Is the U.S. Helping China to Fight Corruption?

Fighting corruption is one of the most important issues in China, and China’s anti-corruption efforts have been viewed with greater interest by the U.S. across the Pacific. Recently, the U.S. Securities and Exchange Commission has found a new target in high-tech companies on the West Coast because many of their commercial partners are from the other side of the Pacific in China.

Upon hearing this piece of news, the Chinese may feel more than simply the fact that Americans are sticking their nose into their business. As the U.S. judiciary ratchets up action against the involved companies, the Chinese may feel curious, puzzled and even embarrassed: “Americans are inserting themselves into China’s corruption problems,” “the Americans probably don’t mean well to the Chinese by doing this,” and “will this bring pressure onto China’s own anti-corruption capacity?” These comments on an Internet discussion thread show that the Chinese are very concerned about international cooperation against corruption.

The Foreign Corrupt Practices Act (FCPA) has been a sword wielded by the Americans to extend their judicial powers to fight against the misdeeds of American companies committed on foreign soil. Over the years, these anti-corruption personnel have become old hands at dealing with China. They possess significant understanding of Chinese affairs, and the punishments against those guilty of corrupt practices have been strengthened.

We must confess that the offshore anti-corruption plan of the U.S. is beneficial for China’s commercial environment. For a long time we have always considered multinational companies as fair participants on the international stage who play by the rules of the game, unlike their Chinese counterparts, whose methods of operation fall firmly in the ‘guanxi’ school of thought, valuing connections and nepotism over efficiency.

In reality, after setting foot in China, these foreign companies have learned and cultivated the culture of business and personal connections quickly, as they all possess a common desire to create the largest amount of profit possible without breaking the law. Recent years have seen many Western companies learning and practicing the manipulation of public and government-corporation relations, bringing them excessive profits in a legally immature China.

Over the past years, China has been stepping up supervision on Western companies by strengthening and improving its capacity to act legally and administratively. Nevertheless, the gap between that of China and the U.S. is still wide. If the U.S. judicial system cooperates with China in supervising their companies’ operations in China, this will constrain the companies’ ability to engage in illegal activities. This will help clean up China’s commercial environment.

Rapid globalization has significantly influenced the ecosystem of corruption and has enabled criminals to take advantage of varying legal and judiciary systems in different countries. For example, the Chinese smuggler Lai Changxing and other criminals have taken advantage of the differing laws in Canada and other Western countries to escape prosecution. Thus when it comes to rooting out both domestic and foreign corruption at home and hunting down escaped corrupt officials, China would benefit a lot from international cooperation.

Of course, reality never lives up to hopes and dreams. There is no such thing as a free lunch in the world. It is obvious that some American politicians will take this as an opportunity to interfere in China’s judicial independence, or trade this issue for some other benefits, or even advocate the American image by exporting their values and ideologies. We must pay close attention to these possibilities.

In the long run, international cooperation in confronting corruption is a trend gaining greater force, and the key is that we will need to grab the upper hand in such a partnership. If China is well-prepared and is more active, it can build up an image of a positive and open country. By learning from other countries’ experiences in combating corruption, the commercial environment at home can be improved. In all, if it can establish an effective and efficient cooperative mechanism with other countries, China’s corruption problem can be alleviated.