Ben Chu: GlaxoSmithKline is somewhere between a giant tiger and a fly for China's leadership

The abject apology issued by Glaxo’s chief executive underlines the company's subordinate status

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The Independent Online

Xi Jinping, China’s paramount leader, has pledged to both swat “flies” and catch “tigers” in his crusade against endemic corruption. That has been interpreted as meaning he intends to crack down equally on petty chiselling bureaucrats and also the mighty robber barons. So where do GlaxoSmithKline and its head of operations in China, Mark Reilly, fit in?

At first glance Glaxo, a deep-pocketed, foreign multinational, seems like a Tiger. And yet in another respect Glaxo and Reilly are more insect-like. For one thing the crimes of which Glaxo has been found guilty – bribing doctors to promote its products – are nothing extraordinary by Chinese standards. The medical industry, where doctors are low-paid, is notorious for this kind of thing.

For another, multinationals are not centres of political power in China as they are in parts of the West. They are supplicants, desperate to be allowed access to the vast domestic market by the protectionist Beijing authorities.

The abject apology issued by Glaxo’s chief executive, Sir Andrew Witty, underlined this subordinate status. This whole business remains opaque. We do not know enough to say for certain what lay behind the prosecution. But what we can say is that it brings home the profound risks facing foreign firms – whether Tigers or flies – that operate in China.