Have you experienced law enforcement and courts in China? I have on several occasions. As well as the U.S.. I lived in Shanghai 10 years. I'm in the U.S. right now with my Chinese wife. My experiences in Shanghai court and with Shanghai police were more fair and congenial than in the U.S. My wife and I were at the county courthouse (U.S.) a week ago and we talked a bit about the flow of a court proceeding. Somewhere in the middle of my description she stopped me and said "You mean the judge takes the word of the police with no hard evidence over the word of the defendant?". Even further, in the U.S., the police usually make some sort of determination of what happened or who is at fault in disputes. This bias carries over into legal proceedings. Not so in Shanghai. The police only take witness reports exactly as stated and provide notarization and copies of the reports to the parties.

Running an Internet business in China is not impossible. I ran and helped others run them for 10 years. The Internet censoring can be a problem at times but is not a top factor in your success or failure as a business.

I've stayed out of this till now; but feel I have to add something here.

I worked for a client in Shanghai to clear him of Fraud allegations (just to get it out of the way; he was beyond clearly innocent - competitors had planted "evidence" and reported him). One of the most memorable things he said (and I feel this sums up Chinese hierarchy to a tee) was:

The legal system here is absolutely great. It's when they decide not to use it that things get dicey

Apologies if my previous post implied China law and justice was better than the U.S. The two systems aren't easily compared. I was attempting to provide a counterbalance to my parent post's hyperbola. [ADDED]: I should not have said the China system is more fair and congenial than the U.S. What I should have said is I was disarmed by how fair it was compared to what I was prepared to experience based on my prejudice.

As to what your client went through...all I can say is there are bad people everywhere. Rule #1 for me in China is "Don't do business with shady people or in market segments dominated by shady people". I think you can apply this rule anywhere.

Not in quite the same way. Because all you need to do is compete with a local firm too well, or piss off the wrong person, or cause problems by not working in the accepted way.

There's the crucial difference I feel.

(though on the other hand it's not as bad a picture as some people like to paint. You just have to be sensible and keep your head down)

I gave that example because the entrepreneur it writes about was a foreigner visiting the US with a business outside of the US where his activities were legal.

Indeed, but it's still within the confines of the rule of law. He could have avoided this unhappy conclusion by either not accepting business from the US that is illegal here or never stepping foot in the US.

Heck, he could have joined Antigua in bringing this before the WTO in 2003: http://www.antiguawto.com/WTODispPg.html

The law was published, well publicized and I find it very difficult to believe he didn't know or ever question why 98% of his business was as a result of it. That's different in nature from web sites steadily disappearing due to the Great Firewall of China. You could of course assume that any access you have to the outside will disappear some day, but you then wouldn't build a business that is based on international Internet access.

If it is legal to smoke pot in Amsterdam, but illegal to do it in the US would you consider it ok for US law enforcement to jail visitors that have smoked pot in Amsterdam, or sold pot to United States citizens?

I don't believe this has anything to do with what you or I think is OK, I think it has to do with the rule of law and how that helps or hinders businesses.

Having reasonably clear constitutions (big C and small c), laws and rules allows one to plan for the future and focus on serving customers and the like instead of worrying if the state will inadvertently shut you down (I assume we're both assuming that what the poster is trying to do as a business is not against PRC state policy, it's just collateral damage).

For the most part all of the traffic blocked by the 'great firewall' of China is collateral damage. And that's exactly the problem.

The human right violations in China notwithstanding the majority of the people there have roughly the same ability to plan their lives and the future ahead of them as a person in the US would.

It's just that instead of relying on laws and judges they rely on corruption to stay out of trouble.

China is slowly improving in this respect, the laws are applied more consistently and corruption is slowly reduced in the eye of the public as the means to a way to deal with authorities.

It will take at least another lifetime, or maybe longer, after all it took a long time to mess it up so it will take a long time to repair it.

But anybody that is seriously comparing the situation in China today with 1989 is really out of touch with what is happening in China.

The Chinese government is caught between a rock and a hard place too, they have serious problems of their own making that they can not repair easily without risking a Soviet style melt down. Their information policies are an exponent of an older faction in their government that wants to go back to the past or at a minimum freeze the situation as it is today. But the seeds of market forces have been planted and there really is no reversing the trend.

Compare with the RIAA in the United States for a good analogy, their 'business model' is mostly dead but they're holding on for dear life and using every trick in the book to make it last as long as they can.

Eventually, they will lose, and the trend is irreversible, the people in China will never give up the rights they've gained in the last 20 years.

Thanks for the insightful posts. I'm just curious as to the "older faction" within the government you pointed out, any idea as to their age, or how long they are likely to remain in power? Do you think there will be a succession of their ideologies or will they be buried together?

Sorry if the question sounds kinda narrow, but it seems like a bottleneck to a lot of problems. In my limited knowledge of Chinese politics from surfing, it seems that the faction of engineers among the newer generation of Chinese politicians happen to be quite enlightened, though they have to compete with the children of the previous communist leaders who came to power through nepotism.

It just reminds me of the whole thing Europe had to go through not so long ago.

This is the fringe of my knowledge on China so please factcheck.

When Mao Zedong died in '76 he left behind a mixed bag of good and bad, he managed to keep China together in spite of serious internal pressures between ethnic groups, but in the process killed millions (some estimates run as high as 80 million people) and left behind a country that was on the brink of economic collapse.

After Deng Xiaoping took over the focus became the economy, less the ideology, which I think was more seen as a way to remain in power, rather than as a real guide to how to run the country. The 'party' became a device rather than a place for true believers.

Over the last 30 years then, slowly but surely Chinese officials have tried to both hold on to their power while staving off a revolution of a dissatisfied populace by giving them access to elements of the 'free market' in a piece-meal fashion.

The real benefit of this gradual release has been that a Soviet style implosion was avoided, the downside is that many of the old power structures remain, and that corruption is, in spite of a serious effort to combat it still a huge problem.

The ruling class in China is limited to a relatively small group of people (as compared to the size of the Chinese population), not unlike the Bush and Kennedy families in the United States, only without the nicety of a public election.

One of the reasons why I think Chinese people in power are so scared of all this communications power their underlings have is that it would allow them to effectively organize a protest that could not be struck down so easily.

Every so many years the 'old guard' dies off and has to be replaced by new people, and - surprise, surprise - these tend to be family members of the previous old guard, who apparently are the only Chinese people that are able to govern this country. It's a dynasty in anything but name.

The nepotism you allude to is alive and well at the highest levels, but below there is slowly a real change of the guard happening, and these people are not satisfied with being relegated to just being 'implementors', they want real power.

And they'll sooner or later get it, but I don't know if that's on a timescale of 20 years or 100's of years.

All that's needed for that to happen is a connection between the potential mob and the higher cadre of the government below they dynasty figures, and the thing that holds it off is gradual economic reform. If they manage to turn China around to the point where the economy is strong enough that a large majority of the Chinese populace is satisfied with their lot it will remain a peaceful transition and those that brokered it will probably remain in power for a long time.

If they mess up, if China gets hit by a severe economic crisis or if they overplay their hand then all bets are off.

It sounds like you are quite enamored with U.S. justice. I'm guessing you've never been arrested and put through the system.

From this post, you are indicating that if the law is published and clear, then its ok? I've found it very easy to understand Chinese laws. What's your point?

Perhaps some web sites are being blocked as a competitive measure. Are you saying a country and government must engage in free and open trade? What if they choose to play the international trade game different?