China needs transnational effort against graft
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People may think there is no other country like China so worried about its domestic problem of graft.
Well, here is a candidate: the US.
The American Foreign Corrupt Practices Act (FCPA) has long enjoyed an international reputation; now the FCPA units of Securities Exchange Commission (SEC) are about to aim at new targets. Forthcoming measures will look at Silicon Valley-based companies' foreign business, especially those in China.
This is not the first time that FCPA has targeted China. The regulators are old hands. What has changed is the degree of harshness. The regulation has become more stringent, because the scale of graft involving American business in China keeps going up.
As for Chinese people, there's curiosity, interest, bewilderment, and a bit of embarrassment. What is FCPA? How does it work? Why in the name of Confucius would Americans help China's crackdown on corruption? Should Chinese anti-graft officials feel ashamed that they are so incom-petent as to need such foreign aid? Ultimately, will the Americans' campaign benefit Chinese people?
People's concerns make sense. It is a good thing for the business environment in China.
In recent years, more foreign companies quickly adapted themselves to Chinese culture of guanxi. Some foreign companies seemed to be rather competitive in public relations, and would acquire what they wanted by any means. It is an intriguing phenomenon that a lot of foreign companies find China incredibly profitable.
Apart from China's burgeoning economy and growing demands, the possibility of making excessive profits by graft here contributes greatly to foreign interest.
China has made some progress in anti-graft action. But, it is far from enough. Transnational cooperation in fighting corruption is not a familiar concept in Chinese politics. In fact, China has considerable need for international cooperation in anti-graft operations. More and more corrupt, high-ranking officials flee to Canada and other Western countries for refuge.
The cooperation with US on anti-graft, targeting foreign companies in China, helps with building trust between China and these countries. An aggressive stance on the issue stresses Chinese government's will to improve accountability.
But the first challenge would be a mechanism for cooperation. A long-term mechanism for bilateral cooperation, based on legislation, is desirable. It would be risky to make the cooperation exclusively political or diplomatic, because some US politicians may try to leverage the system, that is, use anti-graft campaign to smear China. After all, there is no contradiction between the US increasing its influence and helping China in its anti-graft effort.
In the long run, multinational anti-graft cooperation is inevitable. The first step is building a politically sustainable mechanism for cooperation.
