“China is a rule of law country . It is much better than before.” – comment on a social media site for networking in China.
The comment above shows a common untruth propagated by foreigners and companies working in China. The idea is to convince those of you who have never worked here, that business in China is not much different than business back home.
Unfortunately, nothing could be farther from the truth. The danger of such comments and the mutual admiration society that propagates such myths, is that they shield potential buyers of Chinese products and stocks as to the reality of what goes on in China today.
In order to clarify, in this article I will explain what the rule of law means, why it is useful and how and when it does not apply in China. I will then explain why this should be a concern to everyone.
As China invests in our countries, sells stock on our exchanges, and becomes integrated into our economies, we must truly understand her. It is imperative to have a working knowledge of how China operates, including the weak legal system and the power of the communist party.
These are two key elements of the problem with the ‘rule of law’ and China. As the world admires China for her advances, they often fail to acknowledge such inconvenient truths.
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