Patterns and Causes of Official Corruption in the Real Estate Transactions in China

• In Event: ACCCJ Corruption and Crime in China

Abstract

Land is one of the most critical resources in any country. According to the Chinese Constitution, the state is the sole owner of all land resources, and only government officials have the right to approve land sales. As China’s economy has gradually become the second largest one in the world, its real estate market has also exploded astronomically. The average annual return for the real estate in China is about 20% from 1999-2012 that made China as the # 1 hottest real estate market in the world in 2012. Governments and officials at various levels have collected more than 27 trillion RMB from 1999 to 2015 through land sales alone but they do not have any obligations to show how the money is used. China’s political structure and its land policy have created an unprecedented opportunity for official corruption. Recent studies show that nearly 90% of official corruption cases are related to real estate. This study will examine the patterns of official corruption in real estate, and how government officials abuse their powers for huge personal gains. It will analyze major corruption cases in real estate and assess major causal factors in China’s real estate marketization process.

Author

• Xiaogang Deng, University of Massachusetts Boston