Recent years saw increasing economic crimes in China

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Last updated at: (Beijing Time) Friday, October 31, 2003

Recent years saw increasing economic crimes in China

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Since 1998, the economic crimes have in the aggregate kept on increasing, featuring a frequent occurrence, pointed out the latest issue of the "Outlook" Weekly. The economic crimes are apparently committed in a way more organized, more carefully plotted and tactically disguised. They tend to be the two major tendencies in committing crimes of suchlike.

The economic crimes committed in recent years involved 80b yuan on average, over one percent of the annual GDP and three times as much that of 3.6m yuan in ordinary criminal cases in relation to financial and property annexation. Since 1998, the auditing agencies all over the country have transferred to the judicial organs a total of 4864 economic criminal cases.

Though the economic crime hasn't popped up for long in China yet it surges ahead at a surprising speed, revealing 10 major tendencies in its development. The economic crimes will remain a high occurrence in the days to follow. It is a vehement reality that China��s law enforcement institutions have to face with.

Since 1998 the economic crimes recorded high in China in terms of both the number of cases and the amount of money involved, pointed out the article in "Outlook". The number of cases filed soared from 52 thousand in 1998 to 85 thousand in 2001 with an annual growth of about 20 percent. This means it has been growing much faster than ordinary criminal offences. The cases under investigation in 2002 amounted to as many as 71 thousand.

Fraud on export tax rebates revitalized on the ground of a higher export rebates gradually offered by the state in 1998 to offset the adverse impact of the Financial Crisis that hit Asia in 1997. For example, from 1999 to June 2000, 32.3 b. worth of value-added invoice was illegally made out in the two cities of Chaoyang and Puning in Guangdong Province, involving an amount of 4.2b yuan in tax evasion and fraud.

When the "Large-scale Development in the West of China" strategy was adopted by the central government, culprits, with "investment" as a bait, squeezed out "evaluation fees" and "deposits" from enterprises in the west by flaunting the flag of "developing the west". During the outbreak of SARS in some areas in China in the first half of the year, some sinister persons of no conscience counterfeited or hawked some fake and shoddy anti-SARS medicines, medical equipment and apparatuses for protection and prevention which had seriously imperiled the life of the people.

The article also released there were big and serious economic crimes, which deserve our great concern. Economic crimes involving great values and exerting baneful impact on society happened in various fields of the social and economic life around the country.

In the banking business, take the case of "Oct.12" under the scrutiny of Ministry of Social Security for example. About 500m US dollars was embezzled at the Bank of China Kaiping branch in Guangdong Province by its former presidents Xu Chaofan, Yu Zhendong, and Xu Guojun. In the securities, "Yinguangxia", a company listed in Shenzhen Stock Exchange suffering an actual deficit of 220m, exploited 574m through its fabricated 770m profit on its annual fiscal statement.

Another specially serious case is about Chen Xuejun's selling of false invoices and the case is under the inquiry of Beijing public security organs. From October 1999 to February 2001, Chen Xuejun and his gang, under the name of his 28 fly-by-night companies, bought 12300 value-added invoices of 100thousand-face-value and 23100 hand-written invoices of 10thousand face-value from Haidian National Tax Bureau, Beijing. They wrote and peddled these invoices in 27 provinces, cities, and municipalities around the country. The price and tax involved in this case valued over 20b yuan. According to the investigation by organs of public security, the 3380 printed invoices with 100 thousand par value came to 3.1b yuan worth of price and a tax of 450m. yuan.

According to the article, suspects in many economic criminal cases in China disguised themselves as legal businessmen and set up concerns under the camouflage of investment. They have developed ways and means more organized and deliberately schemed to commit the crimes. Aside from that, they even put into practice to share out the work.

With the improvement of China's socialist market economy, the criminals sneaked from their used-to-do practice of making use of the loopholes in the system into a way which is more closely organized and conspiracies premeditated.

In the case of Yi'an stock manipulation probed into by public security organs in Guangdong province, Yi'an group crazily bought 2.7b worth of "Yi'an tech" stock whereas at the same time it used 4.8b yuan to do repeated sales and buys-back, thereby pushing the stock to as high as 126yuan per share in January 2001 from 26yuan per share in October 1999. After that, Yi'an deliberately kept dumping about 30m shares and grabbed illegal profit of 470m yuan on such a manoeuvre.

To distract the attention of the market watchdog, Yi'an opened 630 stock accounts in more than 50 securities companies and made selling and buying operations between 299 of them. The others were just used for covering up their illegal activities. The practice has not only dispelled their risks, but also provided a shelter to their crimes with a form of "legal" business operation, thereby helping them wriggle out of the supervision from regulatory institutions. What's more, it barred the investigators out in their seeking evidences when the crime was brought to light.

(An article from China News Service and translated by PD Online staff member Lijia)

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