Corporate counsel in China: Tap dancing in a mine field? Michael Sylvester

This quick post is aimed at those of us who are providing guidance as corporate / in house counsel for our multinational clients operating here in Mainland China.
 
In Mainland China, as in the West, corporate or in house counsel are charged with evaluating a proposed or actual course of conduct of their client, generally in the form of Board reports on where to draw the line between permissible and impermissible activity and risk / reward scenarios. For example, we have all heard the oft asked question, what is the downside if we get caught?
 
So, we advise what should be done and then, quite often, are overruled by the Board that chooses to carry forward some questionalbe course of conduct because of how it impacts the bottom line. And damn if that whole attorney client privilege thing prevents us from doing much other than putting our hands in our pockets and looking at our shoes as it all happens.
 
And compounding this is a perception of a lack of rules here, or in some cases a historical lack of enforecment provisions that people have, for too long, counted on.  Most likely this is due to a socially acceptable strategy supported by long term ex-patriot employees and/or management level Chinese staff.  What strategy is that?  Well, it might be summed up in a 'no news is good news' mindset.
 
If the police are not knocking on the door or have siezed your bank accounts, many long term operations here just roll with the punches and ingore the underlying reality that there are laws and rules here that are not being followed.  But, just because you have not gotten caught yet does not mean your chosen course of conduct is acceptable.  It just means you have not been caught yet.
 
China is starting to enforce their own laws as quiclky as they are pushing steel and glass into they sky.  Pay attention people.  The day of hidden laws where it was common for China to refuse to give us access to the text of a ruling against is are over.  
 
There is almost never a time when there is not a clear answer anymore.  If anyone tells you the law is too muddy and there is no certainly here in China, you have probably been asking the wrong person the wrong question...
 
Hope (as in hoping you do not get caught) is not an investment strategy...