While providing meals or paying for the travel and accommodation costs seems like a normal affair to entertain one’s business partners, in China its not the same. Many foreign business operators think twice before offering any gifts concerning travel or entertainment in China because it is against the China law.
Corruption cases are on the rise in China. The Chinese authorities have investigated a lot of corruption cases and have come to a conclusion that the corruption cases which arises from involvement with foreign business firms and through international trade is strangely quite high. For the purpose of enlightening and making the people aware of this, the CPC Central Committee broadcasted their 2008-2012 Work Plans for Establishing and Improving the System of Corruption Punishment and Prevention on June 22, 2008. This focused on the investigation of such bribery cases which are concerned with mainly foreign business companies, etc that operate in the PRC.
According to Article 389 of the PRC Criminal Law, it is a crime for any individual in China to give money or property with the intention of getting an undue advantage. This money or property is usually given to a state functionary as a bribe.
Hence, the payment of traveling expenses or even the reimbursement of the same and providing meals is categorized under the broader concept of property interest. Property interest is anything that can be quantified with a monetary value. That is why the business operators, businessmen and their counterparts are careful not to violate any part of this law which can result in criminal liability. Even if these benefits like provision of meals or reimbursement of expenses are of very low value, it is a crime if the provider of these had an intention of gaining an undue advantage.
Not only that, the business operators or businessmen in China should also not engage in commercial bribery, which means giving property or money to another individual or a business unit for the purpose of purchase and sale of goods.
The penalty for such commercial bribery is quite heavy, ranging from anything from RMB 10,000 to RMB 200,000 f the individual is found to be guilty.
Even the civil servants are encompassed under this rule and they are prohibited by the China law to obtain any personal gains or engaging in any activities for the purpose of profit by using their post. If found guilty, the penalty could be simply a warning or dismissal and sometimes it can be demotion. During the time period in which the punishment is meted out they would, by default, be ineligible for any increment in wage, promotion or other work related rewards.
The main purpose behind establishment of such law in china is to eradicate corruption and bribery as much as possible and also to promote fair competition.