Chinese firms with operations across borders face more regulated management

Chinese enterprises operating across borders are expected to face more regulated management, with a draft law requiring them to establish integrity departments or appoint dedicated staff — based on their size, business scope and risk prevention and control — for clean governance and compliance.

The draft law on combating cross-border corruption was submitted for its second reading on Monday to the ongoing session of the Standing Committee of the National People's Congress, China's top legislature. The session runs through Friday. The document was first submitted for deliberation in late August.

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According to the latest version of the draft, which is divided into six chapters and 47 articles, relevant companies may formulate separate clean compliance rules for their overseas departments or subsidiaries, assign dedicated officers to these units in light of actual circumstances, and formulate duty guidelines for them.

Yang Chao, an associate professor of law at Beijing Normal University, noted that corporate clean compliance is a key pillar for enterprises to meet their anti-corruption obligations.

Welcoming the provisions on clean compliance in the draft law, Yang said that such measures "will help prevent improper benefits from being channeled through intermediaries and will also help push companies to integrate anti-corruption work into their day-today management and operations".

"Beyond that, legislating on these matters will provide institutional safeguards for enterprises going global and for jointly building a road of integrity with other countries," she added.

Zhang Lei, a law professor at Beijing Normal University, said the provisions in the draft law indicate that the management of Chinese enterprises expanding overseas or engaging in international operations will become more standardized.

Setting up integrity departments or appointing dedicated staff will further promote the fulfillment of clean compliance obligations by such enterprises, and will also help guide enterprises to operate lawfully, reducing — or even eliminating — the occurrence of cross-border corruption from within, he said.

Zhang noted that tackling cross-border corruption through legislation is a crucial demonstration of full and rigorous Party self-governance, which was underscored in a resolution adopted at the fifth plenary session of the 20th Communist Party of China Central Committee that concluded on Thursday.

"The resolution emphasizes the need to enhance international cooperation in the fight against corruption, intensify efforts to track down fugitives and recover illicit assets, and improve the effectiveness and efficiency of managing cross-border cases. These priorities are also underscored in the draft law," he said.

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Zhang also highlighted that the formulation of the law represents a significant step in the path of anti-corruption with Chinese characteristics. "It serves as an important window for showcasing to the international community China's achievements in combating corruption through the rule of law," he said.

While outlining requirements for enterprises, the draft law places greater emphasis on respecting human rights and adds provisions that strengthen the protection of state secrets, business and trade secrets, as well as personal data and privacy.

Official data shows that China is a major trading partner for more than 160 countries and regions, and its total trade in goods has ranked first in the world for nine consecutive years. By the end of 2025, Chinese investors had established more than 50,000 overseas enterprises across 190 countries and regions.

Contact the writers at caoyin@chinadaily.com.cn