A growing problem for foreign firms who play the China game. Translated by CDT from China News Agency:
Telecom giant Alcatel-Lucent has agreed to settle a bribery case with the U.S. Justice Department and Securities and Equity Commission, paying out a $2.5 million settlement. Its misdeed was bribing Chinese officials by paying for their 314 trips to the United States and other countries, mostly tourist travel, during 2000-2003. The total cost for these trips was a few hundred million US dollars.
The US Justice Department alleged that during those years, Lucent sponsored Chinese official trips to the U.S., Europe, Australia and other countries on the grounds of “factory visits” and “training.” In fact, Lucent had already outsourced most of its manufacturing overseas, and there weren’t any facilities for Chinese officials to see in the traveling destinations. Most of the trips, according to the Department, lasted for two weeks and cost 25,000-55,000 US dollars each.
Analysts say China is a lucrative telecom market, but also one where there’s a high level of business bribery. A case concerning Siemens is still under a bribery probe. But the Lucent case serves as a wakeup call to multinationals in China who are trying to find the balance between playing the “hidden rules of the game” in China and Western business codes. [Full Text in Chinese]