The mainland needs to tighten its criminal code to bolster its financial security and crack down on people manipulating the domestic and Hong Kong stock markets, according to Wang Maolin, a vice-chairman of the National People's Congress's (NPC) law committee.

Speaking in a session on Sunday to review amendments to the Criminal Law, Mr Wang said the problem of financial fraud was very serious and many officials were able to escape prosecution despite committing serious crimes against the state and investors.

In response to another NPC member's comments about stock market crimes in Hong Kong, Mr Wang said the mainland faced similar problems.

"We have similar problems with mainland companies listed in Hong Kong," yesterday's China Youth Daily quoted Mr Wang as saying. "In some cases, there were people who embezzled billions of yuan of capital but were able to go free. These people escaped responsibility when reassigned back to the mainland."

The vice-chairman said the lack of financial discipline was a common problem of listed companies on the mainland.

"The problem of listed companies drawing funds [from the market dishonestly] is very common on the mainland too," he said.

"Cases involving 30 million yuan, 50 million yuan or even hundreds of million yuan are very common.

"We will sacrifice the interests of small shareholders and investors if we fail to crack down on such [dishonest] phenomenon."

Mr Wang also lashed out at bank employees who approved loans in return for kickbacks.

"Based on cases we have seen, there are people who have - more than once - cheated banks of millions or even hundreds of millions in credit," he said.

"Some of these cases involved collusion between bank staff and outside people.

"Through the various loopholes in our banking system and the convenience they enjoyed in their work, some bank staff are stealing our bank deposits away."

Xu Lanting , a criminal law professor at the China University of Political Science and Law, said the NPC had stepped up legislative efforts against financial crimes.

"Financial security is like our national defence. Our economic lifeblood will be drained if our legal system has so many loopholes," Professor Xu said.

"If we fail to plug these loopholes in our financial system, we will never be able to build up our financial market as part of the global financial system."

According to Xinhua, amendments under review by the NPC Standing Committee focus on market manipulation, bribery associated with commercial activities, crimes against listed companies and fraud to obtain bank loans.

The Standing Committee session ends tomorrow.