Smaller Overseas Entrepreneurs Find China Too Frustrating

Re:Smaller Overseas Entrepreneurs Find China Too Frustrating by HillRat on Saturday November 07, 2015 @03:56PM (#10526196)

It seems very similar to experiences I've heard about from friends running businesses in Russia and, to a lesser degree, in Mexico (where your business partners are more reliable but the government is horribly corrupt and obstructionist). One rule of thumb I was told regarding the early days in post-Soviet Russia was that you were either going to pay the mobsters a quarter of your revenue or the FSK a third, and that was before Americans started getting killed. (Whatever I think of Putin and the deep-state security cabal running things over there, it is still less chaotic than the Yeltisn days.)

In general, I think anywhere the rule of law lays lightly, this is the norm. Employees are at the mercy of powerful employers, so they learn to take advantage of the system. When foreigners (or idealistic locals) go into business, they find themselves contending with behaviors meant to deal with abusive employers in the absence of an impartial judiciary (this is the same China that lets the wealthy hire people to serve prison time for them, after all). In general, it's just not worth the effort until Beijing's reforms start producing real effects.

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Re:Smaller Overseas Entrepreneurs Find China Too Frustrating by seanmcdirmid on Saturday November 07, 2015 @06:09PM (#10526591)

And if you are American, you are completely bound by the Foreign Corrupt Practices Act, so you can't even bribe that mobster or official. Your rule book is going to be different.

Foreigners really shouldn't be starting businesses in China, the rules (or lack of them) are just not in your favor.

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[deleted]

Re:Smaller Overseas Entrepreneurs Find China Too Frustrating by seanmcdirmid on Saturday November 07, 2015 @09:38PM (#10527182)

Working for a large American company in China, our company takes FCPA (and anti-corruption in general) very very seriously. We also emphasize non-retaliation in reporting compliance issues.

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Re:Smaller Overseas Entrepreneurs Find China Too Frustrating by mahyarm on Sunday November 08, 2015 @01:05AM (#10527717)

The funny thing about the FCPA is it doesn't apply in the foreign -> USA or USA -> USA interactions, only with USA -> foreign interactions as far as I can tell. Foreign and american organizations can do actions that would be illegal in the FCPA itself with the american government. It's pretty funny.

Like a Canadian oil organization can pay huge speaking fees to an American politician and then start getting favorable treatment in the USA. But if an American oil organization started paying huge speaking fees to a Canadian politician and then start getting favorable treatment in Canada, they would probably have a winnable FCPA liability against them.

Either that or the american politician makes sure the law doesn't get enforced in that case.

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Re:Smaller Overseas Entrepreneurs Find China Too Frustrating by dogma1138 on Saturday November 07, 2015 @07:40PM (#10526855)

Considering where US companies operate especially in the Energy sector they probably found a 1000 different ways to "legally" pay bribes without violating the FCP or any other similar legislation.

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Re:Smaller Overseas Entrepreneurs Find China Too Frustrating by seanmcdirmid on Saturday November 07, 2015 @07:47PM (#10526872)

Not really, you'll get caught eventually, especially in the energy sector; e.g. Triton Energy. It is an incredibly effective piece of legislation, Jimmy Carter and company really gave us something that would benefit the world (you can't just say "this is how they do it here so this is what I do").

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Re:Smaller Overseas Entrepreneurs Find China Too Frustrating by TeMPOraL on Saturday November 07, 2015 @08:07PM (#10526925)

It might be benefiting the world in a way already - those who want western businesses in their area may decide to not require them to bribe so hard.

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Re:Smaller Overseas Entrepreneurs Find China Too Frustrating by seanmcdirmid on Saturday November 07, 2015 @09:34PM (#10527161)

Or you know, if you want western capital, clean up your government.

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Re:Smaller Overseas Entrepreneurs Find China Too Frustrating by mahyarm on Sunday November 08, 2015 @01:15AM (#10527736)

They can also make it official law. It's not illegal under the FCPA to pay official rush fees, just the unofficial ones.

So in corrupt government X, you make a special western investment tax. The funds of that tax goes to a special fund used for development projects. Those development projects have to go through a convoluted procurement process, which co-incidentally only gets approved with a few politician's organizations. Those organizations then go on those make-work projects, and siphon off a lot of funds and never get them done. The make work projects also help them get re-elected because they create 'jobs'.

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