Despite China's lower economic crime rate compared to global and regional figures, a big number of mainland China companies showed  extreme concern about economic crimes like procurement fraud, corruption and bribery according to survey results released by PowerhouseCoopers (PwC) on Thursday. 

Like Us on Facebook

The PwC survey which was done in the past 2 years collected responses from over 5,000 executives who were based in 95 different countries and regions. Respondents from China included 85 executives from China mainland and 116 from Macao and Hong Kong.

"Two recurring themes featured heavily in the Chinese mainland within the survey: concern about bribery and corruption and that of procurement fraud and kickbacks," according to John Donker, a PwC China partner based in Hong Kong who was responsible for the survey.

Based on worldwide figures collected and reported in the report, China has a lower rate of economic crimes compared to worldwide and regional averages.

Only 27 percent of survey respondents from China mainland and 16 percent of respondents from Macao and Hong Kong had been victims of economic crimes.  Both rates are lower than the 37 percent global rate and the Asia Pacific rate of 32 percent.

The survey also presented the most prevalent economic crimes committed in China showing asset misappropriation as the most common. This is also true for most countries that were part of the survey.   

Procurement fraud which occurs often during bidding, selection of contractor and awarding of projects was experienced by 48 percent of China respondents. This is the second most common economic crime committed in the country. This figure is markedly higher than the global rate of 29 percent.

In China mainland corruption and bribery came next while in Macao and Hong Kong cybercrime and money laundering followed procurement fraud.

The survey showed that 39 percent of respondents from the mainland had been victims of bribery and corruption, and 41 percent of them predict incidence of such crimes will increase.

This concern about corruption and bribery is said to be partly attributed to the ongoing anti-corruption drive in China mainland that subjects government officials nationwide as well as multinational executives to disciplinary measures if found guilty.

"We have already seen China government's increasing efforts to address this," according to John Donker, PwC partner based in Hong Kong who ran the survey.

Interesting results also showed that the likelihood that mainland respondents will be victims of bribery is five times more than their Hong Kong counterparts and one and a half times more than both global and regional averages.

In Hong Kong, where many data-dependent businesses are based, cybercrimes had been experienced by 37 percent of respondents from Hong Kong with 99 percent of the respondents saying that the risk of being a victim of this crime has either remained at a constant level or has increased.

In the case of money laundering, 37 percent of respondents from Macao and Hong Kong said they had faced money laundering problems.  This rate is 3 times higher than both regional and worldwide averages.

"The concentration of financial services businesses in Hong Kong and risks faced by Macao's large gaming sector, combined with increased local and global regulatory activity, makes this a significant area of future focus," said Donker.

The survey also reported that four out of five economic crimes committed in China mainland companies were perpetuated by persons working for the company and 28 percent of those who commit these crimes are below 30 years old.

"The prevalence of internal economic crime themes suggests that many organizations in China need to continue to focus effort on implementing and enforcing internal controls," Donker said.