China Business: The Rules of the Game

By Carolyn Blackman | Go to book overview

3
Corruption: ‘Legitimate
loot’

Corruption in all its forms—fraud, smuggling, piracy, extortion, misuse of public funds, nepotism—is abundantly observable in contemporary China. Chinese television news regularly shows footage of illegal activities, particularly by the sons and daughters of officials. There are the famous cases, such as the suicide in 1995 of the vice mayor of Beijing, Wang Baosen, who was accused of extracting bribes for construction permits. His co-accused, the mayor of Beijing, Chen Xitong, was later dismissed from office.

Corruption in China is brought to the attention of foreign business people by its frequency and the involvement of officials. Corruption occurs in all societies, but its incidence and the form it takes differ according to the context. China is perceived by Western business people as the sixth most corrupt Asian country after Indonesia, Vietnam, India, Thailand and the Philippines. On the Corruption Perception Index where 10 indicates ‘totally corruption-free’, Indonesia scored 2, China 3.5, the United States 7.5, the United Kingdom and Australia 8.7, Canada 9.2 and Denmark 10 (Transparency International 1998).

There are a number of ways of understanding the prevalence of corruption and malfeasance in China. To

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China Business: The Rules of the Game
Table of contents

Table of contents

  • Title Page *
  • Contents *
  • Preface viii
  • Glossary xi
  • Introduction xiii
  • Quick Reference Chart to Aspects of the Chinese Business Scene xix
  • I - The Chinese Face of Globalisation *
  • 1 - A Lot to Learn: ‘nowwhere Else in the World is It like This!’ 3
  • 2 - Sustaining Competitive Advantage 16
  • 3 - Corruption: ‘legitimate Loot’ 24
  • 4 - Communication 40
  • II - Strategic Plans Meet Chinese Reality *
  • 5 - Disappointed Expectations 55
  • 6 - Hidden Agendas 68
  • 7 - Corrupt Practices 83
  • 8 - Trust 94
  • III - Foreign Managers, Chinese Staff *
  • 9 - Shared Management 107
  • 10 - Culture Change 116
  • 11 - Skills Differential 133
  • 12 - Supervision 142
  • 13 - Manager Quality 151
  • IV - Bureaucracy and Business *
  • 14 - The Socialist Market Economy 169
  • 15 - Local Government Power 175
  • 16 - Exorbitant Levies and Sundry Taxes 185
  • 17 - Mutual Co-Operation, Mutual Benefits 194
  • 18 - Talking to the Bureaucrats 204
  • 19 - Conclusion 215
  • Bibliography 222
  • Index 226
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