Business and the risk of crime in China

Author/s (editor/s):

Broadhurst, Roderic
Bacon-Shone, John
Bouhours, Brigette
assisted by Kingwa, Lee

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Commercial activity entails many risks with the potential to ‘shrink’ profit margins. Losses arising from wastage, damage, fraud and theft are an integral part of the cost of doing business. Crime is a ubiquitous factor in commercial life, a ‘cost’ to avoid, minimise and manage. Losses from theft and fraud can sometimes be fatal to business survival, but usually losses are absorbed or passed on to clients or consumers. Drawing on the experiences of over five thousand businesses, the research reported here seeks to understand the scale and impact of crime on business in the People’s Republic of China, exploring both conventional or common ‘street’ crime, such as burglary, robbery and theft, and crimes that specifically target business such as fraud, counterfeiting, bribery and extortion. The authors estimate that in the year of the survey our sample of 5,117 businesses suffered a total annual loss to crime of USD 20.35 million, most of which was due to fraud by either employees (USD 7.45 million) or outsiders (USD 7.56 million). They were able to extrapolate these losses to all Hong Kong companies and estimate that annual losses reached approximately USD 1.52 billion in 2004. However, insufficient data are available about the size and nature of the population of businesses of the mainland cities of Shanghai, Shenzhen and Xi’an to determine the representativeness of our sample. At best, a ‘guesstimate’ based on untested assumptions suggests that around USD 4.9 billion is lost to crime annually in these three mainland cities.

Cite the publication as

Broadhurst, Roderic , 2011, Business and the risk of crime in China, ANU E-Press, Canberra

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