Friday, October 24, 2014

WILL CHINA'S PROFESSED NEW ADHERENCE TO THE RULE OF LAW CHANGE COUNTRY RISK ?

The Government of China has announced what it asserts are new procedures designed to implement the Rule of Law in Chinese courts, which are notorious for bowing to the direction of powerful PEPs, who often direct the judges to enter rulings favorable to their interests, and contrary to both the evidence and the law.

A word of advice: don't reduce your Country Risk assessment for China just yet, for the entrenched Communist Party, and the corrupt senior officials who run China, are not so easily removed from their position of influence. Should there be actual reform, and it shows up in court decisions that actually apply the Rule of Law, we will know that soon enough, but meanwhile Country Risk for foreign companies operating in China must remain elevated. So long as foreign corporations do not get a fair shake in Chinese courts, risk levels must remain elevated.


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