Short answer: In China, an employee who uses his or her position to take company money or property can be convicted of embezzlement under Article 271 of the Criminal Law and sentenced to up to three years in prison for a relatively large amount, three to ten years for a large amount, and ten years to life for an especially large amount, plus fines. Criminal prosecution starts once the amount reaches RMB 30,000.

What conduct counts as embezzlement?

Article 271 targets employees of companies, including foreign-invested companies, who exploit their job duties to unlawfully take company assets for themselves. In practice this covers a salesperson pocketing customer payments, a finance officer transferring company funds to a personal account, or a manager inflating reimbursements and invoices. The key element is taking — using the position to permanently deprive the company of its property.

Three points matter. First, the filing threshold is RMB 30,000, set by the Supreme People’s Procuratorate and the Ministry of Public Security in Article 76 of the 2022 Provisions on Standards for Filing and Prosecution (II); the same standard applies to private and state-owned companies. Below that amount, the company’s remedies are civil or disciplinary, not criminal. Second, if the offender is a state functionary working in a state body, or assigned to a company by a state body, the case follows the harsher corruption rules on embezzlement of public funds under Articles 382-383 — a separate regime from ordinary employee embezzlement. Third, temporarily borrowing company money with the intent to repay is a different crime — misappropriation of funds under Article 272 — which carries lighter penalties and has a specific mitigation rule when the money is returned before prosecution.

What this means in practice

When a Chinese employer discovers employee theft, the usual route is to report the case to the police and cooperate with a forensic accounting review; the criminal case and a parallel civil claim for recovery can proceed together. For employees, returning the money and admitting the conduct early are the most important mitigating steps — courts treat full restitution as a major sentencing factor, and a first-time offender who makes the company whole will generally receive the lower end of the applicable band.

Example (hypothetical): a sales manager at a Shanghai trading company redirected RMB 90,000 of customer payments into a personal account. When an audit exposed the gap, the company reported the case and police filed it under Article 271. The manager admitted the conduct and repaid everything before trial, and was convicted within the first sentencing band — up to three years — with the court crediting the full restitution. Cases with much larger amounts and no repayment routinely produce sentences in the three-to-ten-year band.

Bottom line: RMB 30,000 is the criminal threshold, and the penalties climb steeply with the amount. Employee embezzlement is one of the most prosecuted white-collar crimes in China, and it applies to private and foreign-invested companies just as much as to state firms.

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Wang Guan | Co-founder, Beijing Haolue Law Firm | +86 17813108512