By Alexander Diamond
The CEO of
China’s fourth largest steel producer is being investigated for violations of Chinese
anti-corruption law. This pursuit of yet another industrial leader follows
a massive crackdown on corruption by the CCDI (the CPC’s anti-corruption
authorities) that has led to the arrest of some of China’s most powerful
politicians, military officers, and industrialists. Although Chinese
authorities have only pursued charges against one foreign citizen thus far,
this domestic enforcement trend has significant implications for both Chinese
and international businesses who can no longer rely on the long-accepted
informal guanxi system of gift/favor
giving to political allies. Time will tell if the increasingly powerful CCDI
begins to consistently pursue charges against increasingly integrated
U.S. businesses that are already subject to FCPA enforcement actions.
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