Posts published in May 2014

Beijing’s Shot Across the Bow on Corruption: By Chris Priddy in The Wall St Journal, May 22, 2014 The writer is a Washington, D.C.-based attorney at Harris Moure law firm. China’s police last week accused GlaxoSmithKline’s GSK.LN +0.93% former head of China operations, Briton Mark Reilly, of orchestrating a significant bribery operation of illegal payments to Chinese doctors to boost sales. Last fall witnessed the high-profile trial, conviction and life sentence of Bo Xilai, former head of the Chongqing Communist Party, on bribery charges. Two cases aren’t precisely a trend, but they are a warning: Beijing may be starting to crack down on corruption. GSK says it will cooperate with the current investigation; Mr. Reilly hasn’t commented. In both the GSK and Bo matters, Beijing’s motivation isn’t especially clear. The most common view is that both cases are political. Under this theory, Bo Xilai was prosecuted to eliminate a political adversary to new President Xi Jinping while simultaneously demonstrating the Chinese government’s intolerance for flagrant corruption among the country’s wealthy and powerful elite. The GSK case shows that China will not tolerate corrupt activities by foreigners in sensitive industries, especially when such activities result in higher prices for Chinese consumers. Any future bribery cases, the thinking goes, must be viewed against the backdrop of a particular political agenda in Beijing. But don’t gainsay the alternative view: that Beijing is genuinely serious about rooting out corruption. Leaders in Beijing are aware that widespread graft undermines the legitimacy of Communist Party rule, and are looking for ways to combat it. Under this interpretation, the Bo and GSK cases are strategic in that they involve two different types of defendant—a political elite and a foreign entity—certain to cause widespread discussion and send a strong signal to others that no one is safe from prosecution. The real test will come in future cases, and the issue to watch is how close Beijing will allow anticorruption investigations to approach party leaders. Meanwhile, companies need to respond to these developments. First, companies should resist the temptation to assume a corruption crackdown is a bad thing. Efforts to require companies to follow China’s laws and regulations should be applauded by everyone doing business in China. Strict enforcement of anti-corruption laws would result in a level playing field, eliminating uncertainty about the costs and risks of competing in industries in which bribery and corruption are perceived norms. Similarly, it makes little sense to complain about Chinese authorities enforcing black-letter Chinese rules and regulations. Arguments that GSK or other foreign companies are victims of politically motivated selective enforcement sidestep the fact that all companies operating in China are required to comply with China’s laws. American and British companies also are required to obey their own countries’ laws—the U.S. Foreign Corrupt Practices Act and the U.K. Bribery Act—that prohibit corruption globally, including in China. But that’s not to say it won’t be a difficult period. Companies that may have benefitted commercially from either actively or passively condoning and engaging in corrupt activities must be capable of quickly transitioning to legally compliant businesses. An important lesson of the Bo and GSK cases is that penalties under China’s anti-corruption regime will be severe and swift. At the very least, foreign companies must review their operations and ensure appropriate compliance with Chinese regulations. All companies should carefully evaluate the means by which they ensure compliance with China’s laws and should factor such compliance efforts into corporate processes, strategies and resource allocations. The consequences of willful or blind non-compliance are too severe, ranging from corporate fines to prison sentences for company officials. A foreign company may try to justify regulatory violations under arguments that the Chinese laws are vague or unclear in their application to the company’s industry. Some foreign companies in China may think that because other companies in their industries engage in proscribed activities and have not faced legal repercussions, so they can too. Both arguments may once have been true. But as Beijing’s corruption crackdown intensifies, any commercial gains from corruption are now outweighed by the legal and business risks. Foreign companies cannot ignore Chinese laws and regulations by failing to fully understand the requirements of operating in a particular industry. Given its recent actions in the GSK matter, China appears to be issuing companies a clear directive that they bear responsibility for ascertaining, understanding and complying with applicable legal requirements. Ensuring that comprehensive compliance procedures have been implemented will likely be the new business norm in China—and this is a good development that can lead to predictability in Chinese transactions. China may issue new policy directives about legal compliance, but even

By globalpoliticsnews on May 23, 2014

Beijing’s Shot Across the Bow on Corruption: By Chris Priddy in The Wall St Journal, May 22, 2014 The writer is a Washington, D.C.-based attorney at Harris Moure law firm. China’s police last week accused GlaxoSmithKline’s GSK.LN +0.93% former head of China operations, Briton Mark Reilly, of orchestrating a significant bribery operation of illegal payments to Chinese doctors to boost sales. Last fall witnessed the high-profile trial, conviction and life sentence of Bo Xilai, former…

Shifting global epicentres: edit in daily times, May 23, 2014

By globalpoliticsnews on May 23, 2014

The framework of global engagement and the balance of power is seeing what might be called a ‘tectonic’ shift, succeeding what might once have been called the ‘Teutonic’ shift that shaped the post-colonial world we live in today. This is exemplified by the rise of Asian economic powers particularly China, which looks set to become the world’s leading power in the near future. This week China played host to the fourth summit of the Conference…

Xinjiang attack marks dramatic shift in militant tactics: experts : AFP report May 23, 2014

By globalpoliticsnews on May 23, 2014

BEIJING – The bombing of a civilian market in Xinjiang represents a shift in tactics by militants towards more spectacular attacks, analysts say, to invite a disproportionate response by China and so radicalise the Muslim Uighur homeland. At least 31 people were killed and more than 90 wounded when assailants threw explosives and ploughed two off-road vehicles through a crowd in the regional capital Urumqi on Thursday. The vast, resource-rich region which was rocked by…

Kidnapping of Chinese national: The News, MAY 23, 2014

By globalpoliticsnews on May 23, 2014

PESHAWAR: Secretary Home and Tribal Affairs Syed Akhtar Ali Shah on Thursday held responsible the police personnel manning a checkpost for not checking the Chinese national who was kidnapped in Dera Ismail Khan on May 19. Talking the reporters at the inauguration of Model Police Unit in Faqirabad Police Station, the secretary Home and Tribal Affairs said the police should have stopped the Chinese tourist and properly checked his document. He stopped short of saying…

Muzaffarabad to have rail link with Islamabad: The News, MAY 23, 2014

By globalpoliticsnews on May 23, 2014

ISLAMABAD: The federal government has decided to connect Islamabad with Muzaffarabad, capital of Azad Kashmir through rail link.Finance minister Senator Ishaq Dar stated this in a meeting with AJK Prime Minister Ch Abdul Majid here on Thursday, says a press release. He informed the chief executive of Azad Jammu and Kashmir that the project will cost Rs60 billion and the federal government has an equal priority and respects the sentiments for development projects of AJK.…

Tariff row: Government warns to cut AJK’s power supply

By globalpoliticsnews on May 22, 2014

By Zafar Bhutta in The Express Tribune, May 22nd, 2014. ISLAMABAD: Tensions between the Centre and the Azad Jammu and Kashmir (AJK) government over power tariff worsened on Wednesday as the former warned to cut off the latter’s electricity supply if the actual tariff was not paid. “We have informed the AJK government that it may face a power disconnection,” Ministry of Water and Power’s Additional Secretary In-charge Saifullah Chatha informed the National Assembly Standing…

First Chinese language centre opens in G-B

By globalpoliticsnews on May 22, 2014

By Shabbir Mir in The Express Tribune, May 22nd, 2014 GILGIT: The region’s first Chinese language centre started classes in Gilgit on Wednesday, with 40 students enrolled in the first batch. The Pakistan-China Friendship Language Centre is a joint initiative of the Chinese government and the Gilgit-Baltistan (G-B) education department. Located in Gilgit High School No 1, the centre will be managed by the G-B chapter of the Overseas Chinese Association. While inaugurating the centre…

Pakistanis in disputed Kashmir worry about rise of Indian nationalist: L A Times

By globalpoliticsnews on May 21, 2014

By Aoun Sahi & Shashank Bengali Pakistanis in disputed Gilgit-Baltistan are closely watching the results of India’s elections Cease-fire at Himalayan glacier in peril if Narendra Modi becomes India premier, Pakistani says Pakistanis in Himalayas worry that India’s election outcome will up-end their region’s status quo The rugged, snow-laced beauty of the Himalayan countryside masks a creeping sense of worry about political developments taking place far below these mountains. In neighboring India, Narendra Modi, a…

Enquiry launched: What led to the downfall of Hussainabad Bridge?

By globalpoliticsnews on May 20, 2014

The Express Tribune, May 18, 2014 GILGIT: A team of experts has begun investigating into what led to the collapse of an under-construction RCC bridge in Hunza Valley of Gilgit-Baltistan (G-B). Engineer Ali Muzaffar, Superintendent Engineer Basharat and Hunza Assistant Commissioner Asim Raza were part of the investigation team formed on the directives of G-B Chief Secretary Sikandar Sultan Raja. Due for completion back in 2008, Hussainabad Bridge was supposed to connect Shinaki area of…

Resentment of China Spreading in Myanmar: The NY Times, May 20, 2014

By globalpoliticsnews on May 20, 2014

By THOMAS FULLER in BANGKOK — A flare-up of resilient hostility toward China among its neighbors has infected central Myanmar, where a Chinese company operating a copper mine has local residents seething over what they call the operator’s arrogance and the project’s seemingly unbridled expansion plans. Villagers seized two Chinese employees of the mine on Sunday, and while the company’s demand that they be released was met late Monday, local residents said they remained embittered…

With spy charges, US draws a line that few others recognize: The NY Times, May 20, 2014

By globalpoliticsnews on May 20, 2014

By DAVID E. SANGER WASHINGTON — By indicting members of the People’s Liberation Army’s most famous cyberwarfare operation — called Unit 61398 but known among hackers as the “Comment Crew” — the Obama administration has turned to the criminal justice system to reinforce its argument that there is a major difference between spying for national security purposes, something the United States does daily, and the commercial, for-profit espionage carried out by China’s military. The Chinese…