Chinese Gift-Giving, Anti-Corruption Law, and the Rule of Law and Virtue

38 Pages Posted: 19 May 2016

See all articles by Mary Szto

Mary Szto

Syracuse University College of Law

Date Written: April 23, 2016

Abstract

International businesses in China face daily pressures in complying with both anti-corruption law and local practices concerning gift-giving and business propriety. While many articles have discussed the US Foreign Corrupt Practices Act (FCPA), and the recent anti-corruption campaign in China, they mention only in passing possible reasons for China’s pervasive gift-giving culture. This article fills a gap by addressing the origins of this ubiquitous gift-giving, specifically in a rule of law and virtue.

First I discuss the FCPA, Chinese anti-corruption law, and the recent prosecution of Avon and GlaxoSmithKline. Then I explore the origins of gift-giving in ancestral rites, ancestral trusts, clan corporations, Confucian practices, ancient governance, guanxi ("relationships"), and mianzi ("face"). The Chinese word for gift, liwu, means "ritual object". In contrast, the Chinese word for bribery, huilu, is a mere transfer of money.

Effective guanxi, necessary for business today, requires ganqing ("familial affection"). Gift-giving is not only essential to guanxi and mianzi, but was originally part of good governance and virtue cultivation. In Confucian thinking, humans are ritual vessels for virtue. Mutuality of gift-giving fosters harmony with nature and in society. As giver becomes receiver, and receiver becomes giver; humility, reverence, generosity, and virtue result.

Chinese governance involved bestowing and receiving gifts, epitomized by the ding, sacrificial vessels which recorded the earliest law codes. Access to ding were given to families so they too could bestow gifts. Businesses originated in ancestral trusts where profits were used for ancestral worship, charity, and education for officialdom. The Chinese nation, family, and business enterprise were thus interrelated families tied together by gift-giving. Also, the advent of modernization and China’s recent meteoric economic growth has not lessened gift-giving, but has amplified it. I examine why Chinese have become the world's largest number of luxury goods consumers and why mooncakes are still regularly exchanged by businesses.

I argue that Chinese gift-giving cannot be eliminated or ignored; that substituting the rituals of giving with the ritual of FCPA compliance (e.g., costly training, recordation, and monitoring) is not the sole solution for combating corruption; and that virtuous gift-giving should also be used in the fight against bribery and corruption. This includes transparent accounting of gifts that are beyond mere tokens. I propose an international interdisciplinary taskforce to enumerate virtuous gift-giving practices in business. This taskforce should be composed of experts in law, government, business, ritual, religion, ethics, philosophy, anthropology, history, sociology, food, and art.

This article is part of a series of articles I am writing on the relationship between Chinese ritual and law.

Keywords: China, business, anti-corruption law, gift-giving, bribery, ritual, rule of law, Foreign Corrupt Practices Act, FCPA, Confucianism, ancestral worship, guanxi, merchant guilds, ancestral trusts, clan corporations, Chinese legal history, luxury goods, mooncakes, corruption, rule of virtue

JEL Classification: B10, B20, D20, D23, F00, H20, H70, K20, M14, N45, N80

Suggested Citation

Szto, Mary, Chinese Gift-Giving, Anti-Corruption Law, and the Rule of Law and Virtue (April 23, 2016). 39 Fordham Int’l. L.J. 591 (2016), Available at SSRN: https://ssrn.com/abstract=2769392

Mary Szto (Contact Author)

Syracuse University College of Law ( email )

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
298
Abstract Views
1,669
rank
119,215
PlumX Metrics