Rich Brubaker over at All Roads Lead to China has a post up on how the Chinese government makes its laws with its own populace in mind, not out of consideration for foreign companies. The post is entitled, “Regulations in China: Are You Prepared? Are You Ready? Are You OK?” and here is its money quote:
There is and has been a sense of entitlement in the foreign community about their contribution to China, and its economy. that because of foreigners and foreign investment, everything that has happened in China.. that without foreigners this place would flush down the drain… etc. and even if true, that does not mean that they should just bend over to the interests of foreign parties.
They have 1.4 billion people to manage, and at all times that number will trump anything else offered.
Rich is absolutely correct and his point really ought to be obvious, but it is not. I am constantly hearing from foreign businesses complaining about this or that Chinese law and then stating that China just does not understand what its laws do to foreign business. Well, the Chinese government does understand, but foreign businesses (particularly those smaller than Intel, Caterpillar and Coca-Cola) are just not one of its chief priorities.
So, as Rich says in this post, if you are a foreign business in China, you must always keep your ears to the ground regarding upcoming laws that might affect your business. Unfortunately, sometimes this works and sometimes it does not, as there have definitely been times in China where laws or regulations have come out without any real warning.
China is not without its legal risks. For more on handling China’s ever changing legal regime, check out China Law As Guessing Game.