Got a great email the other day from a veteran China lawyer — someone who has spent half his life living and working in China. Here goes:
I read your posts on not getting arrested in China and I wanted to give you a few of my thoughts on that.
1. It is pretty strange to have to write a post that says: you as a foreigner are required to comply with Chinese law. But I understand there are still some “old China hands” who will tell you to just ignore Chinese law. So your statement is required. You and I both know though that even most of these people no longer believe it. I had someone tell me the other day that he always encourages his clients to avoid lawyers “because the more they spend on lawyers the less they have to spend on me.”
2. Here is an important point I find I often have to drill into people’s heads here. In the U.S or the EU or pretty much any country with a well developed legal system, if you are hired by a properly registered company, you can assume that company will follow the various laws. You can assume that because the penalties for not doing so are so extreme it is only the shiftiest of companies that do not. In China, it is truly the opposite, at least when it comes to hiring foreigners as employees. Here you should assume the company will not follow Chinese law. Paradoxically, it is the foreigner (not their Chinese employer) who usually gets in trouble over this. Any foreigner who comes to China to work without making double-sure what they are doing is 100% kosher is asking for trouble.
3. In the U.S. or the EU if you hire an accountant or a bookkeeper, you can assume that professional will instruct you on how to pay all your taxes and on how to follow all applicable laws. In China, if you hire a local professional (including many local lawyers as well), you cannot assume that person will advise you to follow Chinese law. Often they will instead advise you on how to violate Chinese law by telling you that “no one actually follows this law or pays those taxes.”
It is no wonder so many foreigners get into criminal trouble in China. The problem is that until around ten years ago, the “don’t worry about the laws” statements were pretty much true and those statements are still in many cases true for Chinese companies and for Chinese nationals, But foreigners are in a different category and they have to have a different attitude.
Despite the recent number of high profile arrests, you and I both know that 99+ percent of the time when a foreigner gets arrested in China it is for actually violating the law. I mention this because the last thing I want people to believe is that following the law does not matter in China either because doing so is not necessary or because they will get arrested anyway because China has gotten so out of control of late. As I believe you wrote somewhere, the important thing is not to act in such a way as to make it easy for the Chinese authorities to arrest and convict you. It is still the case that if you do that, you will almost certainly be fine.