SvD: I have taken business contacts on free trips

"I have sent business contacts at free trips"

He has worked in China since 1997, e.g. as Vice President at Ericsson China and senior management position at Nokia but also as club owner. Many times have David Almström have closed encounter with the extensive corruption in the country. He himself have also done things with  business acquaintances that might be considered as bribery in Sweden.

This article was posted in Svenska Dagbladet, SvD

 - China is still extremely corrupt. I have been directly asked several times to give and get bribes. It's a kafkaesque system where all takes a lot of time, says David Almström

He has been in direct touch with bribery both within the iT and telecoms as well as in the restaurant business. David Almström's short time as part-owner in a nightclub ended up in a total fiasco, due to the extensive corruption. 

 - It was a lot of those things. I never got to see the daily business, only part-owner, but I did see any money there as well. I tried to recover what I invested but that was impossible.

Today, David Almström lives in Sweden but still owns a cafe in Beijing and works towards China as head of Scandinavia for the software development company, Symbio. And during his 15 years in China, he frequently was subject to bribery and got many requests from customers. 

 - One example was a fairly small deal of $50-60,000 whereby I met the CEO of the customer. He immediately declared he expected a new computer to sign the deal. We said no and also did not get the deal, says David Almström

And it is custom for both local and multinational companies use bribes in their daily business, according to David Almström. However, the Chinese government have increased their efforts to control the bribes during the last years. And when bribes get revealed, it may end quite badly for the parties. One of the top manager at China Mobile was prosecuted last year for accepting briberies from many telecom companies - Ericsson was one of them [NB: I actually did not mention any companies that was involved in the bribery]. Punishment: Death Penalty with a reprieve (normally not carried out).

 - It a fairly tragic situation. I know him for a long time and he had a reputation of being one of the more honorable in the industry, someone who do not accept bribes. But as it turns out, 15 years ago he accepted a bribe. And in China, almost every one at that level has done something not acceptable.

Though David Almström explains he himself has avoid the bribes, he has been in the gray zone. Traditionally, it's been important to maintain a good and close relation with the corresponding business partner in China, and it's not uncommon for companies to 'all-inclusive' nights out to pure tourist trips, he says.

 - I have myself taken a person on a trip. Surely, we had some meetings but it was definitely a covered tourist trip, he says

 - But today the situation is different, the relationships are cleaner. Multinationals keep bribery on an arm lengths distance, looking the other direction and pray all is good.

As the government been much tougher on corruption, the bribes have been far more sophisticated, says David Almström. One strategy to escape the government's sharp eyes is to use antiques to laundry money. The one who wants to give a bribe buys an antique for e.g. $250,000. Thereafter makes a copy at a fraction of the cost, to be able to show something during a revision. The original is being give as a bribe. The bribed returns to the antique dealer and sell it back and gets his $250,000 in cash.

 - As antiques are very difficult to trace, it has become an efficient way of laundry money. There a quite a few of these advanced methodologies to hide the bribes, says David Almström

If you as a businessman stays away from the bribes, you certainly will lose some deals, explains David Almström.

- But question is if you want those contracts. You may have something on the person you bribe, but if gets exposed, you yourself will suffer as much, he says.

What do you do as a businessman if you do not want to participate at all in the corruption carousel?

 - Primarily, you have to work with people that you trust, manage as much as possible by yourself and accept failure before cheating to be successful.

- But it is impossible to be 100% fault tolerant. You can sign clauses in the contract of zero tolerance; keep a tight control of your business, but it's really difficult to be sure that everything is according to the book.

The Foreign Dilemma

The current Anti-Foreigner campaign is the strongest since US bombed the Chinese Embassy in Belgrade in 1999 and it is directly targeted at a foreign life-style rather than illegal immigrants. Clearly, there can not be that many spys who cheat chinese innocent woman and not that many that commits serious crimes, but the campaign is focused on those issues and it is becoming quite ugly.

Mandated by Public Security Bureau, the police targets Beijing primarily with Sanlitun (bar/restaurants area) and Wudakuo (university area with a lot of foreigners) in focus; the Ministry of Propaganda is on their feet. Most noticeable, Yang Rui's anti-foreign comments on weibo has spurred debates. Yang Rui leads Dialogue (CCTV9) since many years back, which is a program in English to stimulate dialogue between China and the rest of the world. But his comments rather displays an ugly attitude to the foreign trash that destroys China's purity. 

But why now? 

I have two thoughts and one could be that it is actually about illegal immigrants or visitors with doubtable visa. E.g. there are many younger people that is in China working on visitor's visa as they either can't find an employer or want to avoid paying taxes. Given the US campaign to clean out visa for chinese teachers, the campaign could be an action towards US to be more flexible.

More likely though, I think this an effort to get the focus away from internal affairs. The Bo Xilai scandal and the move away from leftish state-driven politics along with the escape of house-arrested dissident Chen Guangming have caused a lot of trouble with and for the Chinese leadership. Add that to ever-increasing issues with humongous corruption cases emerging now, there is not a very strong trust in the leadership - and with the new leadership soon to take place, they need peace and quietness to get into the office neatly. 

Quite often in the past, the leadership has then directed the discussion on external issues - be it Taiwan, Tibet, Japan or US. This time, the campaign fuels the anti-foreign sentiments where it has become more difficult to get visa and where the campaign is directed against illegal immigrants, it has strong a focus on bad behaviors by foreigners - that is not necessary illegal, just not nice.

Luckily though, it doesn't seems to affect daily life too much :) Here is a sunshine story with comments alike.

For more information, Anne Henochowicz wrote a great article in Foreign Policy. 

Back In Da Jing

Back in Beijing again and this post is not about technology, nor about my return to Sweden but rather about what really annoys me in Beijing and still really gets to me when I come back to Beijing after only five weeks. These things really bothers me and as time goes by, things will change and my memories fade, but still.

The smell and the smog - see the two pictures to the left - bothers me a great deal. First thing you feel when you get out of the plane is the "Beijing Smell" - the smell of burnt coal and the pollution is a combination of China still using 75% coal to fuel its energy needs, the tripled number of cars in four years paired with a dysfunctional public transportation and limited road infrastructure (in all fairness, who could have foreseen this tremendous growth in cars?) and a disability of understanding how to operate a car in order to drive smoothly. 

Clearly, this will improve - as public transports are being built out and roads improve and people's knowledge increase (often aligned with traffic tickets). And China has an ability to gets things done, when they get it.

Secondly, though not right in my face, it is blatantly obvious that the only thing that matters is me, me and me and that I get more money, can show off my success and brag about all the money I get. This creates respect among equals and the less fortunated. Unfortunately, it comes at a price and the price is that nothing else matters. The China Law Blog reported (unscientifically) that the number of violent cases in business have tripled and the murder of Mike Hayward is just another example thereof. KIds that dies or gets seriously injured because milk is tainted with Melanin is another example. And the list just gets longer and longer day by day.

Thirdly, the foreign Beijingers.. I do not know what it is with them and it is not true for all of them (us) but some of us behave utterly arrogant and unpleasant and display a view of racism that "these low-level chinese uneducated creatures" can not read their mind, understand their winks and most of all, appreciated and learn their superior use of the English Language. A lot of times, and I must say I also apply a great deal prejudice here, most of these guys are not able to score the type of job and salary they have in Beijing; nor get access to the restaurants and clubs in their home towns; nor pick up the girls and crowds. What I can't understand is the lack of appreciation, being in the country of opportunities, where they can afford everyday's luxury and appreciate the struggle that all of us has here (locals, migrants and immigrants). You see bad-ass behaviors at bars, at work, in taxis, at restaurants. It can be good to remember who are the guests here. Even if I lived in Beijing more than half of the population has, I still realize I am an outsider, a guest and will also be, but I have had my lowlights as well (I am not a saint)

In Sinica's podcast, The End of the Expat Package, you can here a nice analysis about the situation but the truth is just because you speak chinese (hey, 1.3B does) and that you are foreigner (hey, you are not the only one) does not mean you have a great future in China. I may not agree upon all their thoughts, but insightful indeed. Maybe time to be humble and integrate into the society.

The good thing is that things are achange and only time will tell but I have good hopes of China's future development.