Anyone doing business in China over a significant period will have encountered or heard of corruption in one form or another. The traditional Chinese definition of ‘corruption’ may be different from what is understood according to Western standards. For example, the giving and receiving of expensive gifts was accepted as a friendly gesture in the past. Down through the dynasties in China’s 5,000-year history, individuals could ‘buy’ official positions from their bosses; the right to collect taxes could be bought and sold; and criminal punishments could sometimes be converted into monetary equivalents. These practices were deeply rooted and permeated every level of government at various times and places, even if officially condemned.

All of this changed – in theory at least - with the establishment of modern China in the mid-20th century, when a new code of rectitude was introduced. However according to recent international standards China now ranks as one of the world’s more corrupt countries. In recent years the drive to separate government from business has brought about some improvement, albeit still far from satisfactory.

It is likely that corruption will remain a fact of business life in China in the foreseeable future.

Sometimes there is felt to be a fine line between guanxi (relationships) and corruption. Some Chinese would even question whether getting to know the judge or other powerful people involved in the legal system in order to improve one’s likelihood of success in court – and investing considerable time, not to mention money, in the process – is in fact a form of corruption. ‘Conflict of interest’ is still a new concept to many Chinese officials and business people.

In general, higher levels of government department are less corrupt than lower levels; and some localities are less corrupt than others. A useful rule is to seek assistance from the locality where you have a good relationship. Alternatively, go to a higher level authority - particularly when the other party involved is a big local company, as this often means they will have strong backing from the local government.

Remember that in China the courts are not independent of government: local courts are greatly influenced by their respective local governments and have their own internal Party structure. Local governments in turn depend on local companies for employment and taxation income, both increasingly important as the central government devolves more and more budgetary responsibility to lower levels.

As for the attitude of foreign businesses in China, you should guard against the temptation of adopting a ‘when in Rome. . .’ mindset. Penalties for corruption in China can be severe, not to say extreme, and they tend to be applied more vigorously to a foreign business person’s Chinese partner than to foreigners themselves.

The best advice is to treat corruption as most companies do elsewhere in the world and avoid it by resisting corrupt demands. You should bear in mind that UK law also expressly prohibits British businesses from paying bribes and entering into corrupt acts, while China has signed up to the Anti-Bribery Convention.