Murky world of corruption in China

By Michael Bristow
BBC News, Beijing



Huge amounts of money can be involved in shady business dealings
Bribery and other forms of corruption are problems often encountered by foreign businesses operating in China.

This can result in companies providing clients with expensive trips abroad, lavish meals and red envelopes stuffed with money.

But not all businesses get drawn into this murky world; some say they abide by the same high standards they observe elsewhere.

And one foreign business advisor said firms that supply good products and services will always do well - even if they refuse to be corrupt.

The use of bribery in the business world in China has come into sharp focus because of the trial involving four executives working for the Anglo-Australian mining firm Rio Tinto.

The four were sentenced in Shanghai to between seven and 14 years in prison for taking bribes and stealing commercial secrets.

But how much of a problem is bribery for foreign firms operating in China?

One British businessman, who did not want to be named, said it was a big problem, particularly in China's smaller cities.

He told the BBC of one occasion when he was trying to set up a joint venture company with a Chinese partner in Shandong province.

Often there is little understanding about China at headquarters and so regional managers hide things

Patrik Lockne
Negotiations had been going on for weeks, without any success, he said. Then, at one meeting, he was asked to step outside for a chat with an official.

"He said all the problems could be overcome - so I asked him how. He said it could be done if I gave him 1m yuan ($146,000: £98,000)," said the businessman.

Patrik Lockne, an advisor for a Swedish consultancy, said one common problem was a lack of communication between a firm's main office and its China branch.

Foreigners working in China are sometimes tempted to adopt local norms of behaviour in order to get work done, he said.

"Often there is little understanding about China at headquarters and so regional managers hide things," said Mr Lockne, who works for Springtime.

'Moving on'

Something like this appears to have happened at Rio Tinto.

The firm believed in its employees' innocence when they were first detained last July, saying the bribery accusations against them were "wholly without foundation".


Rio Tinto was quick to deny it had any knowledge of its employees' actions
At that time Rio Tinto said its workers had acted in accordance with the company's strict code of conduct.

But following the verdicts on Monday the firm said the four had been conducting their own illegal activities "outside our systems". It has now sacked them.

But not all foreign business people operating in China get tempted to do something unethical - and possibly illegal.

"I hear about it and I'm sure it happens, but I think it's the old way of doing business - times have moved on," said Rupert Utteridge, who runs the Australian telecom company Digital Techniques.

"We take people out for meals, but I would do that in Australia or Hong Kong," he added.

And, ultimately, building a successful business in China might simply be down to providing good products and services.

"There is corruption in China - of course there is," said Brian Outlaw, executive director of the China-Britain Business Council, which advises firms wanting to set up here.

"But companies can maintain their ethical codes. They can build in exactly the same way as anywhere else - and still be successful," he said.

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THat exactly is my point, with the level of unemployment in the country you find most capital projects in our country going to chines comp. as if they are whiter than white.only God knows how many palms have been greesed to secure those contacts.

Yeah that's right, i even watched the report of their sentencing on CNN, the government of Autralia had said the sentencing was not going to affect any bi-lateral relations btw Australia and China even though they were not too pleased with the lack of transparency in the courtroom proceedings.They are even demanding clarification 4rm the Chinese Government.
Imagine sth like dis happening in Nigeria and even though there is pressure on the government 4rm the culprits government: am %101 sure our government would bulge and give in. . . China does not take corruption lightly, if U are caught, the punishment is capital. I was watching an armnesty international report on world wide executions this morning and the reporter gave the statics of executions in the region of a thousand and above this excluded executions in china as the chinese government does not want its execution number public but analyst reckoned that the number of executions in China is more than that of the whole world put together, .lol. . That is a country making serious attempt at fighting the scourge, who gives a 4ck abt human rights, if he is found wanting execute the moda4cker, he should ve thought about HR b4 indulging. . .go go Chinco

imagine how many R.I.P we would have had in Nigeria by now, erasmus, Cecilia ibru, allamms ,ibori, . ibb, obj , tinubu , the list is endless. . mofos.