Don’t Quote Me (on Corruption)

Related entries: Business Issues, General, Risk & Law

There has been a lot written about corruption in China over the past week, following the detention of Shanghai Party boss Chen Liangyu – and it is a subject very worthy of inclusion in the “Don’t Quote Me” series.

My choice is from an article “The Unpublished Lang Xianping Interview” on the EastSouthWestNorth blog, and is from an interview about corruption in Shanghai’s pension fund that was given (but not published) before the current scandal broke. It seems that the article was suppressed, and that it only came to light after finding its way online. Lang Xianping, who hosts a popular TV show, “Lang chats about finance”, said:

    “Corrupt government officials, corrupt business people, corrupt scholars, this corrupt iron triangle will be the greatest roadblock to Chinese reforms and they are public enemies.”

Well said. And bravely. While the media is suppressed, its role as a watchdog will suffer. Let’s hope a happy balance can be reached.

2 Responses to “Don’t Quote Me (on Corruption)”

  1. davidacarnes Says:

    You hear lots on corruption in China. But one relatively ignored topic is corruption among foreign investors in China. A lot of that is justified by the idea “that’s just how business is done over here”. There is some truth in that one, but I’m wondering just when China is going to start making examples of foreign companies too. If you are from the US and you are involved in corruption in China, be aware that you’re subject to criminal liability not only under Chinese law but under US law as well (via the Foreign Corrupt Practices Act). Some other Western countries have equivalent legislation, some do not.

    http://www.chinacompanystartupguide.com

  2. Jeremy Gordon Says:

    There are certainly examples of foreign companies being caught up in corruption in China. Recently reported ones include Lucent, InVision technologies, Diagnostic Products Corp. (http://www.washingtonpost.com/wp-dyn/content/article/2005/08/21/AR2005082101074_pf.html. h/t China Law Blog).

    However, I think that the bulk of the problem is domestic, and that official action is often motivated by political (rather than legal) considerations. That said, foreign companies certainly do face (legal and commercial) risks in China, and at home, if they engage in corrupt practices, and so such things are best avoided.

    See more on corruption issues in my earlier post: http://www.chinabusinessservices.com/blog/?p=248.

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