April 29th, 2007, 05:11
Michael Backman's latest column addresses China's love affair with corruption
NOT long ago China had almost no investments abroad. Today Chinese companies are big foreign investors, particularly in developing countries in Africa, South America and Asia. How do they do it? One factor is that China now has a lot of cash and is happy to pay top dollar, particularly for resource investments. Another is that Chinese officials and business people do business in the way that they do it at home: they pay bribes. In fact, evidence suggests they behave even more corruptly abroad.
China has ratified the UN's Convention Against Corruption тАФ China routinely ratifies such conventions and passes legislation but often it is for international consumption. China's Government enforces laws only when it is expedient to do so. It is very good at enforcing rules that restrict the media, for example.
But when it comes to intellectual property protection laws, they are barely enforced at all. It is the same with the UN Convention Against Corruption. So, when it comes to paying bribes abroad, out of the 30 countries that Transparency International surveyed last year, China ranked second only to India as being home to the companies most likely to pay bribes overseas. Most Chinese companies that do invest abroad are state-owned. Not only does China invest in highly corrupt markets where China has an advantage over Western investors, it invests in places that many other investors won't touch politically.The full article is at http://www.michaelbackman.com/NewColumn.html
NOT long ago China had almost no investments abroad. Today Chinese companies are big foreign investors, particularly in developing countries in Africa, South America and Asia. How do they do it? One factor is that China now has a lot of cash and is happy to pay top dollar, particularly for resource investments. Another is that Chinese officials and business people do business in the way that they do it at home: they pay bribes. In fact, evidence suggests they behave even more corruptly abroad.
China has ratified the UN's Convention Against Corruption тАФ China routinely ratifies such conventions and passes legislation but often it is for international consumption. China's Government enforces laws only when it is expedient to do so. It is very good at enforcing rules that restrict the media, for example.
But when it comes to intellectual property protection laws, they are barely enforced at all. It is the same with the UN Convention Against Corruption. So, when it comes to paying bribes abroad, out of the 30 countries that Transparency International surveyed last year, China ranked second only to India as being home to the companies most likely to pay bribes overseas. Most Chinese companies that do invest abroad are state-owned. Not only does China invest in highly corrupt markets where China has an advantage over Western investors, it invests in places that many other investors won't touch politically.The full article is at http://www.michaelbackman.com/NewColumn.html