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Getting Shut Down In China. What Are The Odds?

Posted in China Business, Legal News

As I mentioned previously, I expect to be writing a number of posts arising from issues that were discussed at the recent Doing Business in China seminar I co-moderated last week.  At lunch, one of the attendees told me that they had been told by a higher up at a big U.S. retailer that they would not be going into China because they did not trust the government not to shut them down.

I pooh-poohed that, saying that the more likely reason was because this retailer knew that it would have no particular advantage in China and that it would be better off expanding elsewhere.  I then thought for a moment and added that I was not aware of a single foreign company that had been shut down in China when it was operating legally.  That evening I asked a number of the other speakers whether they were aware of an instance where the Chinese government had shut down a foreign company that had been operating legally in China and they too were not.  The odds of getting shut down in China are minimal if you are operating legally there.

Yes, China is and has been for some time stepping up its shut-downs of companies that are not operating legally there, but I just am not aware of an instance where it has done so to a foreign company that is abiding by its laws.

Are you?

  • Galina Vishnevskaya

    There are hundreds if not thousands of such cases when you factor in what the local Government told you you could do and then for some reason cahnged their mind or another Government department found out and complained. Foreign companies can in actual fact NEVER operate 100% legally in China and this is how they get you if you inadvertendly step on someones toes even if you were previously told – by the government – it was OK. Does that count Dan?

    • Chris_Waugh

      Surely if there are “hundreds if not thousands of such cases” then you must be able to give us a few examples?

  • http://www.facebook.com/jeff.gandy.10 Jeff Gandy

    operating legally has a completely different meaning in China as I am sure you know. And of course “operating legally” has a completely different meaning for Starbucks vs a small partnership opening one restaurant for example. I am 100% certain the Chinese see all closures as ligit. Even the ones where the lease is mysteriously cancelled for “renovation” of the building, or …. I could go on and on. As could anyone who has spent time there.