This weekend I posted on how firms cope when they have to fight for business in an environment where bribery is common. I drew on James McGregor's comments about China in his 2005 book One Billion Customers: Doing business when corruption is common (March 17)
Legal bloggers Dan Harris at the China Law Blog (Chinese Nationalism: Want Jail Time With That?, Jan 21, 2007), and Craig Maginness at Going Global (Say No to Corruption and Make It Your Market Advantage, September 26, 2006) both advise against foreign firms paying bribes in China.
Harris refers to "how Western companies take an almost perverse pride in "going Chinese" by engaging in bribery and kickbacks."
Maginness points out:
- U.S. firms won't want to run violate the Foreign Corrupt Practices Act
- Chinese law is likely to be applied more strictly to a foreign firm than a Chinese firm, so you can make yourself a "hostage" to the parties that you bribe.
- Many Chinese firms would like to avoid bribery as well. Positioning your firm and product as "clean" can create a competitive advantage.
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