Since the 1990s China has been trying to suppress corruption in their armed forces. This has involved over 100,000 separate audits and the prosecution of thousands of officers, troops and civilians. New laws were passed, and some were energetically enforced, for a while at least. Yet thanks to the spread of cell phone and Internet use during the same period there was growing opportunity for Chinese, in or out of the military, to get more incidences of corruption recorded and exposed. Eventually most senior government officials realized that all their ambitious plans for regaining lost (over the last two centuries) territory meant little if the military was crippled by corruption. Closer looks at actual military capabilities revealed that the critics (Chinese and foreign) and historians (the Chinese believe in the lessons of history) were right and that the traditional corruption in the Chinese military was very much still there, very difficult to control and not likely to be eliminated. Recent investigations, including many “speak freely without fear of prosecution” interviews with old soldiers discovered that the corruption didn’t even disappear, as many were led to believe, in the early years (late 1940s to 1960s) of communist rule in China. This was particularly demoralizing, as it was thought that there was some kind of “Mao Magic” in the 1950s when the leading founder of communist China, Mao Tse Dung seemed capable of doing anything. That included, it was later revealed, crippling the Chinese economy and causing a massive famine that killed over ten million Chinese.
For the current corruption problem passing laws doesn’t seem to help much. For example in 2010 China enacted new laws that put additional pressure on the military to maintain quality standards (in the construction and use of military equipment). At the time many were alarmed at why something like this was thought necessary. It's all because many Chinese assumed that if you got a government job, you had a license to steal. In the military, this meant weapons were built in substandard ways and equipment was not properly maintained. Military corruption is an ancient Chinese custom and accounts for most of the poor military performance in the past.
Since 2000 the government has worked to eliminate the worst of the theft and moonlighting by the troops. As a result the most outrageous and visible examples of this have been curbed. Thus military officers no longer use cash from the defense budget to set up weapons factories they run and profit from. Big chunks of procurement cash no longer disappear into the offshore bank accounts of generals and admirals.
But there's still a lot of corruption. Much is still for sale, like promotions. Lower ranking officers and NCOs can still be found selling weapons and equipment that is reported "destroyed" or "missing." Commanders who are not doing so well, can pay to have reports of their performance upgraded with a bribe. Senior government officials still have doubts about how effective the military would be in another war. It was noted, usually by journalists, that the army response to several recent national disasters (which usually sees troops doing supply, construction and rescue) had problems. This is not supposed to be reported, but the journalists discuss it among themselves, and some of these discussions got onto the Internet and outside the country. While the government tries to keep details of military corruption out of the media, they cannot control the Internet. People love to gossip, especially in a police state like China. The problem is still there and it is discussed. For the government this is actually a good thing because if forces officials to keep after the corrupt military practices, something that had rarely occurred in the pre-Internet past.