Business Corruption

It should come as no surprise there are sometimes ethical and corruption issues in Chinese business, with lots of interesting stories to go around. Everyone seems to know companies with not one or two, but three or four sets of books. Or with the general manager moonlighting by working for the competition. Or lots of other run-of-the-mill fraud issues, some no worse than in other countries, but some endemic for now. You really have to investigate and, in Reagan's words, 'trust but verify,' which means frequent audits and very tight financial controls. As someone said recently, if you can't trust your CFO like your mother, hire your mother. This problem will of course wane with time, but for now, caution is warranted.