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China's Message To Foreign Business Is Clear. "Whatever."

By Dan Harris and Steve Dickinson

Newsweek recently did a story on China, entitled, "It's China's World. We're Just Living in It. The middle kingdom is rewriting the rules on trade, technology, currency, climate--you name it." The article is good, but what struck me about it was a killer quote at the bottom of the last page of the hard copy, but not in the internet copy. The quote is as follows: The message from Beijing is clear: "No matter what we do, we know you'll still line up to invest with us." I love this quote not only because it is 100% true (if I were being interviewed on this after a sports game, I would have said 110% true), but also because it pretty much sums up what has been going on in China during the last six months in terms of getting necessary government approvals for foreign businesses. "Knock, Knock? Who's There? China Tax Man." "Business Law Trends of 2010" "A China That Can Say No" China is getting tougher on foreign companies and it is doing so from the position that it cares a lot less now about foreign investment than it did ten, five, or even two years ago. There was a time where China believed it needed foreign businesses to help Chinese companies innovate. Rightly or wrongly, that no longer seems to be the view and the strong sense we are getting from both Beijing and the provinces is that China is neutral on foreign investment these days. It accepts it as the price it must pay to keep selling its goods overseas, but woe to the foreign company that does not comply with every single legal and tax requirement. What are you seeing out there?

Full post as published by China Law Blog on April 26, 2010 (boomark / email).