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2008, Vol. 6, Issue 1
Doing Business in China – The Ethical Landscape
China is a complex and intriguing country that is becoming increasingly important in the global marketplace. Yet, as western companies begin operating in China, they find themselves facing a variety of difficult ethical issues. This issue of GoodBusiness presents the thoughts and analysis of a number of business people and scholars, all with considerable experience dealing with the ethical challenges of doing business in China.
Several authors discuss the difficulties and misunderstandings that stem from the cultural differences between the West and China, and how this dissimilarity can lead to problems for corporations. Other contributors share examples based on their experiences, which reflect the enormity of the ethical issues encountered there. A Chinese scholar highlights the moral dilemmas faced by the media in this Asian country, while an expert in Asian studies presents a sobering picture of the environmental degradation occurring in China and discusses how these problems portend badly for the future. This issue of the journal also contains several links to web resources that readers will find useful.
The articles and links provided here will give readers a comprehensive view of the ethical complexities of doing business in China, as well as practical, business-oriented advice on how to handle those challenges.
China: The Inevitable Giant? >>
Peter White, President of The Southern Institute for International Studies, delivered these remarks as the opening presentation at The Center for Ethics and Corporate Responsibility's summer 2007 seminar on Doing Business in China—The Ethical Landscape. In his remarks, Mr. White provides an eye-opening overview of the political, social, environmental and economic situation in China, which may foreshadow greater difficulties for China and its fast track development. The warning signs that Mr. White identifies are important for everyone doing business in China to understand and consider as business plans are developed and implemented. The remarks contained in this article are Mr. White's, and do not necessarily reflect the views of The Southern Institute for International Studies. Read article >>
Assessing and Managing Unconventional Risk in China >>
Tom Roy of Thomson-Roy Advisors discusses the risks that businesses face when entering and competing in China. He first describes the changing nature of the business environment in China. He then focuses on how cultural differences can affect employee loyalty and emphasizes how important it is for foreign companies entering China to have experienced managers that can handle these unique issues. Mr. Roy discusses the importance of setting ethical standards and adhering to them, in order not to be caught up in corrupt activities. He also reflects on how competition in China is evolving and how a business can suffer if it is not aware of these evolving trends. Finally, Mr. Roy provides a useful framework to analyze and manage the risk associated with doing business in China. Read article >>
U.S./China Differences and Their Impacts on Business Behaviors >>
Guanming Fang, a partner at the Atlanta, Georgia, office of the law firm of Womble, Carlyle, Sandridge & Rice, PLLC, was born and raised in China. As a result, she brings a unique perspective to the practice of law for companies operating in China. In her article on "U.S./China Differences and Their Impacts on Business Behavior," Ms. Fang discusses the differences that Western and Chinese companies face with regard to political systems, the role of government, the legal systems, and culture. She explores each of these areas and points out how not understanding the disparities could result in failed business ventures and relationships. Read article >>
Ethically Doing Business in China >>
Jack Ward, former Chairman and CEO of Russell Corporation, discusses the practical difficulties of doing business in China. These remarks were delivered at The Center for Ethics and Corporate Responsibility's 2007 Summer Seminar on Doing Business in China—The Ethical Landscape. Mr. Ward conveys the challenges of opening operations in China and dealing with environmental and safety concerns, wage compliance and counterfeit goods. He offers some suggestions on how to address these issues and establish a successful operation in China. Read article >>
Difficult and Slow Progress—a Comparison of Media Codes of Ethics in China >>
Professor Qingli Li was educated in China and currently teaches journalism at a university in China. In her article, "Difficult and Slow Progress—a Comparison of Media Codes of Ethics in China," she analyzes the evolution of the concept of journalistic ethics in China. The country is moving toward a more capitalistic system with a greater need for effective media. However, the progress in recognizing, accepting and encouraging journalistic ethics has been slow. The author provides reasons for hope that the media in China will be guided by more effective ethics in the future. Read article >>
The Great Leap Backwards: The Costs of China's Environmental Crisis >> 
In this article, reprinted with permission from the September/October 2007 issue of Foreign Affairs, Elizabeth Economy, a C.V. Starr Senior Fellow and Director of Asian Studies at the Council on Foreign Relations, discusses the astounding nature of the environmental problems occurring in China today. Although the Chinese government is making much of its efforts to address China's environmental challenges before the 2008 Olympics, Ms. Economy's observes that much of the world's enthusiasm around China's approach is misplaced. Anyone interested in environmental conditions in China and the world will learn much from this extensive analysis. Read article (PDF) >>
China: Guanxi and Corporate Security >>
Fred Burton and Scott Stewart of Stratfor discuss the implications of guanxi for Western businesses in China. Guanxi is a complex cultural system of personal relationships and moral obligations, which is seen in China as a natural way of doing business. They discuss how the Chinese culture is far more relational than Western culture, and this difference is especially pronounced in business culture. What many Chinese business people may regard as a natural, and even necessary, way of doing business, may seem to Western business people as corruption. Read article (PDF) >>
Conference Observations, Beijing, China, December 2007 >>
Stephen Young, executive director of The Caux Round Table, offers his observations from a conference held in Beijing on Business Values and Corporate Culture. He observes that at this gathering the starting point of the discussion was different from earlier discussions in which he had participated. In a prior workshop, the author observed little interest on the part of the Chinese in the topic of ethics. Rather, they seemed to be more interested in making profits. This conference was different, however, in that it was "authentically Chinese," as the Chinese asserted ownership of the ideas being discussed while framing questions of ethics in the context of their culture. Read article >>
Useful Additional Resources Available on the Web >>
These URLs are links to useful web resources that will further your knowledge of the ethical challenges in China.
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