Why business in China differs from Russia - Arthur Kroeber

Arthur Kroeber by Fantake via Flickr

The world might have feared China was following Russian style of business when it arrested Rio Tinto executives on state-security charges in Shanghai on July 5, writes Arthur Kroeber today in the Financial Times.

By Russia, we mean a country in which ordinary commercial negotiations are routinely subject to interference by state security forces, where foreign companies face constant risk of arbitrary abrogation of contracts and expropriation of assets, and business executives quite rationally fear for their liberty and occasionally their lives.

Fortunately, it appears that a lot of people within the Chinese government were asking exactly the same question, and desperately trying to convince their superiors that the correct answer ought to be “No.”

But it has been a narrow escape, now the Rio Tinto suspects will no longer face a trial for breaking state security but commercial laws, with more lenient punishments. But, warns Kroeber: "China isn’t Russia - but it isn’t yet a modern country either.'

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Arthur Kroeber is a speaker at the China Speakers Bureau. When you need him at your conference, do get in touch.

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