After months of spouting denials that the products it exports are as shoddy, faulty, or lethal as the collapse, recalls, or deaths they caused seemed to indicate, China has taken a new posture in its drive to continue growing in the world economy. It executed the former head of its food and drug agency for taking bribes to speed drug approvals. If this was meant to reassure the West that it is serious about being a world player, it may have the exact opposite effect.
Whether it was lead paint on Thomas the Tank Engine toys sold by RC2
Where certain service industries have become the darling of investors -- Internet portal Sina
The execution of a chief regulator is therefore supposed to calm the jitters. For me, it is unnerving. When the punishment is all out of proportion to the crime -- and certainly the bribery should have been dealt with harshly -- that puts a damper on anyone wanting to expose more crime. Sure and swift justice is often a much better deterrent than severity.
Some commentators feel the execution was not aimed at Western audiences at all, but rather to the Chinese themselves. The ruling Communist Party is intent on showing the people it is concerned about their health and well-being and won't tolerate its growth plans being interrupted.
Maybe. Yet the government seems more concerned with ensuring that it can still earn a profit without giving up much in the way of control. It will continue to interfere with trade where it sees fit, such as when it imposed new rules on the collection of fees in its telecom industry, sought to rein in virtual rewards for online video game play, and limited the proliferation of Internet cafes.
For investors, the worldwide marketplace remains a lucrative place to seek out profitable ventures. Only a xenophobe would fail to look beyond U.S. borders for investment ideas. At the very least he or she would be missing out on a great many opportunities that present themselves in emerging economies like India, and yes, even China.
Yet despite such opportunities, investors need to remain wary. Accounting differences might lead to misunderstandings, and corporate governance is often opaque rather than transparent. In France, for instance, shareholder disclosure rules are far less welcoming than here at home, but that doesn't mean an investor should not explore the possibilities of an investment in utility giant and Motley Fool Global Gains recommendation Suez
China has its enterprises as well that deserve further research. Despite the meddling mentioned earlier, China's largest mobile telecom operator, China Mobile
It's just that it shouldn't take executing white-collar criminals to put you at ease in executing your investment plan.
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