Corporate Fraud

Article by the Forensic and Investigation Services Department

A Chinese perspective

Despite the Chinese government's efforts to combat fraud and corruption, statistics emanating from Tsinghua University would suggest that fraud and kickbacks have totalled approximately 15% of China's GDP in the past decade.

Multinational companies are often more exposed to frauds in China. Unfamiliar with the local language, culture or business environment, expatriate management usually relies heavily on "trusted" local management. Relationships ("Guanxi") open the door to the Chinese market for these companies, but these relationships may subsequently lead to real problems, as "normal business practices" result in significant losses through fraudulent transactions and bribes.