Understanding China, One Blog at a Time

An American in China

Doing Business in China

Posted by w_thames_the_d on February 12, 2011

Excerpt from Stanley Lubman- Looking for Law in China

“One experienced and thoughtful observer of foreign business in China has concluded, “[t]he sad fact is that the Chinese system today is almost incompatible with honesty” because the CCP wants to keep the party’s ruling elite above the law “unless their behavior or party politics necessitate making an example of them.” At the same time, although he describes rampant corruption, he also notes that large multinationals “can operate above the muck because their deals are often very large, very visible, and they are interacting with senior government and party officials.” Below that level, he says, “China becomes a swamp” and he singles out American companies for using middlemen to avoid the FCPA, although using middlemen does not avoid the impact of the Act. And yet, as cynical as his discussion becomes, he also adds that “[a]s China becomes more wealthy and sophisticated, it is getting easier to avoid corruption. There are many foreign companies that have policies of zero tolerance for corruption in China, and still enjoy good business because their products are the best and in demand.”

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