I’ve heard that China is “very development” these days. Also that Chinese people are “very diligent”. And that the country is “strongly economy”. The Chinese, I’m told, work hard and well and that “harmoniusness” is a value that is treasured here. Everything, it seems, is “getting good and good”.

It’s certainly true that this is the best place in the world for a foreign investor to put his money, and there are a dazzling variety of ways in which to do it. WOFE’s, JV’s, Rep Offices… China certainly does go far out of it’s way to make you and your money welcome.

But only until you have arrived, because after that it all turns to ashes.

Take for example the diligent local employee. They might be working on an assembly line, or they may be your receptionist. They could be your driver. Whatever role you have employed them in, however, there are a few things that are a near-certainty:

– They will be stealing from you, and I don’t just mean paperclips. Your inventory will be sold out the back door, and you’ll never even know it. Your assets will be sold out the front door, but you’ll never see it go. Your customers will be diverted towards local competitors, your orders will suffer the same fate. Your suppliers will not deliver what you want, when you want, or how you want, but they will deliver your orders to the parallel company your workers have set up. The information in your computer will be stolen within minutes of it being made available to anyone, though it may take them longer to steal it if they have to work for it. The ways in which you will be robbed and cheated are legion, the only thing that is certain is that the first you hear of it will be when your cheques bounce because someone finally went after the bank accounts. Your accountant will be helping with this, if the bank manager isn’t.

– Don’t think you can detect it all, because you can’t. The only thing you can say with certainty is that if you can’t catch them cheating you, then you aren’t looking hard enough. And if you can catch them with their digits in the till, then start worrying about the ones you haven’t caught yet. I’ve lost count of the naive laowai’s who thought they had good employees, only to find out the hard way that bankruptcy was just around the corner.

– Don’t think you can sack ’em if you catch ’em. To start with, you’ll be paying massive compensation claims, and nothing you can say or do will change that. A year’s salary as compensation is routine when you fire someone who was caught thieving from you. Getting caught is a bonus for these people, because that way they catch you coming and going. And even after they are gone, they will bring trouble to you – having a hundred peasant scum turn up at your office or factory in order to intimidate you is far from uncommon, and remember every one of those tyre-kickers is a tea-leaf in addition to being an agitator.

– You can sometimes see justice done via an unexpected yet fortuitous accident, of course. But to be certain that justice was done fairly, it would mean every employee was in hospital, and then you’d get nothing done.

And how about that great economy, huh? Wow, just imagine if every person in China bought just one of your widgets, or whatever you do.

– Well, forget about it. With very few exceptions, the Chinese won’t buy your widgets. Some can’t because the Communist Party steal all their money before they get a chance to spend it. Others won’t buy it because they are boycotting whichever country the Party has decided to hate this month. Some would if they could, but then decide that the locally produced fakes will do the job nicely, thanks. Mostly, the remainder will just steal it from you directly, which brings us back to your employees and their own distribution network.

– If you are in that tiny minority of companies that have not only made some money here, but also managed to keep it from being pilfered by the locals, then congratulations. Enjoy it in whichever manner you choose, as long as it’s inside China. Because getting your money out is a bloody sight harder than getting it in. The entire system is geared to take your money, your talent, your skills, and your knowledge, but the whole point is that you’ll be lucky to get away with the shirt on your back. Deng Xiaoping was a smart cookie, and one of the most unscrupulous and cowardly bastards of the 20th Century – and the latest crop of murdering thugs who run the joint are even worse. They don’t allow you here because it’s good for you, they allow you here because they want what you have. And the WTO be damned.

– Oh, and don’t think that importing your foreign goods is much use, because it isn’t. China is in the business of exporting goods and importing payments, not the other way around. Expect inward-bound shipments to be held up in port for months, banned outright, caught up in paperwork forever, or simply stolen by the Red Army. I know of shipments that were held up during the 2008 Olympics on the basis of ‘security inspections’, that have still not been released. About the only things you can import, in fact, are things like five-axis milling machines, and we all know why that is (if you don’t, Google it).

So folks here it is, MyLaowai’s recommendation to would-be investors in this marketplace:

Just say no. No matter how good it all looks, it isn’t. Sure, I’m here myself, and many of my friends are too. And I suppose that it is just possible that you can make a go of it yourself. But remember that for every one who succeeds, hundreds will fail, and fail big. The only thing in your favour is that there are a few people here, people who know these vermin for what they are, who might be able to help you. Find one or two of us, buy us a drink, and pay close attention to the advice you are given – it might be the cheapest and best advice you ever receive, and it just might save both you and your company from ruin.

In other news, I just received a phone call from a guy I met in a bar a few years ago, the day after he’d arrived in China as it happens. He called me to say that the advice I gave him that night and several times afterwards had saved him and his company, and that he’d like to buy me another drink on the anniversary of that first chance encounter.

It’s not always nice being right about these things, but it sure beats being wrong.

Have a nice day, y’all.