USCBC 2017 Compliance Report

Managing Anti-bribery Compliance in China

Despite the launch of China’s anti-corruption campaign in 2012 and a subsequent modest improvement in the compliance environment, US-China Business Council (USCBC) member companies continue to face local business practices and perspectives that make adherence to global compliance programs essential. USCBC’s 2013 Compliance Report examined many of the challenges companies faced before the campaign. Today, as companies work to ensure compliance with Chinese and international laws, they cite familiar challenges: adapting global policies to regional issues; managing stricter expense approvals and gift-giving thresholds; and building comprehensive compliance training programs. New challenges have also emerged: tracking new Chinese anti-bribery laws and regulations; managing communication tools outside of corporate email servers; and operating in a more aggressive enforcement environment. Although many of these challenges are thorny, companies have identified some best practices for maximizing success.  
USCBC interviewed more than 30 executives at member companies across a range of industries this year to better understand the compliance environment and companies’ best practices in the fifth year of China’s anti-corruption campaign. Compliance managers in China, global compliance executives, in-house lawyers, outside counsel, and representatives from government affairs and business development provided input. These respondents represented companies from a range of industries including manufacturing, healthcare, legal services, retail, chemical, and energy. 

Executive Summary


  • Although companies surveyed in the US-China Business Council (USCBC) 2013 Compliance Report said China’s anti-corruption campaign was unlikely to have a significant impact on operations, US companies now note that the campaign has improved the business environment in China. Officials are less likely to request special treatment or favors, and statowned enterprises (SOEs) are increasingly aware of the importance of compliance. On the negative side, companies note that the campaign has slowed bureaucratic decision making and made officials overly cautious in engaging with the private sector.

  • US Foreign Corrupt Practices Act (FCPA) compliance remains an essential priority for companies doing business in China. The US Securities and Exchange Commission (SEC) and Department of Justice (DOJ) have significantly increased enforcement in China over the past several years. Compliance with China’s domestic anti-bribery and anti-corruption policies also has become increasingly important as enforcement attitudes change and new laws are released.

  • Most companies have a global compliance policy with country-specific rules for China, supervised by dedicated local compliance teams that adapt policies to the China market. Companies have also increased hiring for these teams since 2013 to reflect business growth and local enforcement efforts. Management structures used by companies vary, but respondents said maintaining supervision of compliance teams through an executive in the Asia-Pacific region or through the corporate offices is useful to maintain a degree of independence from local leadership.

  • Nearly all companies use mandatory thresholds on meal and entertainment expenses. The average spending threshold for gifts was RMB 365 ($53), and the threshold for meals RMB 414 ($60), about the same as in USCBC’s 2013 Compliance Report. Companies restrict gifts to centrally purchased, low-cost items that bear the company logo. No companies reported using gift cards or other cash equivalents, and many have stopped the custom of giving mooncakes during China’s Mid-Autumn Festival.

  • Frequent training—along with support from top-level management—is critical for instilling a culture of compliance. Companies report a range of best practices for training including adjusting frequency based on risk assessments, combining online and interactive training, in-person education, using real-word examples, and localizing content to address China-specific issues.

  • Sales and business development teams are the leading source of compliance-related risk, according to companies. Government affairs teams are the second-highest risk.

  • New technology and software systems offer companies new methods to monitor and approve business expenses, as well as new channels to communicate with employees. Less than 10 percent of companies reported using software tools to log and approve expenses in 2013; by 2017, more than half reported using some form of online approval or tracking.

Read the full report here.