Time for China to step up to global anti-corruption responsibilities
Chinese exports have been in the spotlight recently, thanks to the US-China trade war that has seen enormous tariffs imposed on Chinese goods entering the US.
Transparency International has been looking at China’s exports too but for a different reason, namely because of inaction against criminal activity that could skew the entire playing field of international trade which important treaties and conventions are meant to protect.
Our new report, Exporting Corruption 2018, assesses country enforcement against foreign bribery in line with obligations in the OECD Anti-Bribery Convention. It classifies 44 countries into four bands of enforcement based on the data available regarding how much they investigate and prosecute companies that pay bribes to win business abroad.
Although China is not a signatory to the OECD Convention, we included it along with three other major Asian exporters — Hong Kong, India and Singapore — because, together, these four jurisdictions are responsible for more than 16 per cent of global exports.
The results show that China, the world’s largest exporter, with over 10 per cent of global exports, is failing to enforce its own laws on foreign bribery. According to the information available, there have been no investigations or charges ever laid in China against its companies, citizens or residents for foreign corrupt practices.
At the same time, Chinese companies and individuals have been the subject of publicly reported corruption investigations and charges laid in numerous countries, including Bangladesh, Ethiopia, Kenya, Sri Lanka, the United States and Zambia.
China is not alone in its poor performance; 21 of the other countries rated also fall into the lowest enforcement category. But as the world’s leading exporter, the practices of China’s companies abroad have a significant influence on global trade practices.
If China does not enforce hard-won international standards for conducting business, competitors from countries that do enforce will find themselves disadvantaged. This may lead to a reduction in enforcement worldwide, destabilising the global marketplace and triggering a race to the bottom.
In our new report, we recommend that China become a party to the OECD Anti-Bribery Convention, something the G20 has repeatedly called for and the OECD has been working towards for many years. Although China has an international law obligation to enforce against foreign bribery under the UN Convention against Corruption (UNCAC), that document’s review mechanism lacks the depth of reviews and the formal follow-up to be found in the OECD Working Group on Bribery’s review process.
In response to our recommendation, one commentator stated that for China “corruption and whatever way they can influence other governments is, in effect, part of their foreign policy…they see it as one among many tools to extend the influence of China around the world, from the Silk Road to Africa to other areas of the world.”[1]
This view is overly cynical. It is not unreasonable to expect that China will sooner or later recognise that it is not in its self-interest to conduct a foreign and trade policy that discredits the country’s business representatives as corrupt partners. With the international community trying to pull together to combat corruption, using corruption as a tool for winning business around the world is not a winning foreign policy formula. One need only look to Malaysia’s break with China following the change of government in that country. Or at voters’ recent rejection of the Maldives’ corruption-accused and China-backed president in September’s election.
Under President Xi Jinping, China has undertaken a robust — and controversial — anti-corruption campaign domestically, which recognises the importance of tackling bribery for the health of the country’s economy and its institutions, but has been criticised over human rights violations. China should recognise the importance of collective efforts to combat international corruption, consistent with international human rights standards, in order to build a healthier global economy and credible institutions around the world.
If it doesn’t, the biggest losers will be the great numbers of people harmed by corruption exported to their countries.
