Tag Archives: Transparency International

A Bruising Week For China’s Multinationals

It has been a bruising week in the court of public opinion for Chinese companies working overseas. First anti-corruption campaigner Transparency International said that Chinese multinationals, along with their Indian counterparts, were most likely among companies from 28 countries involved in foreign direct investment to offer bribes to win business. Now the human-rights group, Human Rights Watch has accused China’s four copper miners operating in Zambia, all subsidiaries of the state-owned China Non-Ferrous Metals Mining Corp., of flouting local and international labor and safety standards. While acknowledging that there had been some improvement, Human Rights Watch’s most pointed comment was that China’s copper miners in Zambia treat their workers just as they do at home.

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Little Change In How Corrupt Official China Is Seen

China ranks 78th in the latest index of the perception of corruption in the public sector published by Transparency International, with a score of 3.5. Denmark, New Zealand and Singapore top the list with scores of 9.3 out of a maximum of 10. Hong Kong ranks 13th with a score of 8.4, Taiwan 33rd with 5.8 and Macau 46th with 5.0.

Hong Kong’s score puts it in the company of countries like Canada, Switzerland and Australia; China’s puts it in the same band as Italy, Brazil, Thailand and India. TI’s regional ranking puts Hong Kong at 4th and China at 14th among 33 Asia Pacific countries.

TI, which advocates for the stricter implementation of the U.N. Convention against Corruption, says that nearly three quarters of the 178 countries in its list score below a 5, indicating a serious corruption problem around the globe.

With governments committing huge sums to tackle the world’s most pressing problems, from the instability of financial markets to climate change and poverty, corruption remains an obstacle to achieving much needed progress.

Last year, China ranked 79th out of 180 countries with a score of 3.6. The anti-corruption drive has kept China’s score stable but progress on reducing corruption remains slow at best and as we have noted before the country has an ambiguous relationship to corruption in business.

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Slow Going On Fighting Corruption

China ranks 79th out of 180 on Transparency International‘s latest annual rankings of how corrupt countries’ public sectors are perceived to be. Its score of 3.6 is equal to Burkino Faso, Swaziland and Trinidad and Tobago. Top ranked New Zealand scored 9.4; bottom-ranked Somalia scored 1.1.

From the commentary on the rankings:

China has launched a sustained anti-corruption drive and intensified a crackdown on corruption in the public sector, investigating and prosecuting ministers, public officials and employees. Corrupt officials above provincial levels were disciplined and preventive measures to deal with stimulus packages to tackle the financial crisis have helped keep China’s score stable in 2009, though still low at 3.6.

The global financial crisis and political transformation in many Asian countries during 2008 exposed fundamental weaknesses in both the financial and political systems and demonstrated the failures in policy, regulations, oversight, and enforcement mechanisms. These two factors contribute to a decrease in the scores of 13 countries from the 32 countries/territories in the region, along with a reduction in the number of countries that scored above 5 in the 2009 Corruption Perceptions Index.

China dropped seven places from its 2008 ranking, when it recorded, as the report noted above, the same score of 3.6. Last year, Bulgaria, Macedonia, Mexico, Peru, Suriname, Trinidad and Tobago were its peers. Pace Trinidad and Tobago, only Mexico failed to improve its score this year.

Hong Kong came in at 12, same as last year, Taiwan at 37 (39 in 2008) and Macao at 43 (no change). China was still ahead of India at 84th (up one from 2008).

In a separate report on private sector corruption, Transparency International notes that both China and India ” boast some of the world’s largest markets and play an increasingly active and important role in global business. However, their companies are regarded by their peers as among the most corrupt when doing business abroad.”

Of the other two Brics, Brazil comes out tops on this year’s public sector perception ranking at 75th with a 3.7. Russia is 146th with a 2.2.

With massive stimulus packages and fast-track disbursements, plundering of pubic funds blocks good governance and accountability.

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