Systemic Irregularity and Spontaneous Property Transformation in the Chinese Financial System

Although the Chinese leadership and international observers disagree on many things about China, they share at least one assessment: corruption has penetrated China's public sector, and the state financial system is among the worst examples. In Transparency International's Corruption Perception Index released annually since the early 1990s, China has been placed either into the bottom group (“the most corrupt”) or at the lower tier (“more corrupt than the majority”). During the Asian financial crisis The Economist even called the Chinese state banks “the worst banking system in Asia.” The Communist Party leader Jiang Zemin, when addressing a 1996 general meeting on Party discipline, marked several domains as the “major problem area” where big corruption and crime cases concentrated, and the financial sector topped the list. The Prosecutor General, in his 1998 work report, urged law enforcers to pay special attention to the abuses of power by financial officials.