According to recent corruption reports published by Transparency International, China is the 79th least corrupt nation among the 175 countries on whom the survey was conducted. Corruption rank in China averaged 68.32 from 1995 until 2016, reaching an all time high of 100 in 2014. According to the report, the corruption percentage has increased over the years. This report takes us to the past times when China had taken quite a few measures regarding cutting down corruption. The nation has formulated certain laws that were enforced to curtail corruption in China. What we could gauge from the enforcement endeavor are given in the following points:
- China is always serious about curtailing corruption and the movement had started with the pharmaceutical industry. Corruption in China is rampant and thus there were steps taken to cut it down by the government. The government was going after both foreign and domestic companies, but the matter for foreign companies was focused way more than the domestic ones. This is all part of the corruption reduction movement in China because the natives are sick of it.
- China always kill the chickens to scare the monkeys in such situations. Here the foreign companies are referred to as the chickens while the domestic ones are considered to be the monkeys here. This has always been the unwritten rule in Chines economy to track down the foreign companies during difficult times.
- China focused on the pharmaceutical industry because the natives were unhappy regarding the medical care pricing. The intention of Chinese government behind this is to show people that they have tracked down the foreign companies which are the root cause for price hike and thus they need to be shut down. The government is aggressively working to solve the problem.
- The focus on foreign pharmaceutical companies is also due to the fact that the government wanted to make the field equal for the Chinese companies. China still continues to do such things and employ such critical measures to save the interest of homegrown companies. They do not want the foreign companies even if they actually qualify for business to dominate the industry.
The basic takeaway from this:
- China is really unpredictable in its measures for curtailing corruption. Also, it is unpredictable regarding enforcing those laws frequently. Chinese government’s behavior with the foreign companies has always been that of a foster child. They always strike more on foreign companies to safeguard the interest of the homegrown companies. It has struck down and still continues to strike on the foreign companies lot more. As a result, the foreign companies have been hit the worst in this regard.
- Another very important point is that, in case, you are doing business in Chinese environment with such a thing which is politically sensitive, then you have to worry a lot more and be extra careful. You may be hit anytime. This is a common practice in Chinese business environment.
For all those foreign companies out there, the Chinese lawyer advises that you have to work really hard, to become the China statistic. This will remain the common practice in China, but you will have to cope with it in a smart way.