Essay: China and Globalization Three Research

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[. . .] All of these activities come under the classification of bribery for purposes of lubrication. Extortion is the demand for bribes from government officials as a cost of establishing or continuing a business, and both of these are illegal under U.S. law (FCPA 1977). In Chinese culture, the art of building connections or relationships (guanxi) may not necessarily follow the same ethical and legal standards as the West. Obtaining favoritism through lubrication means making payments or giving gifts requesting that "a person perform a task faster or more efficiently, whereas subornation is an act of asking officials to neglect their duties or do something illegal," which is a crime in China (Wang and Leung, 2001, p. 105). Of course, making payments of giving gifts in return for benefits is also illegal in China, as is bribing officials to move faster or ignore violations of the law. The Chinese Communist Party has Ten Taboos against lobbying those of higher rank, taking and offering bribes, intimidation, deception, arranging jobs for others, giving gifts and banquets, and covering up illegal activities (Case 2-5). Extortion of businesspeople is also a very common practice among organized crime groups or corrupt state officials. One recent example was the case of the Australian businessman Michael Ng who was extorted to hand over shares in a business he had purchased to government officials in Guangzhou or be prosecuted and sent to prison for twenty-three years -- and in China 90% of those prosecuted are always found guilty (State-Sponsored Extortion 2011).

In China, the majority of foreign firms reported that they had to make payments to officials, such as bribing customs officers to allow their products into the country. This is a clearly illegal act and would come under the category of subornation, since those selling these goods have a legal right to do so and should not be forced to make such extra payments. It should also be considered extortion on the part of the government officials concerned since they are clearly denying legitimate companies their lawful right to do business unless they pay bribes. The Commodity Inspection Board, which began examining imports in 1987, often engages in this type of extortion against importers. Another clear case of extortion would be the government official who threatened that a company would not be allowed to do business in China unless he received a 3% kickback. According to the Hong Kong Independent Commission against Corruption, such bribes and gifts extorted from foreign companies amounted to 3-5% of total operating costs in China or $3-5 billion annually (Case 2-5). This type of corruption is not simply small gifts and favors to petty officials but rises to the level of organized crime and racketeering. An example of lubrication would be the foreign traders who have to pay off officials to facilitate sales in China, often through offering trips abroad with the pretense that these are inspection tours or designed to obtain technical advice and information. Banks that refuse to issue letters of credit unless their officials are invited on one of these overseas trips are also demanding bribes for lubrication purposes, as are officials who do not provide import and export permits unless their children receive sponsorships for education at foreign universities (Case 2-5). Of course, in all these instances the line between 'mere' lubrication vs. extortion and subornation of illegal acts is often a very thin one.


According to leading cultural theorists like Gert Hofstede and Fons Tompenaars, China could be described a particularistic society, other-directed, diffuse rather than specific in public and private life, traditionalist and authoritarian, and oriented toward the past rather than the present or the future. Like all Asian countries, it is collectivist instead of individualistic, where ascribed status, age and seniority are far more important than achieved status. Particularistic countries place more emphasis on relationships than rules, and these cultures believe that circumstances dictate how ideas and practices are applied. Therefore, ideas and practices cannot be applied the same everywhere (Workman 2008). Like all East Asians, Chinese strive to maintain face and avoid shame both in public and private. Face is a personal concept that embraces qualities such as a good name, good character, and being held in esteem by one's peers. This also extends to the family, school, company, and even the nation itself. Conversely, face can be saved by remaining calm and courteous; discussing errors or transgressions in private; speaking about problems without blaming anyone; using non-verbal communication to say "no"; and allowing the other person to get out of the situation with their pride intact. Use of titles and formal manners and proper displays of respect for seniors and those in authority are absolutely vital in a culture like this. China has a communitarianism is that places the community before the individual. Success is achieved in groups, decisions are referred to committees and groups jointly assume responsibilities (Workman 2008). Tradition and ascribed status are important in France, but it still remains a Western achievement-oriented culture, inner-directed, specific rather than diffuse, although it is also more particularistic in language and culture than the United States or the Netherlands. Loyalty to the family comes before other social relationships, even business, while nepotism is viewed positively, since it guarantees hiring people who can be trusted. This is crucial in a country where working with people one knows and trusts is of primary importance. China is a hierarchical society, where people are respected because of their age and position, and older people are viewed as wise and are granted respect.

Chinese prefer to work with people they know and trust and will spend a great deal of time on the getting-to-know-you part of relationship building, and generally indirect communicators.. Direct statements are made only to those with whom they have a long-standing personal relationship, and they prefer to do business in person. Like other Asian societies, they want to look someone in the eye when they are doing business, to ensure their honesty and sincerity. Modern, Western democratic societies are far less traditional, authoritarian and hierarchical cultures. In the West, the individual is more important than the group, and that may well be the most important difference of all, and every human being has the same rights. This was simply not the case in most times and places in history, and is still not true today in many parts of the world. In addition, the West is more inner-directed than other-directed compared to Asian societies like China, places more value on earned achievements rather than age, seniority and ascribed status. Confucian societies have high uncertainty avoidance maintain rigid codes of belief and behavior and are intolerant of unorthodox behavior and ideas. Their levels of power distance are also high compared to the U.S. And most Western nations, with highly unequal ideas about hierarchy, authority and status (Trompenaars and Hamden-Turner 2010). Being dependent on hierarchy means a system of unequal rights between power holders and non-power holders, and also that superiors are inaccessible, and that leaders are directive, management controls and delegates. Power is centralized and managers count on the obedience of their team members.


In economics, the U.S. free market and free trade model of capitalism has become highly tarnished and discredited due to the economic crisis over the past three years, in both the U.S. And the developing world. If the U.S. Congress and Federal Reserve had not intervened directly in the economy with trillions of dollars in bailouts and subsidies, the world really would be in a 1930s-style depression today. Indeed, it may still happen yet, given the very wobbly state of the European economy. So statist, mercantilist and Keynesian policies have all made a comeback in the past few years, and in fact these have always been more compatible with Chinese-Confucian culture than ideas about individualism, free markets and laissez faire capitalism. If social and economic policy is going to move in a more statist and authoritarian direction in the years ahead, then China's traditional culture will actually turn out to be an advantage rather than a hindrance to its growth and prospects as a superpower. Of course, one problem with this has always been that its culture, education system and political system also limit innovation, creativity and independent thought, which might actually weaken economic growth in the future, especially in high technology areas. Another limiting factor will be high levels of corruption and lack of transparency in government, banking and the legal system, that will discourage investment in China. Overall, though, the decline of the U.S. economy, particularly its manufacturing base over the last thirty years, is a very clear trend, as is the relocation of older industries to China and other Asian nations. In many respects, the U.S. has only itself to blame for following such free trade policies, especially because China is not playing by the… [END OF PREVIEW]

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China and Globalization Three Research.  (2012, January 27).  Retrieved June 26, 2019, from

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"China and Globalization Three Research."  January 27, 2012.  Accessed June 26, 2019.