Though there is a particularly difficult political system and a failing legal system, businesses are still investing in China.
Ease of globalization has encouraged the growth of many MNEs, and China offers a massive market with great potential. Abstruse standards make business difficult, but their country is rich with human resource and the investment environment is improving.
The Chinese political system inflicts adversities while their legal system remains loose and inactive. Political freedoms often dictate the validity ascribed to the rule of law. And therefore, international business activities are dependent upon on the political system determines their rights to make operational and investment decisions. All business activities become contingent upon these political freedoms that are determined by the political system. In China, the political system does not carry the rule of law; rather, the rule of man triumphs over legal authority.
The bureaucracy system that does exist is muddled with agendas arbitrary to common law. China’s laws are not founded on practicality, and justice has shown to be the matter of man rather than the province of a strict legal system. Given this, the political ideology of China is transforming. China has shown to successfully implement liberal economics. This is much different than the democracy seen in the United States. China has shown exponential improvements through its economic growth and development, leveraging national trade and liberal economics. This does not, however, negate the sluggishness of their legal tradition.
The future success of international business in China centers on the improvements of the legislative gap and advances on stronger protection.
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