Be Aware: Fraud Risks

Abstract

China is constantly plagued by fraud scandals. Anyone, whether only doing business with Chinese companies, managing a subsidiary, seeking investment opportunities or conducting merger and acquisition possibilities needs to be aware of China’s high fraud risks. The strong focus on family well-being, the urge to gain status through accumulation of wealth quickly (→ Social Concepts: ), weak controls and a generally relaxed attitude to fraud seem to drive such actions. Not surprisingly, Chinese pay great attention to building trust in business relationships and checking the partner’s credibility thoroughly.