Overseas firms making sure they keep their hands clean

"From a businessman's point of view, it would be best if we can get deals done without giving any gifts," Chan said.

Chan, who set up a joint venture with a State-owned garment factory in Wuxi, Jiangsu province, in 1978, was among the first wave of overseas investors in the Chinese mainland after reform and opening-up began.

Chan, who is chief executive officer of YGM Trading Ltd, said it's the "gray zone" that leads to headaches for overseas investors.

Avoiding risk of corporate bribery

Top 10 white-collar crimes in 2013

"In China, every policy looks fine on the central government level, but the situation on the ground is another story," she said.

"Invisible barriers block outsiders. That's why there are so many middlemen. When market share depends on the locals who declare bribery is the only solution, there's limited choice for management."

"For too long, especially in industries where companies are selling directly to government bodies or State-owned enterprises, corruption has been a major problem," said Davide Cucino, president of the European Union Chamber of Commerce in China.

Cucino said the chamber and European companies are supportive, rather than wary, of efforts to crack down on corruption.

"We have long called for the Chinese government to crack down on corruption. European companies feel that their compliance practices put them in a competitively disadvantageous position and affect their opportunities in China," he said.

"European companies tend to have higher standards against corruption and strong global standard operating procedures. We are bringing these to China, which should help the Chinese government's efforts."

In the Corruption Perceptions Index 2013 published by Transparency International, China scored 40 compared with 39 in 2012. A score of 0 represents "highly corrupt", while 100 means "very clean".

The 2013 score places China as the 80th country on the list whereas Denmark, which scored 91, placed first as the cleanest.

According to a survey released by AlixPartners LLP in January, 41 percent of multinational companies with $150 million revenue or higher see "significant risk" of corruption in China.

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