A series of multinational corporations in China appear on commercial bribery lists from time to time, and this comes quite out of expectation. A study showed that the number of multinational corporations involved in commercial bribery cases in China has been an upward trend. In 10 years China has investigated at least 500,000 cases of corruption, of which 64% are related to international trade and foreign companies.
A report by China Youth Daily on August 3 aroused the attention of the media in China. It gives the following reasons behind those multinational bribery cases.
If it is the "hidden rules" in the Chinese business circle that leads to passive "dissimilation" of transnational corporations, then it is the special structure of interests in the Chinese market that pushes the commercial bribery by multinational companies from passive to initiative.
First of all, the enormous profits in Chinese markets lure multinational giants to take bold actions when facing "hidden rules". Take the telecommunications industry for example, China's telecommunications market accounted for 10% to 15% of the global telecommunications market. Lucent's financial report shows that the Chinese market has become the second largest telecommunications market worldwide. Facing China's huge market and profit margins, commercial bribery became Lucent's key to open Chinese business door.
Secondly, the existence of monopoly privileges drives multinational corporations to take risk. Monopoly of resources goes with commercial bribery. In monopoly industries and in industries strictly controlled by the government, employees control too many resources.
In the absence of comprehensive supervision, people who hold rights, such as the right of administrative examination and approval and the right of allocating resources naturally become the target of commercial bribery. Multinational companies who are eager to develop the Chinese market have become a major player in commercial bribery.
Thirdly, the imperfect system enables multinational corporations to be unscrupulous when facing "hidden rules". The existing legal system is not yet perfect and cannot adequately deal with commercial bribery; the legal punishment is not severe enough. Besides local governments indulge irregularities by multinational corporations, the business sector has long been in "habitual silence", all this results in pessimistic expectations of participants in bribery, and also in some way fuels the violation of regulations or codes of conduct in multinational corporations in China.
By People's Daily Online
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