Global Compliance: China .Historically a nation opposed to foreign investment, the Chinese economy has recently shifted into a modern, market-oriented system that caters heavily to international business. Today, the country is a major player in several important industries such as manufacturing, food processing, petroleum and textiles.
Now, business leaders across the world eagerly turn their eyes towards China and notice a country that relishes its newfound power and the attention that comes with it. Such change doesn’t come without its share of obstacles with thousands of years of history come deep-rooted traditions, some of which test the boundary of moral principles as they are understood in the western world. Bribery and corruption, for example, are not just common, but each runs rampant throughout the nations business practices. In order for Western companies to enter Chinas booming market, its first necessary to understand the unique cultural and legal processes involved in conducting business in the country.
THE ETHICAL CLIMATE FOR FOREIGN ENTERPRISES
When international business managers and chief executives open dialog about expanding their business to China, they discuss topics such as intellectual property protection, stifling government bureaucracy, lack of product quality standards, discrimination issues and rampant corruption in business dealings. While the government is making attempts at improving these categories, many concerns remain unaddressed.
Although China has significantly strengthened its intellectual property laws since joining the World Trade Organization (WTO) in 2001, the country still has the highest piracy rate in the world an estimated $1 billion is lost each year to Chinese piracy alone. Even though the Chinese government formed the State Intellectual Property Office in 1998 to help enforce patent, trademark and copyright laws, but this organization is considered relatively ineffective by outside sources.
The government was also forced to reexamine its quality standard regulations after a series of scandals involving contaminated or harmful toothpaste, pet food and, most recently, toys. New committees were formed to tackle these issues but it remains to be seen how productive they will be.
Discrimination issues still run rampant throughout the country. Gender discrimination against women has been documented for years. More complicated are the discrimination issues involving migrant workers moving from rural farmlands to cities and towns. There have even been reports of height and other physical requirements for obtaining certain Chinese government positions
Business dealings with the government are notoriously strewn with unethical practices, both under-the-table and overt. A strong sense of family and loyalty to ones friends leads to a very nepotistic business environment. Some Chinese refer to the famous philosopher Confucius who surmises in Analects, “The father conceals the wrongs of his son, and the son conceals the wrongs of his father. This is justice.” Foreign businesses entering the market with no significant political connections have a considerably more difficult task of integrating than those who do.
Corruption isn’t limited to government dealings, however. It’s common for Chinese business deals to include various perks and benefits for the buyer, including lavish vacations and expensive electronics, in addition to any negotiated price to help secure important contracts. While the Organization for Economic Cooperation and Development (OECD), whose members include the United States, Japan and the EU, has helped curb corruption in international business dealings in recent years, China has been and remains notably absent from the group.
Ultimately experts believe that China is proactively working to fix its ethical problems. Shanghai is a positive example of a city leading the way in this regard. One theory for the improvements points to the increasing standard of living for many Chinese who no longer rely on shady benefits or under-the-table bribes for their livelihood. As Chinese businesses increase their presence throughout the world, they will consequently bring their ethics with them, good or bad. Politicians and business leaders in China are aware that ethical policies are demanded by consumers in a free-market economy nowadays. If the country and its businesses want to compete with other economically successful nations, the improvements will have to continue.
ADS HERE !!!
