Smoke, Mirrors and Bureaucrats: Corporate Research in China

By Arjun Subrahmanyan

In a country where the executive, legislative and judicial functions of government are dominated by one political party, where political agendas can dominate bureaucratic functions and where information usually serves political goals, very large amounts of data are collected and stored by government institutions. Getting background information about a prospective business partner in China is reasonably simple stuff. But being aware of this fact and getting to that first step can be tough, and the potential for confusion is enormous.

Millions of dollars can, and have, been thrown away on ill-fated investments in China undertaken with the wrong partner. The gulf between what people say will happen, and what does happen, as well as between rules, laws and practice is often wide enough that the new investor is forced to rely on outside advice as to the risks and pitfalls of investment in the mainland.