"There is distrust between the authorities, police and residents, doctors and patients, and customers and businesspeople," the report said.
The study also found that trust in personal relationships increasingly outweighed trust in society among Chinese people.
"In modern society, people's trust in society generally outweighs trust in personal connections. However, in China, people seem to show more faith in their own personal connections," said Yang Yiyin, a social psychology researcher from the academy.
"The government now faces a difficult task in restoring that trust. It can only be restored through stronger punishment of dishonest behavior and the cultivation of civic awareness," she said.
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