Published by ChinaMNC · Qi

Anti-Corruption Drive Intensifies: What Foreign Founders Operating in China Should Know

China's anti-corruption campaign continues at high intensity, with new enforcement data and priorities that affect how foreign founders should think about compliance, procurement and local partnerships when registering or running a company in China.

A High-Pressure Campaign That Shows No Sign of Slowing

Foreign founders weighing company registration or expansion in China should note that the country's anti-corruption campaign remains one of the most active enforcement priorities in public administration. In a speech marking the 90th anniversary of the Long March, the top leadership stressed the need to persistently advance full and rigorous Party self-governance and to keep achieving self-purification, self-improvement, self-renovation and self-enhancement.

Corruption was described as an obstacle to the development of the Party and the country's undertakings, and anti-corruption work as a major struggle that cannot be lost. In January, at the fifth plenary session of the 20th Central Commission for Discipline Inspection, the leadership called for advancing the anti-corruption struggle with greater clarity and resolve.

Since the 18th Party Congress, the country has developed a path of anti-corruption with Chinese characteristics, described as being under the centralized and unified leadership of the Party Central Committee, addressing both symptoms and root causes, and promoting in an integrated way the three goals of deterrence, prevention and rejection of corruption. The stated intention is to keep to this path firmly.

Enforcement by the Numbers

For foreign founders, the scale of enforcement is a useful signal of how seriously compliance issues are treated. In the first three quarters of this year, disciplinary inspection and supervision organs nationwide filed 800,000 cases and took disciplinary action against 680,000 people, according to the source article.

These figures are not broken down by sector or by the involvement of enterprises, and they should not be read as a measure of risk to any particular company. They do, however, indicate the volume of enforcement activity that exists within the system.

Three Priorities Relevant to Business Operations

The article sets out three main directions of the campaign. Each has practical implications for companies that interact with public bodies, state-owned enterprises, village collectives or local officials.

1. Maintaining a Sustained High-Pressure Posture

The leadership warned that if corruption is allowed to spread, it will damage the economic development environment, induce various risks and hidden dangers, and shake the foundation of governance. The article states that corruption remains prone to occurring and frequently occurring, and that the high-pressure posture must not waver. The stated approach is that every act of corruption must be opposed, every act of greed must be punished, and no place must be left for corrupt individuals to hide.

The article also emphasizes addressing misconduct and corruption around ordinary people as a regular task, so that the public can feel the results. One example given is a village in Pingle County, Guangxi, where villagers noticed irregularities in the accounts of a collectively leased mountain land. Inspectors investigated, a village cadre who had misappropriated collective funds received Party discipline, and withheld rent was recovered.

Other areas named include management of rural collective assets, funds and resources, medical insurance fund management, and elderly care services. For foreign founders, this suggests that local-level dealings, including land, leases, benefits and public service contracts, are subject to scrutiny, and that informal arrangements with local officials carry real risk.

2. Sharper Detection and Investigation

The leadership called for understanding new trends and characteristics of corruption, innovating methods, and improving the timely discovery, accurate identification and effective handling of various corruption problems.

One route highlighted is investigating misconduct and corruption together. In Dianjiang County, Chongqing, a discipline commission, while verifying that an official had improperly organized a banquet for his son's wedding, noticed his close relationship with a businessperson. This ultimately led to the discovery of serious disciplinary and legal violations. A campaign against improper dining and drinking led the same commission to seriously investigate corruption behind the conduct problems of several Party members and officials.

The article notes that many cases show misconduct and corruption are two sides of the same coin, sharing the same roots. The stated approach is to connect conduct, discipline and anti-corruption work, punishing intertwined problems through joint investigation and eliminating common causes through joint treatment.

For foreign founders, the lesson is that gifts, hospitality, banquets and close personal relationships with officials can become entry points for broader investigations. Entertainment spending and personal connections deserve the same compliance attention as formal contracts.

3. Integrating Deterrence, Prevention and Culture

The article describes integrating the three goals of deterrence, prevention and rejection of corruption as both a basic policy and an important strategy of Party governance in the new era. The Party, it says, has explored ways to make the three work simultaneously, in the same direction and in combination, seeking more institutional results and better governance outcomes.

Culture is presented as a foundational element. At the Sansu Shrine in Meishan, Sichuan, the leadership said that governance concepts and thinking should be drawn from fine traditional Chinese culture. The article points to the building of a culture of integrity, promoting an environment that honors integrity, rejects corruption, values frugality and discourages extravagance, and eliminating the soil and conditions that breed corruption. The specific virtues cited include reading and honest work, filial piety and benevolence, refusing improper gain, and clean governance.

Practical Takeaways for Foreign Founders

• Treat local-level dealings as compliance-sensitive. Village collectives, public service contracts, medical insurance and elderly care are named as enforcement priorities.
• Control hospitality and gifts. Banquets and close ties with officials have featured in investigations, so set clear internal rules and document business entertainment.
• Expect scrutiny of relationships, not just transactions. The cases described began with conduct issues and widened into corruption investigations.
• Keep records that stand up to review. Procurement, leases and payments involving public or collective entities should be transparent and well documented.
• Build an integrity culture early. Codes of conduct, training and whistleblowing channels align with the cultural emphasis described in the article.

This summary is based on information published by the relevant Chinese government website and is general information, not legal or tax advice.