Tag Archives: MNCs

Chinese SOEs Move to Enforce Anti-corruption Regulation Globally

In a news report published on January 3, the Financial Times raised fears about the extension of President Xi Jinping’s anti-corruption campaign to China’s state-owned MNCs operating abroad. Newer and much tougher anti-corruption measures will target commercial bribery, through the construction of stronger compliance systems within Chinese multinational corporations.

A group of state-owned MNCs including China Mobile, China Merchants Bank, China Railway, China National Petroleum Corporation, and Dongfang Electric has been selected by SASAC to implement the new compliance systems.

The FT article referenced “new regulations which went into effect on January 1”. From the article, however, it is not clear what these “new regulations” are, or which new compliance systems are being  created. This post sheds light on the matter, observing how the “new regulations” have created new classes of risks, which go well beyond commercial bribery.

These risks have been created by:

The Law Against Unfair Competition was amended on November 4, 2017, for the first time since 1993. The amendments went into effect on January 1. Most available commentaries have focussed on changes in provisions on commercial bribery, overlooking several risks. Most of these risks have emerged thanks to the creation of a social credit system.

From 1993 to January 1, 2018 several of the mechanisms mentioned in the first articles of the Law Against Unfair Competition were dead letter. In the absence of big data technology, and an adequate enforcement mechanism ‘fairness, honesty, credibility’ and the respect of ‘business ethics’ (art. 2) by Western and Chinese enterprises depended entirely on enterprises, and on their fidelity to their own ethical codes.

Today, ‘fairness, honesty, credibility’ and ‘business ethics’ can be quantified and measured. How these moral qualities are defined, quantified, and measured depends in part on social credit rules and indicators applicable to enterprises, and to specific industry sectors. In part, it depends on how amendments to the Law Against Unfair Competition will tie in with social credit mechanisms.

In the meantime, the amendments have:

  1. significantly broadened scope of anti-competitive practices
  2. introduced enterprises’ liability for perceived or actual violations of the rights and interests of Chinese and foreign consumers
  3. bestowed stronger powers on the central government
  4. attributed a stronger role to industry organizations
  5. provided a new and more comprehensive definition of commercial bribery, and introduced corporate liability for commercial bribery by employees
  6. introduced a more comprehensive definition of false advertising, which includes all forms of online advertising. Prohibited certain well-known online advertising practices, and SEO tactics
  7. introduced social credit as a mechanism to further punish unfair competition

Each one of these points is summarized and briefly commented upon below.

The regulatory document on compliance systems in SOEs touches upon such matters as the creation of discipline inspection organs and Party groups in Chinese multinational corporations in Europe, in the United States, in Africa, Latin America, and Australia. This document should be welcomed, because it brings corporate governance of China’s SOEs much closer to international CSR and anti-corruption standards.

As I have observed elsewhere, a core feature of corporate governance and CSR in China through big data is the central role played by Party organizations and by Party regulation…(1,259 words)

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[Document Summary] Opinions on Strenghtening Central Enterprises Overseas Corruption’s Risk Prevention and Control

This post provides a summary of the “Opinions on Strengthening Central Enterprises Overseas Corruption Risk Prevention and Control”, published by official Chinese sources. This document was issued in late December 2017, and its full text is not available yet.

This circumstance is entirely normal,  given how some of the provisions in the full-text version of this document may relate to the security of state-owned assets of the PRC.

The full-text of this document may or may not remain unpublished. Readers should be aware that Party documents which are not published in their entirety, and through a medium accessible to the public, may be covered by state secret. Those who disseminate them, or claim to have read them in their entirety, or to have attended closed-doors events discussing them, etc. expose themselves and others to risks of various kinds, regardless of the truthfulness of their claims. 

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Directory of Chinese State-Owned Multinational Corporations

 

Directory of Chinese State-Owned MNCs

The following directory lists 131 Chinese State-Owned Multinational Corporations managed by SASAC. It is annotated with information about mergers, and updated to  December 2017. All links to MNCs websites have been checked and updated.

Not all the MNCs included in the list below have an English version of their webpage. Information provided on the English version of an enterprise’s webpage may not necessarily correspond to information available on the Chinese language version of the webpage.

  1. Air China  – 中国航空集团公司
  2. Aluminium Corporation of China  – 中国铝业公司
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State Administration of Work Safety Notice on Further Strengthening Production Safety in Central Enterprises

国家安全监管总局  国务院国资委

关于进一步加强中央企业安全生产工作的通知

安监总政法〔2017〕131号

各省、自治区、直辖市及新疆生产建设兵团安全生产监督管理局、国资委,各省级煤矿安全监察局,各中央企业:

为全面学习贯彻习近平新时代中国特色社会主义思想,认真落实《中共中央 国务院关于推进安全生产领域改革发展的意见》《中共中央 国务院关于深化国有企业改革的指导意见》精神,进一步加强中央企业安全生产工作,确保在深化国企国资改革进程中,中央企业安全生产工作不放松,切实保护人民群众的生命和财产安全,现就有关事项通知如下:

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State Council General Office Guiding Opinion on Further Improving the Governance Structure of State-Owned Enterprises

State Council General Office

Guiding Opinion on Further Improving the Governance Structure of State-Owned Enterprises

Guobanfa 2017no. 36

To all provinces, autonomous regions and municipalities directly controlled by the central government, all State Council ministries, and all directly controlled institutions:

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State Council Opinions on Strengthening and Improving the Supervision of Enterprise State Assets and Preventing Their Loss

国务院办公厅关于加强和改进企业国有资产监督防止国有资产流失的意见

国办发〔2015〕79号

各省、自治区、直辖市人民政府,国务院各部委、各直属机构:
  我国企业国有资产是全体人民的共同财富,保障国有资产安全、防止国有资产流失,是全面建成小康社会、实现全体人民共同富裕的必然要求。改革开放以来,我国国有经济不断发展壮大,国有企业市场活力普遍增强、效率显著提高,企业国有资产监管工作取得积极进展和明显成效。但与此同时,一些国有企业逐渐暴露出管理不规范、内部人控制严重、企业领导人员权力缺乏制约、腐败案件多有发生等问题,企业国有资产监督工作中多头监督、重复监督和监督不到位的现象也日益突出。为贯彻落实中央关于深化国有企业改革的有关部署,切实加强和改进企业国有资产监督、防止国有资产流失,经国务院同意,现提出以下意见。

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Regulations on the Professional Integrity of Leaders of State-Owned Enterprises

国有企业领导人员廉洁从业若干规定

第一章 总 则

  第一条 为规范国有企业领导人员廉洁从业行为,加强国有企业反腐倡廉建设,维护国家和出资人利益,促进国有企业科学发展,依据国家有关法律法规和党内法规,制定本规定。

  第二条 本规定适用于国有独资企业、国有控股企业(含国有独资金融企业和国有控股金融企业)及其分支机构的领导班子成员。

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MOFCOM Basic Guidelines on Establishing a Modern Enterprise System in Large and Medium SOEs, and Strengthening Their Management

国务院办公厅关于转发国家经贸委

国有大中型企业建立现代企业制度和

加强管理基本规范(试行)的通知

国办发〔2000〕64号   

各省、自治区、直辖市人民政府,国务院各部委、各直属机构:

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Central Organization Department Notice on Matters Related to Deepening the Establishment of Party Organizations and Leadership Relations During SOEs Reform

中共中央组织部关于在深化国有企业改革中党组织设置和领导关系等有关问题的通知

(1998年7月7日)

 党的十五大以来,各地国有企业改革的步伐加快。在建立现代企业制度,实行鼓励兼并、规范破产、下岗分流、减员增效和再就业工作中,企业党组织发挥政治核心作用,推动和促进了企业的改革和发展。但也出现了一些新问题:有些企业实施资产重组时,党组织的设置、调整跟不上;有的企业改制后,党组织的领导关系不明确;有的企业党组织对下岗职工党员的教育管理工作薄弱,等等。这些问题亟待解决。为了在深化国有企业改革中加强和改进企业党的建设工作,现就企业党组织设置和领导关系等有关问题通知如下:

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Opinion on Strengthening the Construction of the Leadership Group in State-Owned Enterprises

中共中央组织部、国家经贸委、人事部印发

《关于加强国有企业领导班子建设的意见》的通知

经中央、国务院领导同志同意,现将《关于加强国有企业领导班子建设的意见》印发给你们,请结合本地区、本部门的实际情况,认真贯彻执行,并将执行中的有关情况和问题及时告诉我们。

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