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Corruption in China: What Companies Need to Know

By Craig Charney & Shehzad Qazi | Press Clip | January 21, 2015 | 4 pages

How can companies learn about the realities of the risk of official corruption in China?

It is common knowledge that firms often find themselves obliged to make payments or give gifts to officials to do business. Things are thought to be worsening, too: in 2014 China slid 20 places on Transparency International’s Corruption Perception Index, to 104 (out of 175). With multinationals squarely in the cross-hairs of President Xi Jinping’s anti-graft drive, the danger corrupt practices pose to firms is steadily increasing.

But how widespread is the problem – and where is it worst? Until now, data on graft in China has been based on reputation, not behavior, and national in scope, undifferentiated by region or industry. Anecdote apart, there has been no hard evidence firms can use to assess these concerns and plan their response.

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