Survey: Corruption Threatens China

Chronic corruption in China, Vietnam and India could erode their economic competitiveness if they fail to reduce it, warned a report released Wednesday.

The three countries ranked among those seen as most corrupt in Asia in an annual survey of 1,400 business people by Hong Kong-based Political and Economic Risk Consultancy Ltd., or PERC.

It warned that foreign companies in those economies will be more sensitive to bribery and other corruption as land and labor prices and other business expenses rise.

“Corruption is yet another cost,” the report said, “and if the governments do not reduce it as an issue, the competitiveness of their environments, at least in terms of producing for export, will be eroded that much faster.”

Throughout the region, those surveyed think governments have made little progress in reining in corruption over the 20 years that the annual survey has been conducted, the report said.

“Even more depressing, in a few cases perceptions today are worse than a decade ago,” it said.

The Philippines was seen as most corrupt among 13 economies, receiving a 9.0 rating on a 0-to-10 scale, followed by Thailand at 8.0 and China and Indonesia at 7.98. Those seen as least corrupt were Singapore at 1.13, Hong Kong at 1.8, Japan at 2.5 and Macau at 3.3.

China’s image will be affected by how it handles any corruption stemming from this summer’s Beijing Olympics, which the authorities are eager to show are graft-free, PERC said.

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