Foreign traders make several types of payments to facilitate sales
in China. The most common method is a trip abroad. Chinese
officials, who rarely have a chance to visit overseas, often preferforeign travel to cash or gifts. (This was especially true when
few PRC officials had been abroad.) As a result, traders report
that dangling foreign trips in front of their PRC clients has become
a regular part of negotiating large trade deals that involve
products with a technological component. “Foreign travel is always
the first inducement we offer,” said an executive involved
in machinery trade. In most cases, traders build these costs into
the product’s sale price. Some trips are “reasonable and bona
fide expenditures directly related to the promotion, demonstration,
or explanation of products and services, or the execution
of a contract with a foreign government agency,” but it may be
another matter when officials on foreign junkets are offered
large per diems and aren’t invited specifically to gain technical
knowledge.