In Regulations in China: Are You Prepared? Are You Ready? Are You OK? [link no longer exists] the All Roads Lead to China Blog writes how the Chinese government makes its laws with its own populace in mind, not out of consideration for foreign companies:
There is and has been a sense of entitlement in the foreign community about their contribution to China and its economy. Too many foreigners seem to believe that without them China would flush down the drain. Even if true, that does not mean China either should or does just bend over to the interests of foreign parties. China has 1.4 billion people it needs to manage and at all times that trumps anything else.
This is absolutely true and this really ought to be obvious, but it is not. Our China lawyers constantly hear from foreign businesses complaining about this or that Chinese law and then stating that China just does not understand what its laws do to foreign business. The Chinese government does understand, but foreign businesses — especially those smaller than Intel, Caterpillar and Coca-Cola — are just not one of its top priorities chief.
If you are a foreign companies doing business in China you should keep their ears to the ground regarding upcoming laws that might affect your business. Unfortunately, sometimes this works and sometimes it does not, as there have definitely been times in China where laws or regulations have come into existence without any real warning.
No matter what you do, China is not without its legal risks. For more on handling China’s ever changing legal regime, check out China Law As Guessing Game.