In 2003, nearly 73% of Chinese firms were expected to pay bribes to public officials in order to “get things done”. With international investment in China exceeding $227 billion in 2009, this combination of record foreign investment and rampant local corruption continues to solidify China’s reputation as a lucrative yet very dangerous place to do business. 

Annually, the Chinese government is estimated to lose upwards of $86 billion USD due to the siphoning off of public and private money by individuals and the cost of fixing substandard projects and products approved by bribed inspectors and officials.  In order to understand why bribery is so prevalent in China, it is necessary to know the environment in which it takes place.

For thousands of years, the Chinese public has secured information, materials, discounts, careers, etc. via an open exchange of monetary gifts and other services.  In the modern era, bribery allowed private businesses to gain contracts and prosper in the post-Mao 1970’s and 80’s. However, now that Chinese business is becoming increasingly privatized, bribery is proving extremely damaging to the economy.  The continued practice of bribery despite the heavy cost to the nation can further be explained by the lack of consequences faced by those convicted of the crime.

Though over 1200 bribery and corruption laws now exist on Chinese law books, most are vague and riddled with loopholes; few are ever enforced.  When enforced, courts tend to judge each case according to the social and political status of the individual being accused and not by any legal precedent. If convicted, the offender faces just a three-percent chance of seeing any jail time. 

This lack of consequence, the absence of any credible system for background checks and the rich tradition of bribery in the Chinese culture combine to create a climate in which the reputation of a foreign enterprise can be tarnished in the blink of an eye.

This ever-present danger to those importing from China is the main concern of the quality control industry in Asia.  As a leading member of this industry, AsiaInspection recognizes that its success and the success of its clients rely heavily on the integrity of its employees, who abide by the following principle against bribery:

IMAGE CAPTION: “No AI employee is allowed to accept any gift or favor, for personal or family gain, from any of the company's customers or suppliers. Failure to comply with this principle will result in immediate dismissal of the employee.”

Through a system of warnings, financial incentives, and checks and balances with auditor oversight, Asia Inspection has proactively gone beyond this principle in an effort to eliminate bribery.  Inspectors can make up to an additional 40% of their salary through commissions earned for each proper inspection.  

Upon arrival at the factory, the inspector is required to show a disclaimer and have it signed by the factory manager.  This disclaimer stipulates that the inspector is not allowed to request or receive any meal, gifts, or allowances from the factory.  If there is any misconduct by the inspector, the factory can call the AsiaInspection Head Office, which will promptly investigate the case and replace the inspector if necessary.

In the event of termination, a photo of the guilty inspector is posted to an email detailing their misconduct.  This email is sent to every AsiaInspection employee as a warning to all.  This practice is a product of AsiaInspection’s understanding that, in the Chinese Culture, such a public humiliation is often a far greater deterrent than the termination itself.  Leveraging this traditional Chinese “shame system” has allowed AI to control bribery levels far more effectively than others in the quality control industry.
 
In addition to the disgrace of public exposure and the long-term financial hardship termination brings to the employee, any pending payments to the fired inspector for completed inspections are cancelled, often resulting in a loss to them of thousands of Yuan.

Conversely, an inspector who displays integrity by refusing and reporting bribery with proof (photos, audio, etc.) is pictured and recognized in a company-wide email full of praise and given a cash reward for their honesty.  All employees are encouraged to follow this example.

An additional precaution against bribery is that our inspectors cannot give authorization for shipment.  This decision belongs to the client; based on their response to the precise report prepared by the inspector.  Each his report provides a photo and result for every test requested on the booking form.