Published by ChinaMNC · Ye

Anti-Corruption Drive Intensifies: What Foreign Founders Operating in China Should Know

China's anti-corruption campaign continues with a focus on high-pressure enforcement, local-level abuses, and institutional reform. Here is what foreign founders should understand about the compliance environment for companies in China.

Anti-Corruption Enforcement Continues: A Compliance Primer for Foreign Founders

For foreign founders registering or operating a company in China, the country's anti-corruption campaign is not an abstract political topic. It shapes how officials interact with businesses, how local agencies handle complaints, and what standards of conduct are expected of company personnel. A recent official article published on the Henan provincial government portal, drawing on People's Daily reporting, summarizes the current direction of the campaign. The following is a business-oriented summary of the facts it contains.

High-Level Commitment to Sustained Enforcement

According to the source, at a gathering marking the 90th anniversary of the Long March, Xi Jinping stressed the need to persistently advance full and rigorous Party self-governance and to achieve self-purification, self-improvement, self-renewal, and self-enhancement.

The article describes corruption as an obstacle to national development and characterizes the anti-corruption effort as a struggle that cannot be lost. In January, at the fifth plenary session of the 20th Central Commission for Discipline Inspection, Xi called for pushing forward the anti-corruption struggle with greater clarity and resolve.

The source states that since the 18th Party Congress, a path with Chinese characteristics has been developed under the centralized, unified leadership of the Party Central Committee, combining root-cause treatment with coordinated efforts to make officials not dare, not be able, and not want to be corrupt. Xi said this path must be followed firmly.

As a measure of enforcement intensity, the article reports that in the first three quarters of this year, discipline inspection and supervision organs nationwide filed 800,000 cases and disciplined 680,000 people.

Why This Matters for Business Operations

The source quotes Xi warning that if corruption is allowed to spread, it will damage the economic development environment, trigger various risks and hidden dangers, and shake the foundation of Party governance. For foreign founders, this framing indicates that enforcement is presented as protecting the business environment, not merely as an internal Party matter.

Xi is quoted saying that corruption remains prone to occurring and frequent, and that a high-pressure posture must be maintained without wavering: every corrupt act must be opposed, every instance of graft punished, and evil thoroughly eliminated so that corrupt elements have nowhere to hide.

The article also notes that Party governance is not a short-term "blitzkrieg" but a long-term, sustained effort. Companies should therefore expect compliance expectations to be enduring rather than temporary.

Local-Level Enforcement and Complaints

The source emphasizes that the public's support is the greatest politics and that tackling misconduct and corruption around ordinary people should be a regular, important task, with results that people can see and feel.

It cites a case in Shuangqiao Village, Qiaoting Township, Pingle County, Guangxi. Villagers noticed irregularities in the accounts after the village leased collective mountain land. Discipline inspection cadres went to the village to verify the matter; a village cadre who had misappropriated collective funds received Party discipline punishment, and withheld rent was recovered. A villager remarked that everyone's hearts were united again.

The article says that in areas such as rural collective "three assets" management, medical insurance fund management, and elderly care services, "fly and ant" corruption — small-scale abuses at the grassroots — is being punished, and people feel that fairness and justice are close at hand.

For foreign founders, this signals that local-level misconduct is an enforcement priority. If a company's operations touch village collectives, land leases, healthcare funds, or elderly care, it may encounter closer scrutiny of related dealings.

New Methods and Penetrating Enforcement

The source states that anti-corruption work requires both firm resolve and effective methods. Xi is quoted saying that new trends and characteristics of corruption must be grasped, methods and approaches innovated, and various corruption problems discovered, identified, and governed in a timely and accurate manner.

One approach highlighted is the joint investigation and treatment of misconduct and corruption. In Dianjiang County, Chongqing, the county discipline inspection commission, while verifying a case involving an official who improperly held a wedding banquet for his son, found that the official had a close relationship with a businessman and ultimately uncovered serious disciplinary and legal violations. Through a campaign against improper eating and drinking, the commission seriously investigated corruption behind the conduct problems of multiple Party members and officials.

The article notes that many cases show misconduct and corruption are two sides of the same coin, sharing the same roots. Xi is quoted calling for linking conduct rectification, discipline enforcement, and anti-corruption, using joint investigation to punish intertwined problems and joint treatment to eliminate common causes.

The source adds that through practice, the Party's understanding of the patterns of anti-corruption work has deepened, its methods have become richer, and its approach more scientific.

The Three-Pronged Approach: Deterrence, Institutions, and Culture

The article identifies "persistently advancing the integrated approach of not daring, not being able, and not wanting to be corrupt" as an important aspect of Xi Jinping's thought on Party building. Xi is quoted saying this integrated approach is not only the basic policy of the anti-corruption struggle but also an important strategy for full and rigorous Party self-governance in the new era.

The source describes efforts to strengthen deterrence, close institutional loopholes, and raise awareness, with the three pursued simultaneously and in the same direction to achieve more institutional results and better governance outcomes.

On culture, the article recounts that in June 2022 Xi visited the Sansu Temple in Meishan, Sichuan, where a guide explained family traditions including "reading and proper work, filial piety and benevolence, not taking what is not rightfully one's own, and integrity in office." Xi said the Party should be good at drawing governance concepts and thinking from fine traditional Chinese culture. The article describes the building of a culture of integrity as a foundational project, creating a social environment that values integrity and rejects corruption and extravagance, and eliminating the soil and conditions for corruption.

Practical Takeaways for Foreign Founders

• Expect sustained scrutiny. The source presents the campaign as a long-term effort, not a short-term campaign, so compliance systems should be built for the long run.
• Watch local-level risks. Enforcement targets grassroots abuses in areas such as collective assets, medical insurance funds, and elderly care. Joint ventures and suppliers in these areas may face closer review.
• Treat hospitality and gifts carefully. The article highlights a case where improper banquets led to the discovery of deeper corruption. Companies should maintain clear policies on entertainment, gifts, and relationships with officials and business partners.
• Understand that misconduct and corruption are linked. The source stresses joint investigation of conduct and corruption, meaning minor improprieties can trigger broader scrutiny.
• Build a culture of integrity. The article emphasizes cultural foundations alongside rules and deterrence. Training and internal codes of conduct align with the direction described.

Conclusion

The source article conveys a consistent message: anti-corruption enforcement is intended to be sustained, methodologically sophisticated, and attentive to local-level abuses that affect ordinary people and the business environment. Foreign founders should treat this as part of the operating context in China and design compliance programs accordingly.

This summary is based on information published by the relevant Chinese government website and is general information, not legal or tax advice.

Foreign founders who need help registering and operating a company in China can contact ChinaMNC on WhatsApp or WeChat at +86 153 1898 8535.