Attacking foreign corruption blunts China’s malign economic influence

China is building its influence throughout the Global South with infrastructure, cheap cash and bribes. With promises of easy financing, splashy new railroads and ports, and opaque deals that hide kickbacks and secret payoffs, China is sidelining American companies in the race for critical resources, partnerships, and contracts. Corruption and opacity are not incidental effects of Chinese engagement but central features. The Foreign Corrupt Practices Act (FCPA) makes it a crime for U.S. companies to bribe foreign officials, so American firms cannot imitate their Chinese rivals without risking steep fines and even jail time.  

However, Congress can level the playing field by holding corrupt foreign officials to the same standards as U.S. companies, adding consequences to the widespread bribery demands that bedevil law-abiding Americans and benefit China’s state-owned businesses that are willing to pay up. A bipartisan bill passed by the Senate last month as part of the annual must-pass defense spending bill known as the Foreign Extortion Prevention Act (FEPA) would allow U.S. law enforcement to prosecute foreign officials for demanding or accepting bribes from American individuals and companies, from any company listed on a U.S.-based stock exchange, or from any person while present in the United States. 

This proposal would bring U.S. anti-bribery laws closer to those of other democracies like Germany, France and the United Kingdom. By joining this group of allies, the U.S. adds its significant enforcement heft to the fight against global corruption.

Most importantly, it would reinforce ethical business practices and promote American democratic values to the world — a strategic advantage over China’s corruption-driven meddling. This gives the U.S. an opportunity to reset the dialogue about the rule of law and its place in international commerce.

Under the FCPA, individual Americans and companies listed on a U.S. stock exchange risk criminal prosecution, fines and jail time for offering or giving a bribe to a foreign official. And yet the official who demands or receives such a bribe typically faces no consequences at all. An OECD study found that 80 percent of foreign officials faced no punishment at home for demanding or receiving bribes. And once an American company turns down a solicitation, the responsible official frequently moves on to a Chinese state-owned enterprise, which is generally all too willing to bring gift boxes filled with cash.  

Corrupt officials may hold positions of power on the other side of the world, but frequently, their cash, homes and lifestyles are in the U.S., parading their stolen money on the beachfronts of Malibu. Corruption has a direct impact on America even when foreigners both give and take the bribes. Those who amass millions in dirty money often hide it in U.S. real estate markets, private equity funds and Midwest factories. Perhaps most damagingly, dirty money also filters into our political system, putting our democracy at risk. Corrupt foreign officials bankroll lawyers and lobbyists that work tirelessly to influence politicians and policy at the expense of ordinary Americans.

Corruption is also not merely a matter of cash and securing contracts — corruption fuels wars, torture and broken countries. For example, the former president of Guinea, Alpha Conde, engaged in human rights abuses, killed unarmed protestors and children, and oversaw endemic corruption. This past March, the U.S. Securities and Exchange Commission found that payments by mining company Rio Tinto were made in order to bribe a high-ranking Guinean official on behalf of Conde, and the company had to pay millions of dollars in fines under the FCPA. Conde and his allies got off scot-free. After a 2021 coup, Conde fled the country, presumably with his cash, but still the U.S. lacked the tools to prosecute Conde, who lives comfortably in exile in Turkey.

Before he was forced from power, Conde agreed to a massive $2 billion hydroelectric dam project under China’s Belt and Road Initiative. The project displaced 16,000 locals who will likely never see any of the electricity the dam generates, which will be used for mining companies and for export. The people of Guinea suffer, while Chinese businesses and the country’s elites benefit. It is time for the U.S. to add a powerful new tool to its global anti-corruption arsenal.

If we don’t adequately disincentivize foreign bribe demands, we open the door for foreign officials to act with impunity and undermine democratic institutions in countries that are already under stress. Across the Global South, China’s state-owned companies are signing opaque deals that send developing countries into debt distress, while their leaders see millions of dollars flowing to their personal pockets.  

Fighting China’s corrupt and malign influence in fragile economies requires recalibrating the consequences for the blatant bribe demands by the foreign officials. FEPA would strengthen the law enforcement toolkit against these officials, encouraging a fairer and more transparent process that changes the calculus on one of China’s main avenues for influence. 

FEPA also places the United States on the side of ethical business practices and American financial values, lending its full support to a powerful and increasingly vocal community of like-minded countries saying “enough is enough” to foreign corruption and business extortion.  Now is our opportunity to counter China’s corruption machinery and reinforce our rules-based financial system, showing the world the power of positive American economic engagement.  

Elaine K. Dezenski serves as senior director and head of the Center on Economic and Financial Power at the Foundation for Defense of Democracies. Scott Greytak is the director of Advocacy of Transparency International U.S., where he manages the office’s legislative agenda and oversees its Anticorruption Policy Lab.