White-Collar Crime

August 25, 2011

White-collar crime,” is a phrase first used by a distinguished criminologist in the late 1930s to describe activates of the rich and powerful.  Edwin Sutherland defined “while-collar” crime as a crime committed by a person of respectability and high social status in the course of his occupation.” Source: Connecticut Public Record Search

In addition, the FBI says, “White-collar crime … is now synonymous with the full range of frauds committed by business and government professionals.”

However, when the same sort of crime takes place in China, the Western media calls it “corruption” and the term “white-collar” is seldom if ever used.

If you read this blog regularly, you may remember that I recently wrote about this topic in The Danger of False Truths. A friend said, “the degree of corruption in China is simply breathtaking,” which was his knee-jerk reaction after reading about thousands of corrupt Chinese officials stealing more than $120 billion dollars from state-owned enterprises over a period of about 15 years.

To clarify a point, before the 1980s, the government in China owned all the factories.

Then China opened its doors to capitalism, and state-owned factories were told to either become profitable or go out of business and many did close their doors.

In China, convicted white-collar criminals go to jail for a long time or are executed. Watch this video to see what happens to most white-collar criminals in the US.

Today, the surviving state-owned factories are managed as if they are private sector businesses and the managers usually do not hold political posts in the government.  If these managers skimmed money from the profits of these government-owned businesses, that crime was no different from “white-collar” crimes in America.

Usually, when I read or hear a criticism of China, I research the country where the criticism originated, which is mostly from the US.

What I learned about white-collar corruption in the United States may shock you.

Security expert Troy Williams says that as many as 30 percent of the average company’s employees do steal, and another 60 percent will steal if given a motive and opportunity. Some estimates indicate that more than $600 billion is stolen annually (in the US), or, roughly $4,500 per employee. According to the U.S. Department of Commerce, about a third of all business failures each year trace back to employee theft and other employee crime.

The FBI says employee theft is “the fastest growing crime in America”, and the U.S. Chamber of Commerce estimates that 75% of all employees steal from their workplace and that most do it on a regular basis. Furthermore, the American Society of Employers estimates that 20% of every dollar earned by a U.S. company is subsequently lost to employee theft.

However, when the theft of a $120 billion in China over a period of fifteen years elicits “the degree of corruption in China is simply breathtaking“, what describes the degree of corruption in the United States after learning that over the same period of time white-collar corruption in the US adds up to $9 trillion dollars or 75 times what was reported stolen in China?

Discover The Facts about Gambling and Drug Use in China


Lloyd Lofthouse is the award-winning author of the concubine saga, My Splendid Concubine & Our Hart. When you love a Chinese woman, you marry her family and culture too.

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The Power of Chinese Assimilation

July 9, 2010

Andrew Clark contributed a post to Politics Daily about China’s minorities and the autonomous regions they call home. As Andrew clearly pointed out, “Han Chinese make up 92 percent of the People’s Republic of China. The remaining 8 percent is made up of minority groups, mainly Tibetan, Zhuang, Uyghur, Mongolian, Miao, Manchu, and Hui (these are the major ethnic groups — China officially recognizes 55 minority populations).”

Clark concludes with, “It remains to be seen whether the Chinese government can successfully assimilate these groups, or if consistent suppression of uprisings can force social tranquility.”

The Chinese map has inflated and deflated for more than two-thousand years. Some of these minorities have been in China longer than others. The Mongolians Clark visited, like the Tibetans and the Uyghur, are three who haven’t been inside China as long since they were conquered by the Qing Dynasty (the Manchu minority), who ruled China from 1644 – 1911.

One other minority ruled China for a brief time and that was the Mongols as the Yuan Dynasty (1277 – 1367). Both the rulers of the Qing and the Yuan were assimilated into the Han culture while they ruled China. That’s was primarily because they were surrounded by Han Chinese in the capital.

Tibet broke from China in 1913 and stayed out until 1950 when Mao sent an army into Tibet, which has always been a difficult place for China to rule since sending armies there to enforce control was difficult. But today, a highway and a railroad make that journey easy. If those transportation routes are cut, there’s still air transportation. The travel distance between Tibet and  Beijing is shorter than it was a century ago.

Currently, China is adding about 40 thousand more kilometers of rail throughout China and building another grid of high-speed rail. This improved transportation system is also bringing about change and causing a Han migration that would have been unthinkable more than a century ago when most of China didn’t have electricity or roads.

For centuries, China ruled over these minorities without moving Han Chinese into their territories, but times have changed and the Han Chinese, like the Americans Europeans moving West, have been migrating into the autonomous regions for years, which may have more of an impact keeping these territories part of China than armies ever have. And if that doesn’t work, China still has the largest standing army in the world.

Clark also claimed, “the United States has seemingly countless ethnic and cultural minorities that are proud to call themselves American…”  While somewhat true, many of almost 2,500 American native tribes still  hold to their old ways and live on reservations proud to be Navaho or Sioux, Black Foot or Apache, maybe more so than being American.

If given a choice,  many of these North American tribes would jump at the chance to have their ancestral homes back. But the FBI keeps a tight watch over these American minorities, and the US Marines are always a phone call away. Then there is the fact that Alaska and Hawaii both have strong secessionist movements.

Discover more about Minorites in China


Lloyd Lofthouse is the award-winning author of the concubine saga, My Splendid Concubine & Our Hart. When you love a Chinese woman, you marry her family and culture too. 

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A Story about Corruption

April 23, 2010

National Library Week was April 11 – 17.  Friday, I attended the Golden Leaves event at Cal Poly Pomona’s University Library. Afterwards, I joined a conversation about China, and one American Caucasian mentioned the corruption in China and how flawed their legal system was. He was adamant that China had to change and become more democratic like Taiwan was. He also said there were a lot of angry people in China who wanted change.

However, there are two sides to every coin, and there are times when I’m slow to respond.  I have to think about the issue first. Now, I’m ready.

“While the true extent and cost of white-collar crime (in the United States) are unknown, it is estimated to cost the United States more than $300 billion annually, according to the FBI.”

“According to experts, the actual amount investors gave to (Bernard) Madoff over the years is probably closer to $20 billion. But even that outlandish sum will never be found; it was chipped away year after year after year. That, after all, is the definition of a Ponzi scheme: Most of the cash put up by new investors went to pay the old ones.” Source: CNN.com

“Enron was the largest company ever to go bankrupt in U.S. history.… Enron gave over $5 million to campaigns since 1998. Out of the 248 elected officials investigating Enron’s collapse, 212 received campaign contributions from Enron or its accounting firm, Arthur Andersen.

“Enron donated money to George W. Bush’s campaign and Kenneth Lay was a close friend. This week, a congressional watchdog agency announced that it will sue Vice President Cheney to get records of meetings he had with Enron officials. The agency is investigating whether the company was able to influence the energy policies of the United States government.” Source: pbs.org

“WASHINGTON—The Securities and Exchange Commission suspected Texas financier R. Allen Stanford of running a Ponzi scheme as early as 1997 but took more than a decade to pursue him seriously, according to a report further tarring the agency that missed Bernard Madoff’s huge fraud.… Mr. Stanford was indicted last June and accused of orchestrating a Ponzi scheme that swindled investors out of $7 billion.

“The report by the SEC’s inspector general says SEC examiners concluded four times between 1997 and 2004 that Mr. Stanford’s businesses were fraudulent, but each time decided not to go further. It singles out the former head of the SEC’s enforcement office in Fort Worth, Texas, accusing him of repeatedly quashing Stanford probes and then trying to represent Mr. Stanford as a lawyer in private practice.” Source: Wall Street Journal

“The US sub-prime mortgage crisis has led to plunging property prices, a slowdown in the US economy, and billions in losses by banks. It stems from a fundamental change in the way mortgages are funded.”

“On Thursday, Sept. 18, 2008, the astonished leadership of the U.S. Congress was told in a private session by the chairman of the Federal Reserve that the American economy was in grave danger of a complete meltdown within a matter of days. “There was literally a pause in that room where the oxygen left,” says Sen. Christopher Dodd (D-Conn.)

“FRONTLINE then chronicles the disaster that followed. Within 24 hours, the stock market crashed, and credit markets around the world froze. “We’re no longer talking about mortgages,” says economist Gertler. “We’re talking about car loans, loans to small businesses, commercial paper borrowing by large banks. This is like a disease spreading.”
Sources:  BBC and PBS-Frontline

 What about China?

“For one thing, the Chinese trust their government more. According to a recent World Values Survey, 96.7 percent of Chinese expressed confidence in their government, compared to only 37.3 percent of Americans.

“Likewise, 83.5 percent of Chinese thought their country is run for all the people, rather than for a few big interest groups, whereas only 36.7 percent of Americans thought the same of their country. With this relatively higher trust, China’s government and enterprises are better able to enact and implement strict policies that promote saving and growth.” Source: The Economist’s View

I wonder if the corruption in China will ever threaten the world’s economies? I’ll let China speak for itself, Economists defend China’s high savings rate.

See Peter Hessler, an expatriate, on China http://wp.me/pN4pY-kI