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Due Diligence in China
As a leading producer of electric vehicles and advanced AI technologies, China’s role in the global economy in 2026 is markedly different from what it was ten years ago. The global oil price shocks of 2026, driven by the US/Israel-Iran conflic, combined with reduced exports resulting from import tariffs imposed by the Trump administration on China and weak domestic consumption, have contributed to relatively moderate economic growth of around 5%. Nevertheless, Chinese technology companies are more innovative than ever, releasing open-source flagship AI models such as DeepSeek V4, Moonshot Kimi K2.6, and Zhipu GLM-5 in rapid succession. Recent visits to China by Western leaders and Russian officials in 2026 have also sent strong signals that China remains an important global political and economic partner.
Investigative research to protect your reputation and integrity
Lack of transparency has been a major factor for international companies deciding to engage more actively in China and at the same time has constrained the role of Chinese companies played overseas. Transparency International’s Corruption Perceptions Index 2025 places China in position 76 out of 182 countries.
Reasons to be vigilant
For foreign companies who wish to or have established relationships with Chinese companies, it is crucial to conduct thorough reputational due diligence on their business partners, including a review of open source materials available online and in the media. This is especially so for the following reasons:
- To maintain their integrity and reputation and avoid being involuntarily entangled in the circle of bribery and corruption.
- To reduce the risk of becoming a target of the government's anti-corruption activities.
- To establish greater trust and confidence in the relationship with current and future local business partners.
Regional expertise
At Maddocks Insight, we have the linguistic capabilities in Mandarin Chinese, Cantonese and English, the research competence and the political and economic expertise to assist our clients with conducting investigative due-diligence research in relation to China, including the mainland, Hong Kong and Macau, as well as Taiwan.
Features of investigative DD in China
Some of the points of concern to keep in mind when performing integrity due diligence in China are: Media coverage - due to political sensitivities in China, frequently red flag issues are not covered in detail by the local media. Therefore, our searches are always backed up by thorough internet and media research including the English language. Alternative sources of information - with more than 1 billion internet users in China by the end of 2025 and a penetration rate of more than 80%, online content in China is not only limited to the media. Online social media platforms such as Weibo, Xiaohongshu and Douyin are valuable sources of information for our open-source research and frequently help uncover reputational issues and other red flags.
Anti-corruption drive in China
China's leader, Xi Jinping, has continued his long-running campaign against "tigers and flies" — corrupt officials at all levels of government and industry. Anti-corruption enforcement in China remains extensive and has led to investigations involving senior government officials, state-owned enterprises, financial institutions, and private-sector actors.
At the same time, transparency in China’s legal and commercial environment remains limited in certain areas. State-owned enterprises continue to hold significant influence in strategic sectors of the economy, and complex ownership and governance structures can create challenges for external oversight and compliance assessments.
Limited access to reliable information may create operational, regulatory, and reputational risks for companies operating in or engaging with the Chinese market. As a result, integrity due diligence remains an important component of risk management for businesses with exposure to China.
Please contact us today to discuss your due diligence research needs in China.
