterprises suffer (as victims) from the differences in status, in policy and in the competitive environment between the public and private sectors, and from bureaucracy and monopolies, but, at the same 1 Lu Jianping is Professor of Law, PhD, Vice-President of the Chinese Society of Criminology, a member of the Board of Directors of the International Society of Criminology, and Vice-Dean of the College for Criminal Law Science, Beijing Normal University, China. vii Business and the Risk of Crime in China time, they are more inclined towards using bribery and organised crime. Crimes against business in China today reflect not only prominent features of a society in transformation, but also conflicts of interest between public and private, freedom and control, market and government, and civil society and state power. This book is of great value not only to experts in criminal justice, criminology and sociology who are willing to increase their knowledge about China’s economic development, social transformation, crime control and rule of law, but also to businesspeople who just want to do business in or with China. viii Preface This book reports the results of the first large-scale survey of crimes against business in China. We believe that the survey provides vital benchmark estimates of the risks and costs of crime for businesses operating in various economic sectors in China. These costs are worth monitoring and the survey can play a role in the development of both private and public policy responses, as well as crime prevention. As the first comprehensive attempt to measure the risks of not only common crimes such as robbery and fraud but also newly emergent crimes such as cyber crime, credit card fraud and intellectual property theft, our work will, we hope, encourage further investigations based on the same broad victim- centred methods described here. Our view is that despite the usual difficulties of obtaining the cooperation of business leaders and their reluctance to engage with researchers on such a sensitive topic, large-scale independent prevalence surveys of crimes against business are effective in identifying risks, including those involving bribery and organised crime. They also have much to offer in assisting businesses in the reduction of both the direct and the indirect harms that flow from crime. Such surveys provide public police and private security with an understanding of the nature and impact of crime on business—an impact that ultimately falls adversely on everyday consumers. The data collection for the study we report in this monograph was completed in May 2007. Although some years have elapsed, preliminary results were reported at the twentieth annual conference of the Australian and New Zealand Society of Criminology in Adelaide, 24–27 September 2007, and selected final results at the sixteenth Congress of the International Society of Criminology conference in Kobe, Japan, 5–9 August 2011. Even allowing for the considerable time needed to clean and check raw data, conduct analysis and re-check data and results, we have taken longer to finalise the work than intended. In part, this delay arose from the usual time pressures upon the research team amplified by changes in post and location, illness, as well as the additional complexities of working across different locations. Yet this research had its genesis even further back, when in 2003 a small grant from the University of Hong Kong with further support from that university’s Centre for Criminology enabled us to conduct a small pilot survey of crime against businesses in Hong Kong and also in Shenzhen. The pilot was undertaken in July–August 2003 by the survey team of the Social Science Research Centre at the University of Hong Kong and reported by the first author at the Societies of Criminology first Key Issues Conference, held in Paris on 13–15 May 2004. With the feasibility of the research ensured, the principal investigators (Roderic Broadhurst and John Bacon-Shone) in conjunction with the Institute of Crime Prevention, Ministry of Justice of the People’s Republic of China (then under the direction of Professor Guo J. H.), were able to secure ix Business and the Risk of Crime in China competitive funding from the Research Grants Council of the Hong Kong Special Administrative Region (7204/04H) in 2005 to conduct the survey in four key cities in China. We are grateful to the Research Council for their support and assistance, especially for extending the time to complete the research. The survey adapted the relatively untried UN protocol for measuring crimes against business provided by Dr Anna Alvazzi del Frate, then at the UN Office of Drugs and Crime (UNODC). In 2004, Dr Alvazzi del Frate was in the process of completing the
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