China improves placing on Corruption Perception Index

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Transparency International (TI) launched its annual Corruption Perception Index (CPI) recently, and China’s ranking continued to improve, moving up by two places to a rank of 77 from last year’s 79.

The latest 2017 CPI was launched on 21 February 2018. The CPI is the leading global indicator of public sector corruption and offers a snapshot of the relative degree of corruption by ranking countries from all over the globe. It has been used as an important gauge by companies in managing corruption risks when conducting businesses in foreign countries.

A country or territory’s score indicates the perceived level of public sector corruption on a scale of 0 (highly corrupt) to 100 (very clean). A country or territory’s rank indicates its position relative to the other countries and territories in the index.

2017 HIGHLIGHTS

TI has reported that this year’s results continue to show a high variance in
public sector corruption across the Asia-Pacific, and reveal that corruption in many countries is still strong. TI considers that Asia-Pacific countries, on average, are failing.

The latest CPI is a good reminder for companies that rely on its rankings to review their global compliance programmes and make regional adjustments accordingly. Companies should pay attention to those countries and regions that have dropped significantly in their rankings and scores, and identify any compliance risks that may be previously undetected.

Some highlights of the 2017 CPI, which ranks 180 countries and territories, include:

  • More than half of the countries in the Asia-Pacific scored less than 50 on the index scale of 0 to 100. On average, the region scores just 44;
  • China’s ranking has continued to improve, moving up two places to 77 from 79 last year, while its CPI score increased by one point;
  • Hong Kong’s ranking also improved, moving up two spots to 13 from 15;
  • In other parts of Asia: Singapore, South Korea, Thailand and Vietnam improved in their rankings, while Malaysia, India, Indonesia and the Philippines declined;
  • Globally, New Zealand ranked highest in 2017.

Business Law Digest is compiled with the assistance of Baker McKenzie. Readers should not act on this information without seeking professional legal advice. You can contact Baker McKenzie by e-mailing Danian Zhang (Shanghai) at danian.zhang@bakermckenzie.com