Published by ChinaMNC ยท Mashan
Anti-Corruption in China: What Foreign Founders Should Know
China's anti-corruption campaign continues under a long-term, high-pressure approach. For foreign founders, this signals a compliance environment that rewards transparency, proper licensing and clean local partnerships.
Anti-Corruption in China: What Foreign Founders Should Know
For foreign founders setting up or running a company in China, the anti-corruption campaign is not an abstract political topic. It shapes how local officials behave, how disputes with partners are handled, and what kind of compliance culture investors should expect. A recent government article on the topic, timed to the 90th anniversary of the Long March, offers a useful overview of the direction of policy.
The stated policy direction
At a gathering marking the 90th anniversary of the victory of the Chinese Workers' and Peasants' Red Army's Long March, Xi Jinping stressed the need to persistently advance full and rigorous Party self-governance and to achieve the Party's self-purification, self-improvement, self-innovation and self-enhancement.
In January, at the fifth plenary session of the 20th Central Commission for Discipline Inspection, Xi said the anti-corruption struggle must be advanced "more soberly and firmly." Since the 18th Party Congress, the article states, the Party has developed a path of anti-corruption with Chinese characteristics under the centralized, unified leadership of the Party Central Committee, addressing both symptoms and root causes and promoting a situation in which officials dare not, cannot and do not want to be corrupt. Xi said this path must be followed firmly.
Enforcement figures cited
The article reports that in the first three quarters of this year, discipline inspection and supervision organs nationwide opened 800,000 cases and disciplined 680,000 people. These figures indicate that enforcement remains active rather than winding down.
Xi is quoted as warning that if corruption is allowed to spread, it will damage the economic development environment, induce various risks and hidden dangers, and shake the Party's governing foundation. He also said corruption remains prone to occurring and frequently occurring, and that the high-pressure posture must not waver: those who are corrupt must be opposed, those who are greedy must be punished, and evil must be eradicated, leaving corrupt elements nowhere to hide.
Grassroots enforcement and everyday fairness
The article gives a village-level example from Shuangqiao Village, Qiaoting Township, Pingle County, Guangxi. Villagers became suspicious about the accounts of a collectively leased mountain plot. Discipline inspection cadres went to the village to verify the matter; a village cadre who had misappropriated collective funds received Party discipline punishment, and withheld rent was recovered. A villager remarked that people's hearts were united again.
The article says work is being pushed forward in areas such as rural collective "three assets" management, medical insurance fund management and elderly care services, with so-called "fly greed and ant corruption" punished so that the public can feel fairness and justice nearby.
New methods and joined-up investigations
Xi is quoted as saying that new trends and features of corruption must be grasped, methods and approaches innovated, and various corruption problems discovered promptly, accurately identified and effectively governed.
One cited example comes from Dianjiang County, Chongqing. While verifying a case involving an official who improperly hosted a wedding banquet for his son, the county discipline inspection commission found the official had a close relationship with a businessman, and ultimately uncovered serious disciplinary and legal violations. Through a campaign against improper eating and drinking, the commission seriously investigated corruption behind the conduct problems of several Party members and cadres.
The article states that unhealthy conduct and corruption are two sides of the same coin, sharing the same roots. Xi is quoted calling for integrating conduct rectification, discipline enforcement and anti-corruption, using joint investigation to punish intertwined conduct and corruption problems and joint treatment to eliminate their common roots.
The three-pronged approach
Xi's statement that the Party should promote a situation in which officials dare not, cannot and do not want to be corrupt is described as an important part of his thinking on Party building. He is quoted as saying this is not only the basic policy of the anti-corruption struggle but also an important strategy for full and rigorous Party self-governance in the new era.
The article describes efforts to strengthen deterrence, close institutional loopholes and raise awareness, with the three pursued simultaneously and in the same direction to achieve more institutional results and better governance outcomes.
Culture and integrity
In June 2022, Xi visited the Sansu Temple in Meishan, Sichuan, and said the Party should draw governance ideas and thinking from fine traditional Chinese culture. The article describes the building of a culture of integrity in the new era as a foundational project, aimed at creating a social environment that honors integrity and rejects corruption, and at eliminating the soil and conditions for corruption.
In his July 1 speech this year, Xi summarized six fine qualities of the Party, including attention to strengthening itself and remaining full of vitality, and called for resolutely removing all factors that harm the Party's advanced nature and purity.
What this means for foreign founders
For foreign investors, the practical takeaway is that China's compliance environment is being actively enforced, including at the grassroots level where permits, inspections and local partnerships are handled. Founders should expect scrutiny of dealings with officials and state-linked entities, keep clear records of payments and approvals, and avoid arrangements that could be characterized as improper hospitality or facilitation payments.
- Keep documentation clean: retain contracts, invoices and approval trails for licenses, land use and local government interactions.
- Screen local partners: conduct due diligence on joint venture partners and agents, given the enforcement focus on intertwined conduct and corruption.
- Avoid informal payments: the article's emphasis on hospitality-related investigations is a reminder that small favors can attract scrutiny.
- Follow formal channels: use official complaint and supervision channels if you encounter demands for improper payments.
This summary is based on information published by the relevant Chinese government website and is general information, not legal or tax advice.
Next step
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