Paul Lachine

China’s Corporate Crackdown

In recent months, the Chinese government has leveled a series of allegations of corporate misconduct – ranging from food-product contamination to price rigging and bribery – against multinational firms. Whatever spurred this regulatory activism, the implication is clear: the age of irresponsible business in China has ended.

BEIJING – Multinational corporations are under siege in China. In recent months, the government has leveled a series of allegations of corporate misconduct – ranging from food-product contamination to price rigging, bribery, and environmental shortfalls – against foreign-owned companies, with important implications for the development of China’s business environment.

Does the government’s recent behavior reflect a commitment to strengthening business ethics, marking the start of a long-overdue regulatory catch-up process? Or is it intended merely to create a convenient populist distraction from China’s current economic woes? Or are these revelations of often long-known corporate misdemeanors part of a complex power play involving competing Chinese interests?

The answer probably is a combination of these factors. But, whatever the motivation, the message is clear: the age of irresponsible business in China is over.

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