Corruption a real and present danger

Despite the significant opportunities, foreign business operators in China today tread a “minefield” of corruption and kickbacks, often risking imprisonment.

Asked about corruption in China at Diggers & Dealers, former Canadian ambassador to China Howard Balloch said corruption was traditionally endemic in China and opportunities to engage in corrupt activities were regularly presented to foreign business operators there.

Mr Balloch, who now heads up the Beijing-based investment advisory firm The Balloch Group, said dealing with Chinese companies and the government often involved sophisticated corporate relation programs that could sometimes motivate people in “other ways”.

“There is no question that when you are doing certain things there is an expectation that you will find ways to ensure that the people you are doing business with, will have opportunities to travel, opportunities to send their children abroad,” Mr Balloch told those at the Diggers & Dealers.

“There are also inevitably opportunities for you as a foreign operator to put money directly into people’s pockets or bank accounts or whatever.”

Mr Balloch said those who engaged in such activities risked imprisonment at home.

Despite this he said a number of major foreign businesses had established themselves in China avoiding corrupt practices.

This was not easy, however, and The Balloch Group was currently working with a number of different clients to develop approaches to steer clear of corruption.