China Business Law

Sometimes I feel lawyers enjoy making laws so complex that normal people have to get help from lawyers to survive the business world. If our legal system can improve like operating system, we can all handle our legal issues and make fun of lawyers.
But let's face the real world, you got to understand the local law to do business there. In China, the legal system is rather confusing. There are so many regulations, laws, guidelines. You would have no time to do business if you decide to figure them all out by yourself. And even if you figure out what the text mean, you still don't have clear image of what you can do because the big words are sneaky. When you have to deal with laws, you need professional help.

A friend was telling me a story early today, which reminds me again how important to have professional advice available to make big moves. An American company was in a join venture deal with a private company in China. This American company planned to buy 51% of this Chinese factory. The negotiation did not take long and both sides agreed on a deal. As part of the deal, this American company wired two million US dollars to this Chinese company for the 51% share before they found out the deal was not valid without local authority's approval. Now the money is in Chinese factory's account and the deal can not proceed.
It is amazing that someone would jump into a deal like this without professional accounting and legal advisers in his team. But these things happen. Maybe it is not a problem in the US. And the assumption that things work in your own country will work all over the world is dangerous.