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Bribery and other illegal means of competition will mar a company's credit standing, the market watchdog in the booming southern Chinese province Guangdong has warned.

In its latest move to combat bribery in business, Guangdong Provincial Industry and Commerce Administration has decided to blacklist businesses that disregard the rules of fair play in open competitions by offering kickbacks, according to the administration's press release on Wednesday.

Businesses that offer bribes will face "severe punishment", it said without elaborating.

The crackdown will mainly target construction, land leasing, intellectual property trading, medicine and government procurement sectors, it said.

China has declared war on business-to-business bribes this year. It is revising laws and regulations and calling for concerted efforts from the government, business circles as well as citizens to fight corruption which could become a major threat to the country's investment environment.

Companies bidding for business in China sometime offer potential customers or partners kickbacks ranging from cash and luxury goods to paid holiday travel. Many companies believe that the practice is a "tacit rule" of the Chinese market until a Los Angeles company was fined in the United States for paying bribes in China.

DPC (Tianjin) Co Ltd or DePu, the Chinese subsidiary wholly owned by the Los Angeles-based Diagnostic Products Corp, had to pay US$4.8 million last May to settle issues related to illegal write-offs that were used to hide the expense of making bribes.

The company was found to have paid about US$1.6 million to doctors and others in public hospitals and then recorded the payments as legitimate expenses while the money was actually used to pay bribes.

(Xinhua News Agency March 23, 2006)