Corruption or just traditional guanxi?

PUBLISHED : Friday, 06 May, 1994, 12:00am
UPDATED : Friday, 06 May, 1994, 12:00am

IT was inevitable that corruption should have been a major theme of the conference on business ethics held earlier this week in Hong Kong. Ethics, after all, are the chains that hold us back from the slippery slope of law breaking.

The emphasis on the darker side of unethical practices might raise concern among outsiders that a rising tide of graft is threatening the territory. That concern will not have been calmed by the recent figures on the growing number of reports received by the Independent Commission Against Corruption.

A 44 per cent increase in 1993, which included a 53 per cent jump in the number of complaints in the private sector, certainly looks as if Hong Kong is going to hell in a handcart.

But this is not the view that emerges from the latest survey on corruption in the region carried out by the Political and Economic Risk Consultancy (PERC).

This showed that far from being the Sodom and Gomorrah of Asia, Hong Kong is regarded by businessmen as second only to Singapore in its lack of corruption. Better yet, the rating for the latest survey - carried out in March, was more favourable than the results of the previous poll, in October last year.

Even more encouragingly, the survey showed that every other country in the region was also showing an improving trend - although six months is hardly a sufficient period on which to base firm judgments.

Every other country but one that is. The exception was China. The previous bad boy, Indonesia, now takes second place, with the Philippines running third.

For Hong Kong, of course, the rise in China's rating - or fall depending on which way you view it - is particularly disturbing given the great dependence of the territory's businesses on China.

Unofficial estimates quoted by the PERC suggest that up to 70 per cent of all Hong Kong enterprises doing business with Guangdong province have owned up to acquiescing in corruption - either through the giving of gifts, entertainment or other kick-backs.

Which brings us back to ethics. What is the difference between corruption, and traditional guanxi? This developing of special relationships with individuals or enterprises is a way of life in China, and one which has been recognised by Hong Kong and other Asian businessmen.

One participant at the conference readily admitted to bringing down state officials and introducing them over dinners (good dinners) to other businessmen.

In return, he was seen as a sincere friend of the province when he moved north in search of business for his company, and his helpful attitude in Hong Kong was reciprocated.

Unethical? Corrupt? Or just solid bridge building which takes place in every country in the world between businessmen. Some buy dinner. Others play golf, and pick up the green fees.

The same man was adamant that in spite of the obvious problems in China, neither he, nor any of his executives had been pressured to sink to the corrupt levels that appear to be regarded as inevitable by some.

But then his company has a strong code of conduct, which could well deflect the demands before they were made.