Business Ethics in the Chinese Context

Stephan Rothlin, general secretary of the Center for International Business Ethics in Beijing, expressed confidence that there has been real progress on the climate for business ethics in China over the past two years. Rothlin updated the Markkula Center for Applied Ethics Business and Organizational Ethics Partnership in January on the situation in China since his last visit two years ago.

He cited movement in the following areas:

Worker Rights and Labor Standards

China's new Labor Contract Law, which went into effect Jan. 1, protects longtime workers from being fired without cause and requires employers to contribute to their workers' social security accounts. Other legislation is supposed to protect worker safety and set working conditions.

While Rothlin referred to these as "legal milestones," he stressed the need to enforce the laws. In the case of child labor, for example, he pointed to revelations in June that children as young as eight had been virtually enslaved and forced to work in rural brick kilns in Shanxi and Henan provinces. Party officials, he said, had a stake in some of these operations.

Rothlin hopes that global companies will lead the way in adhering to the stronger standards in China's new laws, and he spoke favorably of Nike's public commitment to uphold them.

Consumer Rights

The wave of product recalls in 2007 "damaged the 'made in China' brand," Rothlin said, and made the subject of consumer rights more prominent and legitimate in China. He discussed product safety, prompt action on problems, and false advertising as areas of concern.

Anti-Corruption Activities

The 2006 crackdown on corruption in Shanghai-including the firing of Mayor Chen Liangyu-"sent shockwaves" throughout the country, Rothlin said, and suggested that China was ready to get more serious about issues such as bribery and graft. "It takes more than lip service to bring change," he said.

"We have to rely on the commitment of top officials to combat corruption," Rothlin said, but he added that he believes party officials realize they must address the perception that China is a corrupt environment for business because "they lose credibility by doing nothing."

To a question from one of the partners on whether a corporate "No Gifts" policy would be appropriate in China, Rothlin gave a quick and simple answer: No. He said that a categorical