Regarding the International Herald Tribune article called “required reading” by some sites out there, Shanghaiist has one word: Duh. That, and please stop already with the cutesy movie-reference titles — “Crouching corruption, hidden fraud” — there’s nothing hidden or crouching about fraud and corruption in China. But here it is one more time for good measure:
Despite the frequent lip service paid to the need for caution when investing in China, it is clear that many are still not careful enough.
… While the optimists are right that China presents great opportunities despite its problems, anyone can get burned when optimism gets out of hand.
Another problem is that performing a risk/return analysis in the Chinese business environment often shows that the risks are impossible to ascertain while the possibilities for return seem boundless. Many investors just decide to not think about it and others get completely caught up in the returns.
And whose fault is that? Maybe Shanghaiist’s day job makes all of China’s rampant corruption and fraud problems particularly obvious. But that’s still no excuse for people blindly throwing millions of dollars into China when there are too many stories out there like this, this, this, this, this, this, this, this, this, this, this, this, this …
Image from CNN.