Protection Money and Your China Business

“I won’t pay. I know too much about extortion.”
Tony Soprano, Season 3, Episode 7,

One of the “interesting” things about representing companies in emerging markets is having to deal with organized crime play. The Associated Press, in a story entitled, China readies for crackdown on organized crime, recently wrote how the Chinese government is cracking down on organized crime in China.

There is one country in which my firm does a substantial amount of business where we were told multiple times that we would need to make monthly payments for our “own protection.” Thanks to the intersession of a local friend, the party seeking to “protect us” realized we were not a proper party for the proposed “business” relationship.

None of our clients have ever told us of having to pay such money in China and I have never asked.

I am asking now, though. Have any of you had to pay “protection” money in mainland China and, if so, in what city or cities? Do you have on good authority that others have had to make such payments? Were they domestic or foreign companies.

My sense with China has always been that the government in Beijing does not want to see this with foreign companies and has made this fact clear so as to generally prevent it.

But we would love to hear from our readers on this. What are you seeing/hearing on this?

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China Business