The China I Knew, the China That Is, and the China Yet to Come
In 2000, if you were doing business in China, survival—let alone success—required being there. In person. In the factories. In the boardrooms. Because if you weren't, your competitors were. China was booming, changing by the day, and for foreign companies in China, not being on the ground meant missing too much of the plot.
I made trip after trip to Shanghai, Beijing, and the industrial heartlands—not because I had to, but because being physically present was the only way to truly grasp what was unfolding.
Even though my firm had attorneys in China—mostly based in Shanghai—I felt compelled to witness the changes firsthand, to meet our clients face-to-face, and to build the kind of trust that only comes with boots on the ground. That was the China of growth, of energy, of chaos and possibility.
But even before COVID, that era was already fading. When the pandemic hit, it disappeared entirely. Travel restrictions, policy volatility, and an increasingly hostile environment for foreign businesses accelerated an exodus that was already well underway.
Today, virtually all of our China clients operate from outside the country—mostly in North and South America, Europe, and Australasia. Those still on the ground fully understand why I now prefer to manage China matters from afar—and why I'd rather vacation in Europe or Latin America than set foot there again. I have no plans to return to China unless and until it undergoes serious political change.
Still, I miss the China that was.
The China of 2010: Why It Was Easy to Love
Ask anyone who lived in China during its "golden growth" years, and you'll hear familiar themes: the energy, the opportunities, the sense that the future was being built right before your eyes. Cities like Shanghai were vibrant, modern, and full of promise. Foreigners were welcomed as partners, teachers, and investors. Deals flowed, factories thrived, and innovation blossomed—always with a distinctly Chinese twist.
Of course, there was plenty to complain about. That was part of the charm. Expat gripe sessions were practically a ritual, usually ending with a wry smile and the all-purpose shrug: "This is China."
That era of possibility came with complications, of course—complications that would eventually overwhelm the promise.
A recent interview I watched brought it all back. It reminded me just how wild—and instructive—those days really were.
"I Saw the Craziest Things in China"
Just today, a British lawyer friend of mine from my China days sent me a YouTube clip from the Shawn Ryan Show, featuring former World Bank Director Erik Bethel recounting his experiences in China. The title of this clip is "World Bank Director: 'I Saw the Craziest Things in China'" and it's not an exaggeration.
In the interview, Bethel describes a string of jaw-dropping incidents—stolen IP, sabotaged computers, rigged negotiations, poisoned baby formula, and high-pressure signing ceremonies engineered to bulldoze foreign investors through symbolism and face-saving theatrics.
As I listened, I was struck by how many of his stories mirrored things I've witnessed firsthand—sometimes almost word for word.
Let me unpack a few of those tales—and share my own parallel stories.
1. The JV Theft of General Motors' Technology
Bethel recounts how a Chinese joint venture partner of General Motors allegedly stole the designs for the Chevy Spark and used them to create the eerily named "Chery" automobile—right down to the rivets. This wasn't rumor. It was corporate espionage hiding in plain sight.
So how does IP theft through joint ventures happen in China? It's almost textbook. A foreign company confidently shares designs and technology with its Chinese JV partner, only to later discover that same partner manufacturing a strikingly similar product—often in direct competition—using the very IP that was supposed to remain protected. It's a scenario we've seen play out far too often.
One example (of many): a pet products company contacted us after entering into a joint venture in China six years prior. The deal was to manufacture and sell one of their products within China. The Chinese side handled production and sales but kept the American company in the dark—insisting the JV was losing money. The American partner never saw a cent and, over time, had essentially written the whole thing off.
That is, until they discovered their exact product being sold into the U.S. market—for half the price they charged, and for less than it cost to make.
2. The Vanishing Hard Drive Incident
A visiting U.S. tech executive plugged his laptop into the Ethernet at his Chinese hotel. Moments later, the device was fried and the hard drive completely wiped. His IP was gone—extracted by unknown parties with chilling ease.
Incidents like this highlight the pervasive risk of digital intellectual property theft in China. And while the story is unsettling, it didn't surprise me in the least.
One of our clients had a nearly identical experience—this time at a trade show. During what should have been a routine meeting with a "potential distributor," their proprietary product specs disappeared. Just a few weeks later, a suspiciously identical product appeared online, made in Shenzhen and priced 30% lower.
This kind of quiet IP extraction—through tech or trust—isn't an outlier. It's a pattern, and the only reason it's become less common is because it's become less common for executives to go to China.
3. The Melamine Milk Scandal
Bethel recalls hauling suitcases full of American baby formula back to China because his wife refused to buy local brands. Her reason? Chinese baby milk producers had been adding melamine—a toxic plastic—to formula to artificially boost protein readings. Thousands of children were poisoned.
This scandal illustrates a deeper risk: the very real dangers around product safety and regulatory compliance in China. Local partners may cut corners on ingredients or manufacturing processes, creating public health crises—and devastating PR disasters—for the foreign brands attached to them.
My law firm has been involved in multiple similar cases. Most were small enough to stay out of the international spotlight. But one was not: pets dying in the U.S. from melamine-contaminated pet food sourced from China.
4. The Galactic Peace Hotel Signing Ceremony
Perhaps the most vivid story Bethel tells is of being ambushed at a signing ceremony. The deal terms had been changed—specifically, the price was increased by 40%—at the last minute. Surrounded by TV cameras, local officials, and a ceremonial setup dripping with symbolism, Bethel was expected to cave. To his credit, he didn't. He walked. Only then did the Chinese side back down.
This is a textbook example of a common negotiation tactic in China: the last-minute ambush. I've written before about how artificial deadlines, high-profile signings, or "sudden" law changes are used to create pressure to get foreigners to sign a contract. The goal is to force concessions by making the cost of walking away feel impossibly high.
Bethel's story is hardly unique. It's systemic. I've seen this kind of maneuver at least a dozen times with our own clients.
One case still stands out. A client asked us to handle a small U.S. dispute, limited to drafting and filing a complaint. After weeks of negotiation, we agreed on a flat fee of $10,000, with a blended hourly rate thereafter. We drafted the agreement in Chinese, sent it over, and got it back signed—quickly.
But when we looked closely, we saw they had unilaterally changed the fee to $1,000 and reduced our hourly rate by $150.
We immediately told them we were out.
They wrote back saying they'd honor the original $10,000 and hourly rate. We told them we had no interest in representing them—at any price.
China Today: The Same Old Tricks with Prettier Wrapping Paper
What Bethel describes didn't end with the "old China." It's still happening. Every. Single. Day.
Yes, Chinese companies are more sophisticated now. But that mostly just means they've gotten better at hiding the knife behind the smile. They still want to steal your IP. They still cut corners by swapping in inferior materials or components to save themselves money—just like they did twenty years ago. The difference? They're a lot smarter about it now.
Just last week, we dealt with a case where a supplier quietly substituted a lower grade of stainless steel—but only in a small, internal component. The downgrade wouldn't be noticeable for years. And they made sure the more visible part of the product used the correct grade, so the problem would fly under the radar for at least one product cycle.
We continue to warn clients: doing business with Chinese companies carries very real risks. If your Chinese partner ever decides they no longer need you, they won't hesitate to discard you—and take everything they can with them. Your IP. Your supplier list. Even your brand, if you haven't protected it properly.
These aren't hypotheticals. They're lived experiences—confirmed daily.
Lately, I've been speaking often (for obvious reasons) about what's required to leave China safely for another manufacturing destination like Mexico. I always start those talks the same way: no one should leave China until they've secured all the necessary protections inside China. And never tell your Chinese partner you're leaving until you've done so—or better yet, not until you, your team, and your assets are already gone.
"Don't mistake your hope for a strategy."
The Core Problem: What Happens When Winning Is Everything
Bethel has a theory about why this keeps happening, and it rings true. He traces it back to the Cultural Revolution, when traditional moral frameworks were deliberately dismantled and replaced with loyalty to the state. But today, the state has been replaced by something else entirely: the pursuit of money. Success—at any cost—has become the new ideology.
This isn't about cultural generalization. It's about strategic reality. If the other side believes that winning justifies any tactic, then you're not playing the same game—or by the same rules.
Doing Business with China in 2025
To sumarize:
- Trust but verify: even long-term partners may pivot overnight.
- Do not leave China without first securing your legal/IP ground.
- The risk calculus has changed—it's no longer "how to win in China" but "how not to lose."
Final Thoughts
Twenty-five years ago, I thought I was witnessing the birth of something unprecedented—a China that would seamlessly blend ancient wisdom with modern commerce, where East could meet West on equal terms. I believed the handshakes, the toasts, the promises that "this time would be different."
I was wrong. Not about China's potential, but about what it would choose to become.
The China I fell in love with in 2000—that place of boundless energy and genuine partnership—was somewhat of a mirage all along. Perhaps what I mistook for transformation was simply a very long audition, and the real show was always going to be something else entirely.
Today, as I help clients extract themselves from deals gone wrong and relationships turned predatory, I'm reminded of something a Shanghai businessman told me over dinner in 2008: "In China, we have a saying—'The river changes course, but it always flows to the same sea.'"
I thought he was talking about resilience. Now I realize he was talking about inevitability.
The tragedy isn't that China changed. It's that perhaps it never changed at all. And those of us who believed otherwise were the ones living in a fantasy—a beautiful, expensive, ultimately unsustainable fantasy.
The China yet to come won't be the one any of us hoped for. But at least now we know what we're really dealing with. And sometimes, that's the most valuable lesson of all.
This is China.
Ready to rethink your China exposure? We've helped companies do it safely, legally, and strategically. Let's talk.
A transcript of Bethel's interview clip is below. The full transcript can be found here.
[01:09:38]
Wow.
[01:09:38]
And so that was starting to happen, and it just got worse.
[01:09:46]
What are some of the other ones that you saw?
[01:09:48]
Well, I mean, look, we had a guy. I was on the finance committee at the American Chamber of Commerce, and I'm not going to say where this guy's company was from, because that wouldn't be proper. But a guy came in and he was the chief technology officer for, let's just say, a big manufacturing company in the US and he sat down with us in the committee and said, you know, the strangest thing happened. I plugged into the Ethernet at my hotel and my computer just died. And then when I resuscitated it, my hard drive was empty. And I was like, dude, really? You brought your hard drive with all your intellectual property to China? And at the time, nobody really thought about it, but I saw this happening every day. Every single day. I saw the craziest things in China.
[01:10:42]
What else did you see?
[01:10:45]
Well, so let me.
[01:10:49]
Did you know, did you have. I mean, obviously you did. The way that you just described that incident, your reaction to it. But how did you know that they were sucking all the information out of the devices and kind of the.
[01:11:04]
Because I had started developing relationships with a lot of folks in China and, you know, talked to them, and the operating philosophy is, well, if it's not bolted down, I'm just going to take it. They're just letting us have all this stuff for free. Thanks. But there's something more fundamental, and that is what happened in China after Chairman Mao took over is they had this thing called the Great Leap Forward, and then they had the Cultural Revolution, and they eradicated any semblance of morality from society. And so they replaced Mao's Little Red Book, which was their religion at the time, with success, power, success. And the new little G gods became Ferragamo and Gucci and LVMH and success and Harvard. And when you're untethered from any sort of moral core, you'll do anything to become successful, powerful. And you have a billion, four or whatever, 1.4 billion people who are just out for bear looking to make it. And I don't begrudge them because they're hardworking, very hardworking and intelligent people. But the beef I have is when you don't have a moral core. You'll do anything. So here we are. We've got a kid in China, and we've got to buy infant formula.
[01:12:44]
And my wife says, we're not buying Chinese milk formula. It's like, you got to be kidding me. There are like 200 million Chinese kids here or whatever the number is. Nope. So every time I'd come go to the States, I'd come back with two suitcases of Nestle. Good start. And she would buy Evian water. And I'm just, like, watching dollar bills evaporate, thinking it's like the stupidest thing. And it turned out, I want to say, in 2007, 2008, that Chinese infant formula companies were putting a plastic called melamine in the infant formula that was poisoning countless children in China. Because apparently that melamine artificially beefed up the protein so they could. They basically were cutting corners and putting chemicals that were hurting people.
[01:13:38]
So this sounds like the fda.
[01:13:42]
I don't know. So, yeah, I've seen it all. I've been screwed over more times. If I'm not getting screwed over in China, something's wrong. So if I'm at the signing ceremony of a deal and it's happened to me on more than one occasion, you go to, let's say you're doing a deal in some random province in China. True story. I stayed at. I went to. I think this was in. Was it in Dalian? I don't remember where it was, but it was in a. Not Shanghai, not Beijing. And I stayed at this hotel called the Galactic Peace Hotel, which I thought was funny because a lot of the names in China are very aspirational, even though they sound sort of silly to us. So I stay at the Galactic Peace Hotel, and it says, welcome famous American investor Eric Bethel. There's like this placard, you know, in lights, right? Anyway, I go to sleep. The next day, we're at our signing ceremony, and you walk into a hallway, and you have guys with TV cameras looking at you. You've got two chairs. It's very imposing. One with an American flag, one with a Chinese flag.
[01:15:02]
The municipal leadership team is there from this municipality, and we're going to sign the deal. And I look at the numbers, I look at the guy that I'm supposed to be doing the deal with, and it was like, the number we were supposed to be paying X and he had made it X + 40%. And I said, bro, what's up with this? And he's like, well, we had to change Things at the last minute, you're okay with it, right? And I said, no. But everyone's here, like, what are we gonna do? You have to sign. I was like, uh. And I walked out. And so I'm walking out, everyone's looking at me. It's very awkward. I'm hoping this isn't gonna cause an incident. And so I'm about to get in my car, and the guy's like, okay, okay, okay, okay, okay. We'll go back to your original number. Wow. Welcome to China.
[01:15:58]
Wow. That's an everyday occurrence now.
[01:16:01]
Everyday occurrence. So you see all this and you say, okay, I get it. Everything is transactional. Everything is a negotiation. And unfortunately, many Americans, many people in the west, believe that when you negotiate with somebody in good faith, the other party also has good faith. But what if they don't? And so you can extrapolate that to everything. Geopolitics, you can expand it to doing business. And for American investors that are still, for whatever reason, doubling down on China, I ask why. It just doesn't make any sense. I can understand if 20 years ago you needed to, you know, start a business. Although I am at this point very opposed to the wholesale outsourcing of our industrial base to what is now an adversarial nation. We've outsourced it all, and that's a problem.
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