Hamish McRae: Dealing with China will never be easy

Posted by Kendall Harmon

They do things differently in China. As the four Rio Tinto executives have found to their cost, the fact that corruption is endemic in China does not mean that foreigners who transgress get a free pass. Indeed it is because corruption is so evident that it suits the authorities to have periodic high-profile cases to try to counter it. So the case was, as in Voltaire's Candide, "pour encourager les autres".

There may be further objectives. The former mayor of Shanghai, Chen Liangyu, the man credited with choreographing the city's economic renaissance, is currently serving an 18-year sentence for corruption in what many saw as a politically motivated move. So all foreign companies operating in China should take heed of what has happened, as of course they will.

However, this particular case exposes just one of many difficulties the West has and will have in dealing with the world's new great commercial power. Multinational companies have long been aware of the political risks of operating in different jurisdictions around the world. They have had their assets nationalised, their executives under house arrest and, worse, their bank balances frozen.

Read it all.

Filed under: * Economics, PoliticsForeign Relations* International News & CommentaryAmerica/U.S.A.AsiaChinaEngland / UK

Posted March 31, 2010 at 6:20 am [Printer Friendly] [Print w/ comments]
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