Lessons and bribes

This week, we present business press reaction to the bribery conviction of Rio Tinto employees in China. We also look at what older members of the EU can learn from former communist countries in Eastern Europe.

The Rio Tinto Lesson

Four employees of the Australian mining company Rio Tinto were convicted on 29 March in Shanghai of accepting bribes and stealing commercial secrets. The Wall Street Journal writes that the case shows how complicated it is for foreign companies to do business in China.

… Rio [Tinto] … will likely keep doing business in China for years to come: Considering the business it is in, it hardly has a choice. But for those companies that do have a choice, this case is a warning about the dangers of doing business in a country where the legal system too often remains opaque and apparently arbitrary. There’s a warning in that for China, which will find foreign investors increasingly looking askance at its markets in the absence of sound legal reforms.

What went right

If Spain, Portugal, Italy and Greece want to learn how to take difficult decisions, they should follow the example of former communist countries in eastern Europe, writes The Economist.

… The east European economies, for all their faults, have shown more flexibility in both labour markets and in what they produce than have many older EU members. Moreover, the cuts in spending and increases in taxes and the retirement age that some ex-communist countries have imposed over the past year were much more savage than anything that Greece or Spain have so far contemplated. … Greece and the other Mediterranean countries in the euro area — Spain, Portugal and even Italy — nowadays seem to be sicker than ex-communist Europe. …