As the head of one
U.S. consulting firm asserts, “Corruption is a huge issue, it’s systemic.
Whether it’s self-dealing, phantom suppliers, kickbacks,
intellectual property theft or inappropriate dealings with governmental
officials, crime and corruption are risks companies face
when operating in China. There are many instances where, unbeknownst
to the U.S. company, various payments are being made
under the table. The company’s credo, the company’s standard
operating procedures, the company’s code of conduct, corporate
governance, best practices—all of that needs to be ingrained and
it needs to be accepted. There has to be constant training and constant
reminding” to the local Chinese staff. Chinese culture is “very
different” from Western culture. As such, “a U.S. company cannot
simply translate its compliance policies and procedures into Chinese
and expect them to have the same effect as in the U.S. The
entire approach must be tailored to the Chinese environment.”