Is China's Legal System Reliable?

Often, one of the top concerns of many business investors who are considering going into the Chinese market is if they are protected while doing business in China. While China's legal system is far from perfect, however, the progress is comforting to many. The following are inserts from an article published by the New York Post (for full article click here).

When President Obama arrives for his first China trip, he will find a country with a legal system vastly improved from a generation ago, particularly in the area of business law. And when it comes to dealing with China, as American businesses know, confidence in commitment to legal obligations is critical in giving assurances that business can be carried out effectively. For the United States, it provides a bilateral and multilateral negotiation framework.

At the provincial and city levels, out of sight of the country’s central leadership, legal enforcement remains unreliable. There are strong indications that enforcement of laws related to the environment and corruption is uneven and subject to favoritism. Yet even here, China has made progress. For example, the major western city of Chongqing is in the midst of broad corruption sweeps to clean up organized crime, providing a more stable civil and business environment.

Evidence that China has benefited from an increasingly robust legal framework is clear. China’s rapid economic development has stemmed both from relaxing state control over the economy and also its move toward a law-based society.