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China's Investment Trap | Opinion

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Under the control of the Chinese Communist Party (CCP) there is no rule of law.

Under the control of the Chinese Communist Party there is no rule of law. Executives of foreign corporations and investment firms that invest in China must know this fact. Yet so many have taken the risk, enticed by profits and confident they can stay in the good graces of the ruling dictatorship.

However, unpredictable shifts in geopolitics, domestic economic concerns, and suspicion toward companies that become too big or too influential can trigger changes, and what once looked like solid ground—with contracts and agreements—is now a sinkhole. This is the trap: privileges bestowed by local policy are suddenly declared in violation of Chinese law.When the CCP changes its mind, the locally delivered 'preferential policies' are suddenly not only obsolete but illegal.

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