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Globalization: China's Corruption Solution

| posted by Fast Company staff

I've been reading with fascination over the last few weeks as story after story appears about corruption involving Chinese food, drugs, and other consumer products. We've seen tainted seasoning, poisoned toothpaste, and nasty pet food.

It's been clear throughout that, questions of moral relativism notwithstanding, Chinese government and business officials weren't taking the problems too seriously. Relax, they said: The stuff may be poisonous, but it's not that poisonous.

Well, today, the Supreme People's Court went to the other extreme condemning a former drug and food safety chief to death for taking $650,000 in bribes from drug companies. Staggeringly, the official, Zheng Xiaoyu, was executed the same day.

Talk about swift justice. Whoa. Can you imagine Food and Drug Administration Andrew von Eschenbach being hung for a comparable offense? (For that matter, can you imagine a comparable offense occurring in the U.S.?)

Clearly, China understands on some level that its reputation, and its trade balance, is on the line: "Zheng Xiaoyu's grave irresponsibility in pharmaceutical safety inspection and failure to conscientiously carry out his duties seriously damaged the interests of the state and people," the Chinese news agency Xinhua reported the high court as stating.

It's a shocking, outrageously extreme remedy. But in a land so riven by instances of obvious hyper-greed, it also may be the only one with a chance of working.

Comments | 15

July 10, 2007 at 6:33pm

Corey Donovan

That is a startling response, but I doubt it will be effective. My guess is that the low-level government officials turn the other way or accept bribes while factories in their provinces operate in the most profitable (if not the safest) manner.

Want to save money on paint on some kid's trains on the other side of the planet?... why not use cheaper lead-based paint?

My company trades in used Cisco hardware and this decade's largest issue in that market has been dealing with counterfeit routers and switches that have flooded the market from factories in China. While the industry has banded together to identify this fake equipment, it would be much easier if China would tighten up enforcement with factories at a regional level.

July 10, 2007 at 8:46pm

Jeff Delkin

Execution is a relatively common form of punishment here in China for extreme criminal activity.

Does the punishment fit the crime? That's quite debatable. Is it an effective deterrant? Questionable.

What this case does point to is the need for continuous on-site monitoring at the manufacturing level.

We manufacture in China and elsewhere. We are a small company of housewares made from bamboo. We have our own people in each of our manufacturing groups monitoring materials, and construction. Ours is a very different business, but suffice to say, there are many opportunities to make poor decisions in any manufacturing process. Only by taking responsibility for the entire process, can we ensure we have a safe, quality product with no compromises.

Watchdogs and third party monitoring may come, but anyone doing business in China (and elsewhere) needs to take responsibility for their actions, business relationships, and product creation. Frankly, we couldn't do what we do without being on the ground here.

Don't wait for China to lead this.

July 10, 2007 at 11:31pm

Adam Schokora

Interesting piece... Although swift and a touch draconian, I am fairly certain sentencing and execution weren't "same day."

I believe Mr. Zheng was sentenced at least a few weeks ago...I could be wrong though...

AjS

July 11, 2007 at 9:17am

tcs

not that it makes much of a difference: you mention US $ 650 000 in bribes, CNN 6.5 million. which is true?

July 11, 2007 at 9:21am

tcs

in addition: you mention US $ 650 000 in bribes, CNN speaks of 6.5 million. which is true?

July 11, 2007 at 9:52am

johndoeagain

nah, dont think it'll be effective. i mean, to the chinese, corruption isnt even WRONG, it's a way of doing business.

sure, now that lives are in danger, it looks serious, but when it's your everyday corruption to win a government contract? who's going to execute/be executed? Jintao vs Jintao?

dont be naive..

July 11, 2007 at 10:11am

Perry de Havilland

Zheng Xiaoyu was not really executed for corruption (a large proportion of the ruling class would be executed if that was true). No, he was executed for allowing a scandal to *publicly* embarrass China in front of the rest of the world.

In China the real crime that can get you in front of a firing squad is to allow the country's very dirty laundry to be seen in public.

July 11, 2007 at 4:22pm

Paul Svec

Keith,
You're kidding, right? "(For that matter, can you imagine a comparable offense occurring in the U.S.?)".
Pharmaceutical companies in the Western World bribing officials? Perish the thought! Have you heard of K Street? $650K is probably the expense budget for ONE lobbyist law firm in Washington.
Summary execution for bribery might not have much effect in China, but it might here!

July 11, 2007 at 4:38pm

Rob

Are you sure that he was sentenced and executed in the same day, aka, today!? I just returned from a month long trip through China and I remember reading in the newspaper there that they had sentenced the chief of the food and drug administration to death for corruption. I read that at least a month ago though! Perhaps they just keep a lid on that sort of thing to make it look like they are operating at a faster pace? Very interesting!

July 11, 2007 at 6:02pm

Charlie

He was not executed the same day. He appealed his sentence after the original trial; it was denied; and some time later he was executed. The newspaper reported that it happened yesterday 07.11.2007.

Also, there was a recent article describing changes in Chinese law that will reduce the application of death sentences to many fewer types of cases. So this particular event is perhaps a remnant of the prior way of doing things as they transition. A colleague of the deceased has also been sentenced to death, but given 2 years commutation. There is no telling how the delay may be impacted by the recent regulatory change.

C.

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