China – Transparency International’s 2020 Corruption Perception Index Impacted By Covid-19 Corruption Challenges.

Key takeaways
 

TI's CPI continues to be an important gauge for assessing corruption risk and is a helpful tool when doing business in the region. The 2020 CPI ranks 180 countries and territories by their perceived levels of public sector corruption, according to experts and business people. The CPI uses a scale from zero (highly corrupt) to 100 (very clean). Companies should pay close attention to those countries and regions that score poorly on the index, and identify any compliance risks that may be previously undetected.
 

TI's latest report highlights the impact of corruption on government responses to COVID-19, comparing countries’ performance in the index to their investment in healthcare and the extent to which democratic norms and institutions have been weakened during the pandemic. TI's research shows that corruption is more pervasive in countries least equipped to handle the COVID-19 pandemic and other global crises. TI's research also looked at foreign bribery in the global export space and found that many countries that export goods and services heavily are failing to investigate and prosecute companies that pay bribes to win business abroad.
 

In China and the region generally, given the shifting sands of the business environment brought about by increasing economic pressures and geo-political tensions, companies need toremain vigilant against risks arising from government touch-points and business models that rely upon third-party relationships, such as those with agents or intermediaries. As outlined in our recent alert, China introduced into its legislation the concept of compliance management on 1 January 2021. This means that compliance policies, robust internal controls and on-the-ground implementation measures remain at the forefront of 2021 priorities.
 

Highlights of TI's 2020 CPI scores
 

• Asia Pacific has an average score of 45 on the CPI and ranked above other regions such as the Americas (43), Middle East & North Africa (39), Eastern Europe & Central Asia (36) and Sub-Saharan Africa (32).
   

• With a score of 88, New Zealand is consistently one of the top performers on the CPI, both in the region and around the world.
   

• Singapore, Australia, Hong Kong and Japan follow New Zealand closely in the Asia Pacific region.
   

• China improved steadily on the CPI, increasing by six points, from a score of 36 in 2014 to 42 in 2020.
   

• Myanmar is a significant improver on the CPI, increasing by 13 points since 2012 to a score of 28 in 2020.
   

• The table below sets out some key jurisdictions in Asia Pacific, showing their 2020 CPI rankings and scores against their 2019 position.
   

Jurisdiction	CPI score 2020	Rank 2020	CPI score 2019	Rank 2019
New Zealand	88	1	87	1
Singapore	85	3	85	4
Australia	77	11	77	12
Hong Kong	77	11	76	16
Japan	74	19	73	20
Taiwan	65	28	65	28
Korea, South	61	33	59	39
Malaysia	51	57	53	51
China	42	78	41	80
India	40	86	41	80
Indonesia	37	102	40	85
Thailand	36	104	36	101
Vietnam	36	104	37	96
Philippines	34	115	34	113
Myanmar	28	137	29	130
Cambodia	21	160	20	162

 

 

For further information, please contact:

 

Vivian Wu, Partner, Baker & McKenzie
vivian.wu@bakermckenzie.com 

 

1 https://www.transparency.org/en/cpi/2020