Chinese companies lag global peers in transparency matters, says new report

Chinese companies continue to lag their global peers in terms of transparency due to their weak or non-existent anti-corruption policies and procedures, a new report said on Monday.

The inability of the Chinese companies to adhere to international best practises has created an environment for corruption to thrive in their businesses and in the locations around the world in which they operate, said the report published by Transparency International, a global think-tank.

The report entitled Transparency in Corporate Reporting: assessing emerging market multinationals stressed on the need for large multinational firms from emerging markets to take more concerted efforts and steps to stop corruption.

Susan Côté-Freeman head of Transparency International’s business integrity programme told the Post however that there were a number of differences within the Chinese companies that they investigated. “We saw a divergence between the levels of transparency of SOEs in China and their subsidiaries which were listed overseas,” she said. “The subsidiaries often had better levels of disclosure than the parent company, presumably because they need to do so to meet the appropriate listing requirements.”

Côté-Freeman said four Chinese companies viz. ZTE, Lenovo, Li & Fung and Sinohydro performed better than their peers.

Though Chinese companies performed badly, the report found that most of the biggest emerging market companies are also culprits when it comes to transparency.