ICAC chief Bertrand de Speville yesterday raised concerns that Chinese state-funded enterprises are increasingly corrupt, giving local businessmen and civil servants opportunities for graft never seen before. ''As far as we know we have investigated 301 cases having, or initially thought to have, a PRC connection . . . but so intertwined is Hong Kong and China business that the figures I have given you may actually be higher,'' Mr de Speville told the Countdown to 1997 business conference. ''I anticipate that some of you here expect me to foresee Hong Kong being drowned in an inexorable wave of cross-border crime and corruption in the run-up to 1997. ''Those of you who expect such a prophecy . . . will be disappointed. We are concerned, but we are not despondent,'' he said. Increased cross-border trade exposed civil servants and businessmen to temptations and double-standards on a scale not before realised while Chinese workers ''inclined to venality'' were susceptible to corrupt advances here. Recent investigations involving mainland firms had led to the charging of 19 PRC nationals, 21 Hong Kong civil servants and 400 citizens. There was an 18 per cent increase in the number of reports of corruption during the first two months of this year compared with the same period last year. This followed a 44 per cent rise during 1993 compared to the previous 12 months. Mr de Speville said: ''Corruption was once institutionalised in Hong Kong and was considered by those claiming to be experts to be a cultural trait of the Chinese people. Our greatest success is that we have turned that so-called trait of our community into a high level of intolerance of corruption. That can happen in China, but the authorities themselves realise it is likely to be a long haul.'' Earlier, Jimmy McGregor, a legislative councillor and representative of the Hong Kong General Chamber of Commerce, called on business to co-operate more closely with authorities to help tackle the problem. ''We will also need assistance from China which has its own problems similar to those we faced in Hong Kong three decades ago,'' Mr McGregor said. ''The scale of the problem is much greater, however, and a very strong effort will be required if Hong Kongand China are to find common ground in clean government.'' He said stable legal institutions were crucial. ''The market cannot be left alone to function without the protective screen of legislation, supervision and, when necessary, regulatory legal action to correct imperfections and to punish offenders.'' He said autonomous rule in Hong Kong was ''absolutely vital'' to its success. ''I do not think that any business person will suggest that the law is somehow at odds with business and in conflict with business development, at least not here in Hong Kong. ''The two work hand in hand and every business activity has some form of legal association. Business generally contributes its collective knowledge to the development and operation of the legal system.'' But Mr McGregor warned that Hong Kong and China had fundamentally different legal systems and that ''very strong efforts'' would be needed to find common ground. ''The transition to Chinese sovereignty and the subsequent relationship between these two different legal systems will pose very special problems for Hong Kong.''