Much of China’s early efforts to stem corruption were focused
on activities among domestic Chinese companies and not on
China’s foreign business community. Traders, trade consultants,
and analysts have said that foreign firms are vulnerable to a variety
of corrupt practices. Although some of these firms said they had
no experience with corruption in China, the majority said they increasingly
were asked to make payments to improve business, engage
in black-market trade of import and export licenses, and bribe
officials to push goods through customs or the Commodity Inspection
Bureau, or engage in collusion to beat the system. The Hong
Kong Independent Commission Against Corruption reports that
outright bribes, as well as gifts or payment to establish guanxi, or
“connections,” average 3 to 5 percent of operating costs in the PRC,
or $3 billion to $5 billion of the $100 billion of foreign investments
that have been made there. The most common corrupt practices
confronting foreign companies in China are examined here.