Clarity on Key China Issues All Foreign Companies Need to Understand

Abstract

I have lived and practiced law in Shanghai, China and throughout the world since 1997. I moved to China prior to its entry into the World Trade Organization (WTO) and prior to China’s full implementation of the Rule of Law. I was fortunate to have been in China to witness first-hand the birth and growth of the world’s most promising economic super power. I have seen phenomenal changes in the cultural, physical and legal landscapes of this country (and most specifically Shanghai where I have spent the bulk of my time) and greatly admire the tenacity, perseverance and cultural history of the Chinese people. Over the years I have been encouraged and optimistic at the reforms and progress that China has made in order to provide a safe investment environment for foreign companies wishing to access its markets and to do business in China. That having been said, and even though I personally enjoy life in China, China is still fraught with significant risk. Risk of corruption, risk related to an inadequate legal system that is heavily permeated with barriers that heavily favor local citizens and local PRC entities, risks related to corporate fraud (which is endemic throughout Chinese business and political spheres), risks related to basic enforcement of contracts, risks related to the judiciary and the Chinese legal profession as a whole and risks related to potential media (including blogs, especially Weibo which is in effect, the Chinese Twitter) manipulation of public opinion designed to interfere in judicial and arbitral decisions.