Fraud may consitute not only the basis of civil liability but also the basis of criminal punishment in legal practice of China. You may wonder what’s the difference between a civil fraud and criminal fraud.

The similarity:

In both types of fraud, the party who defrauded the other party has the intention to deceive. If a party has not the intention to deceive, his act may cause other legal liability but not a fraud.

In boh types of fraud, the defrauded party was caused some loss of property, most often it’s cash.

In both types of fraud, the defrauding party’s behavior is positive. He proactively did something what may cause the defrauded party to believe that he has the full capcacity to fulfill his promise.

The difference:

A civil fraud is a civil juristic act against the defrauded party’s true intention, while a criminal fraud is a criminal act, meet the criminal features.

In a civil fraud, the defrauded party has the right to request the court to revoke the juristic act and claim against the defrauding party for compensation. In criminal fraud, the defrauded party should report to the police to have an investigation regarding the fraud crime.

Naturally the defrauding party in a fraud crime is liable to the defrauded party in civil law, but the defrauding party in a civil fraud not necessarily be subject to criminal liability.

To file the case, there is more strict requirement of proof for criminal fraud. Usually, in legal practice in China, the police may only accept the case as criminal in the circumstance that the defrauding party disappeared and couldn’t be reached in a normal way.

The provisions of the law on civil fraud and criminal fraud.

According to the civil code of People’s Republic of China:

Article 148

　　Where a party by fraudulent means induces the other party to perform a civil juristic act against the latter’s true intention, the defrauded party has the right to request the people’s court or an arbitration institution to revoke the act.

Article 149

　　Where a party knows or should have known that a civil juristic act performed by the other party is based on a third person’s fraudulent act and is against the other party’s true intention, the defrauded party has the right to request the people’s court or an arbitration institution to revoke the civil juristic act.

According to the Criminal Law of P.R.China

Crime of contract fraud

Article 224 Whoever, during the course of signing or fulfilling a contract, commits any of
the following acts to defraud money or property of the other party for the purpose of illegal
possession, if the amount involved is relatively large, shall be sentenced to fixed-term
imprisonment of not more than three years or criminal detention and shall also, or shall only,
be fined; if the amount involved is huge, or if there are other serious circumstances, he shall
be sentenced to fixed-term imprisonment of not less than three years but not more than 10
years and shall also be fined; if the amount involved is especially huge or if there are other
especially serious circumstances, he shall be sentenced to fixed-term imprisonment of not
less than 10 years or life imprisonment and shall also be fined or be sentenced to
confiscation property:
(1) signing a contract in the name of a fictitious unit or in the name of another person;
(2) offering as guaranty forged, altered or invalidated negotiable instruments or any other
false property right certificates;
(3) while having no ability to fulfil a contract, cajoling the other party into continuing to sign
and fulfil a contract by way of fulfilling a contract that involves a small amount of money or
fulfilling part of the contract;
(4) going into hiding after receiving the other party’s goods, payment for goods, cash paid in
advance or property for guaranty; or
(5) any other acts

Crime of fraud

Article 266 Whoever swindles public or private money or property, if the amount is
relatively large, shall be sentenced to fixed-term imprisonment of not more than three years,
criminal detention or public surveillance and shall also, or shall only, be fined; if the amount
is huge, or if there are other serious circumstances, he shall be sentenced to fixed-term
imprisonment of not less than three years but not more than 10 years and shall also be fined;
if the amount is especially huge, or if there are other especially serious circumstances, he
shall be sentenced to fixed-term imprisonment of not less than 10 years or life imprisonment
and shall also be fined or be sentenced to confiscation of property, except as otherwise
specifically provided in this Law.