Why Contract Gifts in China Do Not Work

Discussion in 'China' started by JAISWAL, Dec 18, 2011.

  1. JAISWAL

    JAISWAL Senior Member Senior Member

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    Why Contract Gifts in China Do Not Work | Top Secret Writers
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    If you read my article earlier this week on the
    practice of Guanxi in China – then you know that I
    was left with a very bad taste in my mouth after
    personally experiencing the behavior.
    In this update, I would like to share a story about
    a bridge contract in China. It was a contract won
    by China Railway No. 9 Group…but what
    happened after the contract was won is
    something that most people outside of China
    would likely consider considerably unethical.
    A few years ago, a bridge was needed Jilin, China.
    The cost of the project was 2.3 billion RMB, or
    nearly U$360 million. The bridge was lengthy at
    74.1 km long, and was to be a crown project for
    the area.
    Bids were tendered, and a winner was
    announced. A bit later, construction began on this
    “bridge”.
    Up to this point, this story sounds like business
    as usual, but remember that in China, not all is
    that it appears to be.
    The Bridge Construction Sub-Contractors
    Upon winning the bid, China Railway No. 9 Group
    Company subsequently sub-contracted the work
    out to various other parties.
    Per Chinese law, China Railway No. 9 Group
    Company was responsible for following up with
    all of the work and the quality of the
    subcontractors, a thing that they may have
    forgotten to do.
    As the story goes, one of the sub-contractors
    hired by No. 9 group was Jiangxi Changsha
    Construction.
    Unfortunately, the company was not the really
    “Jiangxi Changsha Construction”, but allegedly a
    group of “thieves” and con men. And it only gets
    worse.
    This group of con men allegedly subcontracted
    the work out to villagers and itinerant laborers
    with no bridge building experience. One of the
    leaders of the itinerant group was a man named
    Lu who was actually a cook by trade.
    Mr. Lu claimed that although he had no
    experience, it was not a problem because many
    sections of the bridge were made by groups of
    men such as himself. And further investigation
    bore out this news.
    According to the locals, they were even paid to fill
    the “supporting pillars’” with rocks and small
    stones before a wet sand mixture was applied.
    The sand and stones were utilized in lieu of
    concrete, a thing the chef either did not know
    how to properly use, or could not afford.
    The Story Breaks
    The Beijing News broke the story and supposedly
    possesses video of excavators dumping rocks
    into pillars when the on-site inspectors were off
    duty. The villagers who saw and took part in the
    bridge building process stated that they would
    never ride on any train going over that bridge.
    Upon hearing of the mess, China Railway No.9
    Group said that they may not have done the
    appropriate level of due diligence.
    They admitted that they did not even verify the
    qualifications of all the subcontractors, including
    the one which hired the chef.
    Their reason for not scrutinizing the group was
    that the group was highly recommended by a
    chief of the railway bureau.
    The enormity of this story is beyond belief, and
    shows the depth and breadth of corruption here.
    When project contractors are chosen based on
    how much one can skim off the top, the project
    is destined to flop or may even be fatal. When so
    many people have their hands out and so many
    more willing to fill it with coin, it’s little wonder the
    quality of Chinese projects is often suspect at
    best.
    Why Bribery pays in ChinaAnother way to look at it – just how much of all
    of the new investments that that the U.S. has paid
    out to China has deviated from the path of project
    into the hands of local corrupt officials?
    I wonder how much of the $30 to $ 40 billion
    dollars that went into the Olympic projects
    actually made it to the intended project? In a
    country like China, no one really knows.
    Perhaps what bribery means in China can best be
    summed up by the words of Qiu, a friend of
    mine who works with the Chinese government.
    Part of her responsibility is to investigate
    corruption throughout the countryside. When I
    asked her about corruption in China, she said,
    “You can consider this as chances or
    opportunities…”
    Interestingly enough, before finishing this article, I
    was asked to recommend someone for another
    project.
    I did as was asked, and recommended a Chinese
    company that I knew of. Within moments of
    appraising them of the new business, they
    quickly sent me a text stating that if they won the
    business, they would split the profits 50-50 with me.
    Such is business in China.
     
    W.G.Ewald likes this.
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