Chinese corporations are ruthlessly eliminating employees who have committed corruption. As President Xi Jinping's anti-corruption campaign expands from government officials to the industrial sector over the course of more than 10 years, it appears that corporations are aligning themselves with this trend. Furthermore, the analysis suggests that the increasing competitiveness of innovation among Chinese corporations has also contributed to the emphasis on operational efficiency, which serves as a backdrop to the crackdown on corrupt practices.
According to a report by the Chinese economic media Caixin on the 12th, Huawei published an internal notice stating that due to irregular recruitment violations that occurred on the 10th, it dismissed those involved and demanded the return of illegal profits and compensation for damages. Individuals involved in the recruitment violations reportedly took tests instead of job applicants, facilitated proxy testing, and stole and provided test questions. While the specific scale of dismissals has not been disclosed, various departments including the Information and Communication Technology (ICT) products and solutions division, semiconductor division, human resources management division, ICT marketing and services division, and quality and process IT division have reportedly been implicated in the incident. Caixin described it as "the largest collective punishment in Huawei's history."
Huawei is not the only Chinese corporation purging corrupt employees. ByteDance, which operates the short video platform "TikTok," disclosed on the 6th that it had fired 353 employees for legal violations and referred 39 to judicial authorities in just the past year. ByteDance placed those deemed to have maliciously harmed the company's interests on an industry blacklist and canceled their stock options. Tencent, another leading Chinese IT corporation, also dismissed more than 100 employees in January for violating the "Tencent High-Pressure Line".
The anti-corruption movements among Chinese corporations are increasingly spreading. The financial media reported that the percentage of corporate information on anti-corruption systems disclosed among the 800 publicly listed companies in China's mainland stock market rose from 19.38% in 2020 to 67.08% last year. The proportion of companies disclosing the results of their anti-corruption measures also reached 85.11% last year, a rise of 63.32 percentage points compared to four years ago. The financial media noted, "More and more corporations are recognizing the importance of anti-corruption and taking the lead in disclosing related information, demonstrating a positive attitude toward compliance management and integrity management."
This seems to be influenced by the anti-corruption efforts that have continued for over 10 years since Xi Jinping came to power. Xi has consistently intensified the crackdown on corruption affecting all levels of officials, from "tigers" (high-ranking officials) to "flies" (low-ranking employees) and even "foxes" (overseas fugitives). Last year, 58 senior officials, the highest number since Xi's inauguration, were removed from office. As the government's anti-corruption front expands into industries such as real estate, private education, healthcare, and defense, corporations are also adapting to this trend.
Recent analyses suggest that the intensification of innovation competition is also a factor accelerating Chinese corporations' anti-corruption efforts. The financial media stated, "Corruption within corporations is like cancer, seriously eroding the foundation of the business," adding that "corrupt practices distort the allocation of corporate resources, leading to the diversion of resources that should be used in core areas such as innovation, research and development, production optimization, and market expansion." In other words, employee corruption acts as a factor that increases operational inefficiency and causes corporations to fall behind in competition.
Chinese judicial authorities welcome and actively support these corporate movements. The People's Procuratorate of Shanghai, one of China's major economic cities, announced the "Practical Guidelines for Anti-Corruption in Corporations" at the end of December last year. While corporations attempt to establish their own anti-corruption systems, they have been noted to lack understanding of relevant laws and policies, and there has been no standardization of systems. The guidelines cover topics such as anti-corruption management and prevention, risk assessment, investigation and disposition, training, and criminal prosecution.