China, with its population of more than a billion potential consumers, its torrid economic development and increasingly important position in the world economy, represents the next great beachhead of growth for many of the largest American companies. But doing business in China is no simple task.
To remain compliant, companies must deal with a number of concerns, from vetting third-party representatives that work on their behalf to understanding cultural differences, or the complexities of the state-run economy, there are a host of factors to keep in mind.
Third parties and risk ranking
One way that companies can get into trouble is through the use of third parties. Companies doing business in China are likely to be large, and any large organization must, at times, contract with third parties to manage some aspect of their supply chain or provide a valuable service. But these third parties are responsible for the vast majority of FCPA violations of companies doing business in China.