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China Whets Its Enforcement Appetite

Richard Meyer | January 12, 2009

For most of the last decade, China seemed to take a light approach on regulatory enforcement; it worried that strict application of its many laws, rules, and regulations would scare off investors when the economy could not afford to lose foreign money and manufacturing.

Now signs are emerging that the days of benign neglect are ending. The government is cracking down on violators of existing regulations, issuing new guidelines and circulars to enhance what’s already on the books, and passing new, tougher legislation.


Lane

“Local laws are being stepped up,” says Scott Lane, CEO of the Red Flag Group, a governance, risk, and compliance advisory firm based in Hong Kong. “They are increasing in number and are being enforced.”

Companies have faced this before. China periodically improves enforcement, only to back off when the pain of its...

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