Russian and Chinese Companies 'Most Likely to Bribe'

Chinese businesses are seen as second only to Russia’s in their readiness to hand out bribes abroad, according to a new survey. Many of the industries in which China is particularly globally active, such as energy, mining and public works construction, were also felt to host especially high levels of corruption. From China Real Time Report:

The results matched those of a similar survey in 2008, which also ranked Russia and China as the lowest and second-lowest respectively.

Chinese central government officials have acknowledged that corruption is a major impediment to the country’s continued economic development — Premier Wen Jiabao described it as “the greatest danger” facing the Communist Party in a speech delivered last year — and have toughened laws accordingly. A new law passed this year makes it a crime for Chinese citizens and companies to bribe foreign officials. Its regulators have begun probes of the telecommunications industry and the railway ministry, while its courts have also passed a number of tough judgments against those accused of corruption.

Still, corruption broadly remains a major issue. Transparency International said it found a correlation between corporate bribery within a country and how clean public officials are perceived to be. It cited its 2010 corruption-perception index, in which China was No. 78 out of 178 countries surveyed.

Hong Kong and Taiwan faired only somewhat better, taking 15th and 19th= (with India and Turkey) places respectively. While the perceived level of corruption in both cases remained unchanged, improvements elsewhere saw Hong Kong drop two places, and Taiwan four, since the 2008 poll. But the report focuses mainly on China and Russia, whose greater economic power, it argues, makes matters even worse:

It is of particular concern that China and Russia are at the bottom of the index. Given the increasing global presence of businesses from these countries, bribery and corruption are likely to have a substantial impact on the societies in which they operate and on the ability of companies to compete fairly in these markets.

… China and Russia’s sustained economic growth has implications well beyond their domestic economies, as their international trade and investment flows have also seen dramatic increases. Foreign Direct Investment (FDI) flows alone amounted to US$120 billion in 2010 for both countries, more than five times the value of FDI outflows from Brazil and India combined.