China has 1.4 billion people. There are many that will follow a contract or work with you to adjust agreements to both parties' mutual benefit.
If you are leveraging guanxi, ask yourself why you feel it is ok to further empower a person that is causing harm to society. There are many in China that do represent your values. When you engage in guanxi, you are "feeding the dragon": empowering the wrong people and dis-empowering the right people.
note: when I say "you", I don't mean you personally.
So much easier.
Yet so much harder.
But that's China ;)
Having said that, after navigating those waters for awhile, I enjoy dealing with a clear legal framework, laws that are more often than not applied uniformly, and a government that doesn't stifle the free exchange of ideas on the internet to such a point that you need a pretty beefy VPN solution just to do a Google search.
Just my opinion though, good to hear you have been successful in your work - good luck and keep on trucking!
I see too many Western news articles on China that present an us versus them attitude. Its unhealthy as commentary (if not the articles themselves) often contain undercurrents or direct statements of nationalism/racism.
In my experience trustworthy and competent employees are not any more difficult to find in China as the U.S. It does take work (and the frustrations stem from different places) but not in aggregate harder than in the U.S. Never had a bad employee in China. Never had to fire someone. Never had to discipline someone. I followed our written labor contracts and so did they.
As to people not following a written contract. It is true that you need to choose your partners carefully and manage your relationship as a written contract can often be ignored. That said, in ten years of running companies in Shanghai, every landlord I had for home and office was meticulous about following the contract. Never had a problem. I only spent four years in Chengdu and had fewer home and office leases but again, no problems.
If people invest money they shouldn't, without due diligence in environments they don't understand with partners they don't know, that doesn't reflect as much on the environment as the investor.
China is very welcoming to foreign investment. Once you have done the paperwork, you can basically stay indefinitely on a work-related visa for a small minimum investment. The total required money in real terms was only 30,000USD a few years ago. I'd be interested to hear if there's any another country with such a dynamic economy and physically safe environment, great food and range of climatic conditions that welcomes people from around the world for such a small personal investment? Sure, China has its issues, many of which such as an immature and ill-documented financial system, utility issues, poor internet connectivity and a weak courts system affect business, but openness to investment is not one of them.
There is no distinction made in the article between the WFOE ("woofie") or wholly foreign-owned enterprise and the JV or joint venture. Instead, an alarmist view is painted of total ruin lurking around the corner for all foreign-involved businesses. (The sums I refer to above are for a personal WFOE: no need for a local partner.)
Everybody knows the courts are oversubscribed, slow and corrupt. This results in different ways to solve problems, including less willingness to extend trust to strangers, the frequent writing off of bad debt, and in some rare situations corrupt regulator-based vindictive ingress, violence, kidnapping and so forth. (Most of the time things are not ugly though, and incidence of violence is extremely low across all of society, not just business. Much lower than the west in my experience.) Because of this situation with the courts, very often contracts are worthless (simply ignored). Cash is king. If you don't trust an employee (eg. sales manager who stole USD$60k in the text), don't give them access to funds. This is business 101, and is in no way unique to China. Why should a Sales Manager control your bank account, anyway? Why should you allow client payment direct to untrusted employees by theft-prone cash? This is just an example of management naivety - no inkling of common sense.
While I am still sometimes amazed at the uselessness of contracts here (I've experienced the "signed the contract? paid the rent? now pay double!" thing personally... solved with a mutually acceptable outcome - I moved out quickly and received a full refund), mostly it's just about learning how to deal with an unfamiliar business environment.
Overheads are often low, potential profits are often large, and we're allowed to come here and do business despite being foreigners. It's not always a walk in the park (frustration and "bad China days" are certain), but overall China's environment is not bad. Given the low regulatory threshold, taxation and overheads, it's really more of a land of opportunity than the west. In a western context, I never could have afforded myself the experience in business that China gave me.