Growing Concerns over Corrupt Officials and Rising Prices

24 Feb

A recent study has shown that the majority of the Chinese population feel that they enjoy a higher standard of living than their parents. Despite this, there have been growing concerns over inflation and corruption in the country. Inflation remains the top concern of the Chinese public – six-in-ten consider rising prices a very big problem. Meanwhile, half say corrupt officials are a major problem, up from 39% four years ago (Kohurt. A, 2012, p.1).


(Pouschter, J. 2013)

This table shows results from a survey that clearly shows rising prices and corrupt officials are an ongoing issue. One of the main reasons for the increased concern about corrupt officials could be because of the recent conviction of Bo Xilai and accounts of personal enrichment among former Communist leaders from China’s state-owned enterprises (SOEs). It is estimated that 35% of business activity and 43% of profits in China result from SOEs (Poushter, J. 2013). Considering that much of China’s profits arise from SOEs, it is important that the population have trust and faith in the countries operation and that government officials are there to support and provide for the people. The lack of this confidence could be an underlying issue preventing China to experience future economic growth. A possible strategy to alleviate this problem is to adopt government methodology similar to countries that have seen success in this field with the majority of the population not concerned about corrupt officials. However, it is important to note that each country has been built differently therefore adopting certain strategies could lead to further problems rather than resolving the situation.

It is surprising to see that even though inflation is not present in much statistical data it is a rising concern for the majority of China’s population. In China, consumers pay nearly $1 more for a latte at Starbucks than their U.S. counterparts. A Cadillac Escalade Hybrid Base 6.0 costs $229,000 in China, compared to just over $73,000 in the U.S. It is clear to see that the price of many goods is far higher than in many other countries, a disparity that is all the more stark considering the income differences (Burkitt, L. 2013). This has occurred because China’s GDP is created by funnelling easy credit into infrastructure projects. The cost of this to fuel investment has lead to higher inflation.

It is vitally important that a time like this Chinese officials manage expectations and try and convince investors that they are in control of the situation which will instil confidence in investors. This coupled with the growing concern of corrupt officials means that action needs to be taken to ensure there is continuous sustainable growth in China.


Kohurt, A. (2012). Growing Concerns in China about Inequality, Corruption. Global Attitudes Project. 1 (1), p1.

Poushter, J. (2013). Inflation, corruption, inequality top list of Chinese public’s concenrns. Available: Last accessed 24th Feb 2014.

Burkitt, L. (2013). In China, Veil Begins to Lift on High Consumer Prices. Available: Last accessed 24th Feb 2014.


Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: