Going Easy on Entrepreneurs
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A specialist in crimes committed by private entrepreneurs， lawyer Wang Rongli has noticed a drastic change over the past few years businesspeople convicted of economic crimes are becoming far less likely to pay with their lives.
The proportion of death sentences for white-collar crimes which may result in an immediate execution handed down in Chinese courts has seen a constant and steep decline， from 35 percent in 2009 to 2 percent in 2013. Data indicate that in 2013， a total of five entrepreneurs nationwide were actually executed after receiving death sentences.
In the meantime， lighter punishments jail sentences of less than five years have been on the rise， from zero to 40 percent in the same period. In 2013， 80 convicted entrepreneurs were sentenced to less than five years in jail.
These two sets of data come from a report on white-collar crime published by China Youth Daily’s Public Opinion Monitoring Center， and economics and law magazine the Legal Daily， with reference to reports by Wang Rongli and the Institute of Criminal Science at Beijing Normal University.
Getting Heavier
Over the past five years， two amendments have been made to China’s Criminal Law， one in 2009 and another in 2011. Insiders believe the trend of increasingly lenient sen- tences for economic crimes began with the 2009 amendment. Previously， treatment of economic crimes in the courts had been growing increasingly severe， in terms of both charges and penalties.
Before the promulgation of China’s first Criminal Law in 1979， no economic crimes legislation existed in China. Rooted in a heavily politicized societal backdrop of class struggle， the majority of crimes in the first Criminal Law were classed as “counterrevolutionary activities” and punished accordingly. Indeed， given the dominance of planned economics at the time， there was little space for public participation， let alone criminality， in the economy.
In the Criminal Law of 1979， 15 articles related to economic crime. Meanwhile， despite there being 27 crimes punishable by death， none were white-collar.
However， the advent of Reform and Opening-up in 1979 opened the floodgates for entrepreneurial spirit and the pursuit of financial gain among the populace. With private economic activity flourishing， the extant criminal law quickly became outdated new laws were added， and with the eventual promulgation of China’s new Criminal Law in 1997， there were over 10 separate laws relating to economic crimes.
The laws during the chaotic transition from a centrally planned to a comparatively market-based economic strategy reflected the government’s will to suppress economic crime， and were characterized by heavy penalties. For example， the 1979 criminal law did not prescribe the death penalty for theft， but a “zero-tolerance” campaign in 1983 saw a separate criminal law that theft of money or goods at or above a certain value was punishable by death.
Meanwhile， in areas with loose legislation， a large number of administrative regulations， local regulations and even official documents were used as temporary laws. The “crime of speculation，” an accusation infamously leveled at many early business activities in China， was not defined in the 1979 Criminal Law. Governments in different regions gave wildly varying definitions of the charge. In 1982， 30，000 people were accused.
In 1987， the Provisional Regulations on Administrative Punishment upon the Crime of Speculation finally defined 11 different kinds of criminal speculation. The result was that the accusation became a “pocket crime” a subset of several crimes that could be lumped together due to non-specific regulations.
The crux of the problem of heavy penalties in Chinese law has long been that the government instills its own demands into legislation and judicial interpretation. The underlying interests of the government in the law have proven to have hidden perils.
When the new Criminal Law was released in 1997， in Chapter Three of the “Special Provisions” section， articles regarding the crime of “sabotaging the socialist market economy” had increased to 92， from 15 in the 1979 version. Among these， 16 were punishable by death and accounted for 23.5 percent of all 68 capital crimes on China’s statute book.
However， the Criminal Law of 1997， enacted during the early stages of a market economy， became insufficient for the drastic economic changes that ensued， and thus needed constant amendment. Most of these amendments raised the severity of penalties. In this process， the Criminal Law incorporated more economic crimes， while adjusting its penalties to a level seen as appropriate to the legislation.
Now， there are more than 140 economic crimes defined by separate articles， criminal amendments and judicial interpretations.
The sixth amendment to the law in 2006 made the biggest change， amending 20 articles， including seven related to economic crime. It added the crime of illegal use of funds， increased the classifications of upstream money laundering crimes from four to seven， and expanded the definition of commercial bribery to include people outside the economic sectors.
The Criminal Law’s expansion of the scope of economic crime peaked in 2006. Among the 92 economic crimes in the Special Provisions， only 11 were punishable with penalties with a maximum sentence of three years， accounting for 10 percent of all crimes in Chapter Three of the Special Provisions. 16 had a maximum sentence of capital punishment， accounting for 23.5 percent of all capital statutes in the Criminal Law.
Light or Heavy？
The trend of reducing penalties for economic crimes began with the seventh amendment in 2009. One of these changed the “crime of tax theft” to the “crime of tax evasion，” a more neutral and appropriate wording in the context of economic crime. Also， first-time violators could avoid judicial penalties by paying the requisite back taxes and fines.
Academics in the legal field tend to agree that the amendment was a “win-win” law entrepreneurs lost no freedoms， resulting in less interference with the operations of companies， while the government avoided tax losses and received more income in the form of fines.
Those who support heavy punishments believe a stronger hand would do a better job of preventing such crimes. Opponents， on the other hand， believe balance is needed between heavy and light penalties they argue that while fear can be a deterrent， heavy penalties breed public sympathy with criminals as well as earning contempt for the law.
Criminal law academic Su Huiyu believes that， based on the retaliation principle of criminal law， economic， rather than criminal penalties， are more effective in dealing with white-collar criminals.
The eighth amendment， enacted in 2011， further reduced penalties for economic crimes. This amendment abolished the death penalty for 13 non-violent crimes， accounting for nearly one-fifth of all 68 capital statutes in China’s Criminal Law.
Of these 13 crimes， nine are economic， accounting for 56 percent of white-collar death sentences.
Professor Gao Mingxuan of China University of Political Science and Law has been promoting the abolition of capital punishment for economic crimes. Gao participated in the early research and preparation work of the eighth amendment. One of his arguments against the death penalty is that it deprives the offender of the opportunity to atone for his or her crimes.
Another widely accepted viewpoint states that there are often many motivations behind economic crimes， not all of which are addressed by executing offenders.
Although the eighth amendment abolished nine capital statutes， industrial insiders are expecting more to follow. In 1988， the Chinese government signed the International Covenant on Civil and Political Rights， in which Clause Two of Article Six rules that “In countries which have not abolished the death penalty， a sentence of death may be imposed only for the most serious crimes…”
Professor Gao believes that according to the Safeguards Guaranteeing Protection of the Rights of Those Facing the Death Penalty adopted by the Economic and Social Council of the United Nations， only intentional crimes that result in death or other severe consequences are viable under this definition. Gao understands that this includes serious violent crimes and crimes where the object of the act has the same value as a human life a definition that would exclude economic crimes.
Regarding how to abolish legally the death penalty for economic crimes， experts suggest using the eighth amendment of the Criminal Law. The nine capital statutes abolished in this amendment have long been put aside in legal practice， becoming de facto “dead” penalties. Their abolition， many in the legal field agree， would be welcomed.