China will declare war on business-to-business bribes next year
while maintaining its focus on corrupt government officials who
take kickbacks.
The country is revising laws and regulations and calling for
concerted efforts from the government, business circles as well as
citizens to battle against corruption in businesses which could
become a major threat to China's investment environment.
It was quite common for those bidding for business in China to
offer potential customers or partners kickbacks ranging from cash
and luxury goods to paid holiday travel. Many companies believed
that the practice was a "tacit rule" of the Chinese market until a
Los Angeles company was fined in the United States for paying
bribes in China.
DPC (Tianjin) Co. Ltd or DePu, the Chinese subsidiary wholly
owned by the Los Angeles-based Diagnostic Products Corp., had to
pay US$4.8 million in May to settle issues related to bribery
allegations.
The company was found to have paid about US$1.6 million to
doctors and others who worked in public hospitals and then recorded
the illegal payments as legitimate sales expenses.
The DPC scandal is just a "tip of the iceberg," say sources
attending a recent symposium on the eradication of bribery in
Tianjin. "Unless the practice is uprooted, business bribes and
subsequent market corruption will hinder China's economic
development," said Prof. Cheng Baoku, a professor of law with the
Tianjin-based Nankai University.
The problem has drawn the attention of the Communist Party of
China (CPC) Central Committee and the central government. A special
mission was established recently to curb bribes in the business
sector, headed by a senior official from the CPC Central Commission
for Discipline Inspection, the CPC's anti-corruption arm.
The State Administration for Industry and Commerce is also
soliciting complaints from the general public, who are inspired to
dial the consumers' hotline at 12315 to report business bribery
cases.
The Ministry of
Commerce has also chipped in, with a corporate creditability
management mechanism to fight bribes in the sales and marketing
process.
"Besides government intervention, the Chinese public should also
play a larger role in curbing bribes," says Dr. Long Taijiang with
Hunan University's clean government research center. "Citizen
involvement will help build up a sound value system that
disapproves of kickbacks and other forms of bribes in the business
community."
Meanwhile, China is working to revise its law against unfair
competition, which was promulgated in 1993 but requires amendments
to gear to the present-day market situation and varying forms of
commercial bribes.
"The revised law will define the various forms of commercial
bribes and mete out more sever administrative penalties," said a
legal expert with the State Administration of Industry and Commerce
who is involved in the law revision.
He said it is also imperative to improve the accounting system
and enhance coordination between relevant departments in the
settlement of bribery cases.
Between 2000 and June 2005, China's market watchdog investigated
into 13,606 business-to-business bribery cases that involved 5.28
billion yuan (about US$650 million).?
(Xinhua News Agency December 24, 2005)