For proof, consider the fate of the 20 foreign companies that recently registered to attend the auction of 35 Chinese dotcoms. With cross-border bidders excluded, only one of the 35 Web sites was auctioned off. What is legal today may be illegal tomorrow. As soon as you cope with one set of regulations, another set of regulations appears. Pig in a Poke Doing due diligence for a potential investment in China can be tricky.
Chinese managers are big on touting their guanxi, or political connections.
Passing the Buck on Inspections. Potential mainland partners often offer to hire local Chinese research institutes to perform site inspections. Not Checking Titles Thoroughly. At best, establishing land-use rights in China is complicated. You don't want to know the worst.