China accuses GSK foreign executive of bribery

The headquarters of pharmaceutical company GlaxoSmithKline is pictured in west London on July 29, 2013. 

Chinese authorities have accused a foreign executive with British pharmaceutical company GlaxoSmithKline of ordering his subordinates to bribe Chinese doctors in order to boost the company’s drug sales in China.

China’s government will now prosecute Mark Reilly, the foreign executive for GSK for bribery. For the Chinese government to go after a non-ethnic Chinese foreign executive is unprecedented and in this case, the executive in question - Mark Reilly - returned to China from his home in the UK to assist with the police investigation.

According to Jim McGregor, author of "One Billion Customers," Chinese leader Xi Jinping is doing his best to show his country that the Party will root out corruption. Part of that strategy, says McGregor, is to go after foreign companies.

“When China has troubles and they want to clean up an industry or stop certain practices, they’ll usually go after the foreign companies because they’re not connected politically like a state-owned company who is connected to all kinds of people and it’s very complicated to go after them because you affect a whole network of people, so foreign companies are more of a free-fire zone,” says McGregor.

The move has long-time China hands like McGregor asking: If China's government plans to charge GSK with giving millions of dollars' worth of bribes in China, what does it plan to do about the Chinese officials and doctors who were allegedly on the other side of the bribes?

About the author

Rob Schmitz is Marketplace’s China correspondent in Shanghai.

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