Published by ChinaMNC · Yancheng

Anti-Corruption Campaign Intensifies: What Foreign Founders Operating in China Should Know

China's anti-corruption drive continues under a high-pressure approach, with discipline inspection bodies pursuing both senior officials and grassroots misconduct. For foreign founders registering or running a company in China, the campaign signals tighter scrutiny of business conduct, official dealings and compliance culture.

Anti-Corruption Enforcement Continues at Pace

China's leadership has reaffirmed its commitment to sustained anti-corruption enforcement, according to an official article published on the Henan provincial government portal and sourced from People's Daily. The piece, marking the 90th anniversary of the Red Army's Long March victory, quotes Xi Jinping stressing the need to "persist in advancing full and rigorous Party self-governance" and to achieve the Party's "self-purification, self-improvement, self-innovation and self-enhancement."

For foreign founders setting up or running a company in China, the message is a practical one: the compliance environment around dealings with officials, procurement, licensing and local administration remains under active scrutiny. Understanding the direction of enforcement is part of sound market-entry planning.

Scale of Enforcement

The article reports that in the first three quarters of this year, discipline inspection and supervision organs nationwide opened 800,000 cases and disciplined 680,000 people. Since the 18th Party Congress, the article states, China has developed an anti-corruption path under the centralized, unified leadership of the Party Central Committee, combining root-cause treatment with a three-pronged approach: making officials afraid to be corrupt, unable to be corrupt, and unwilling to be corrupt.

Xi is quoted as saying this path "must be firmly followed."

Why It Matters to Business

The article cites Xi warning that if corruption is allowed to spread, it "will inevitably damage the economic development environment, induce various risks and hidden dangers, and shake the Party's governing foundation." That framing links anti-corruption work directly to the business climate — a point foreign investors should note when assessing operational risk and designing internal controls.

Xi also stated that "corruption remains prone to occurring and recurring" and that a "high-pressure stance must not waver," with every corrupt act investigated, every instance of graft punished and no hiding place left for corrupt elements.

Grassroots Enforcement and Everyday Fairness

The campaign is not limited to senior figures. The article describes action against so-called "fly corruption and ant corruption" — misconduct by low-level officials. It recounts a case in Shuangqiao Village, Qiaoting Township, Pingle County, Guangxi, where villagers noticed irregularities in accounts after collective mountain land was leased. Discipline inspection cadres investigated, a village official who embezzled collective funds received Party discipline, and withheld rent was recovered. A villager is quoted saying: "Everyone's hearts are united again."

The article notes that management of rural collective assets, medical insurance funds and elderly care services are among the areas being pushed forward, with residents said to feel that fairness and justice are close at hand.

Practical takeaway: foreign-invested entities with local government touchpoints — land use, subsidies, local procurement, village-level labor arrangements — should expect greater documentation scrutiny and should keep clean, verifiable records.

Better Detection Through New Methods

Xi is quoted saying authorities must "grasp new trends and characteristics of corruption, innovate methods, and further discover, accurately identify and effectively govern all types of corruption." The article describes how the Dianjiang County discipline inspection commission in Chongqing, while verifying a cadre's improper hosting of a wedding banquet for his son, found a close relationship with a businessman and ultimately uncovered serious disciplinary and legal violations. A campaign against improper dining and drinking led to punishment of several Party members and cadres for corruption behind conduct problems.

The article states that unhealthy conduct and corruption are two sides of the same coin, and quotes Xi calling for "connecting rectification of conduct, discipline and anti-corruption" — punishing intertwined problems through joint investigation and eliminating common roots through joint treatment.

What This Means for Corporate Compliance

• Hospitality and gifts: entertainment, banquets and gifts involving officials are an enforcement focus; keep policies conservative and documented.
• Intermediaries: relationships between officials and businesspeople are explicitly targeted; vet agents, consultants and local partners.
• Escalation patterns: minor conduct issues can lead to deeper investigations — internal reporting and audit trails matter.

The Three-Pronged Approach

The article describes "advancing the three prongs together" as an important part of Xi's thinking on Party building. Xi is quoted saying it is "not only the basic policy of the anti-corruption struggle but also an important strategy for full and rigorous Party self-governance in the new era." The approach combines deterrence, institutional cages and voluntary compliance, with efforts to produce more institutional results and better governance outcomes.

Culture is presented as a foundational element. The article recalls Xi's June 2022 visit to the Three Su Shrine in Meishan, Sichuan, where he said China should "draw on the concepts and thinking of governance from fine traditional Chinese culture." The article says a culture of integrity is being promoted to foster an environment that rejects corruption and extravagance.

In his July 1 speech this year, Xi summarized six fine qualities of the Party, including "focusing on strengthening itself and always full of vitality," and called for removing all factors damaging the Party's advanced nature and purity. The article also recalls Xi's October 2022 remarks to the Guangxi delegation at the 20th Party Congress, where he said Communists are materialists and fearless, quoting: "Though thousands oppose me, I go forward."

What Foreign Founders Should Do

The article closes by saying that on the new journey, studying and implementing Xi's thinking on Party building and maintaining perseverance will help win the anti-corruption battle and "escort Chinese modernization steadily and far with clean and upright conduct."

For foreign founders, the practical implications are clear:

• Build compliance from day one. Anti-bribery and anti-corruption policies, gift and hospitality registers, and third-party due diligence should be in place before operations begin.
• Understand local enforcement. Discipline inspection bodies operate at national, provincial and county levels; local conduct issues can trigger broader investigations.
• Keep government interactions transparent. Licensing, land, subsidies and inspections should be handled through formal channels with proper records.
• Train local teams. Staff should understand rules on dealings with officials, procurement and conflicts of interest.
• Monitor regulatory signals. Official statements on enforcement priorities can inform risk reviews and internal audits.

China's market remains open to foreign investment, and the anti-corruption campaign is framed as improving the business environment by reducing irregular interference. Founders who align governance with these expectations are better positioned to operate sustainably.

Foreign founders can contact ChinaMNC on WhatsApp / WeChat at +86 153 1898 8535 for help registering and operating a company in China.

This summary is based on information published by the relevant Chinese government website and is general information, not legal or tax advice.