China 2015: What’s Going To Happen?

I know its getting a bit late to be doing a year end/first of the year type blog post, but I just can’t help it. I just read Gordon Orr of McKinsey’s What Could Happen in China in 2015? and it is too good just to let slide by.

Orr mostly focuses on the economy and innovation and does a great job with both of those things. But this being a law blog (and me being a China lawyer), I was drawn to his section entitled, “Rule of law increases its impact in 2015.” I love this section because it both repeats what we have been writing about for the past few years and it very much dovetails with my recent Forbes article, Six China Business Law Trends and my even more recent Linkedin article, 2015: China Law Trends That Will Impact Your Business. Here is that section:

A comment you’ll hear less in 2015: I can do this—it’s China. Businesses will more fully recognize that anticorruption initiatives and rule of law with Chinese characteristics are long-term foundational elements of this leadership’s platform—they’re not optional, and they’re not going away. Companies will need to become clear about how recent statements—such as President Xi declaring that the objective of advancing the rule of law is conducive not only to updating state governance but also to deepening reform—apply to them.

We will see the government standardize more of its approaches to decision making on business and regulatory issues, using the precedent of cases heard. For example, reviews of acquisitions should be faster, with clearer conclusions. We will also see the government leveraging technology more to monitor, audit, and impose sanctions on bad behavior, from tax avoidance to overly aggressive entertainment of government officials. Where could anticorruption investigations bite in 2015?

• in an Internet company where a senior executive gets investigated for begging forgiveness, rather than asking permission, once too often
• in local government, where rapid asset sales made it possible for some sales to be made to favored individuals at below-market prices
• in companies that have yet to fully get their sales forces under control

I wholeheartedly agree. If you are doing business in China, you should start acting accordingly.

We will be discussing the practical aspects of Chinese law and how it impacts business there. We will be telling you what works and what does not and what you as a businessperson can do to use the law to your advantage. Our aim is to assist businesses already in China or planning to go into China, not to break new ground in legal theory or policy.