Doing business in China: a demonstration project

"Only a few months ago the $US7.8 million ($10.25 million) that Alex Liu and a group of ex-Hong Kong investors, including two Australians, had put into a high-rise hotel here looked like dead money, an expensive case study in what can go wrong with foreign investment in China.

Their local government partner had loaded the hotel with extraneous debts, seized the official seals and expelled the managers, put the enterprise into receivership, then handed it to cronies who milked it of cash. This week the investment was back from the dead. The leading crony was under arrest, city officials were running scared and grovelling, and Alex Liu was back walking the lobby, directing staff in a physical and financial clean-up to salvage the business.

Still, it's a hair-raising story. Liu, a 60-year-old building engineer with a well-regarded firm in Hong Kong and a family home in Toronto, Canada, and his partners are pillars of respectability. But they had to act as street activists to gain attention in China and keep protesting to get judicial, party and state officials to override powerful and corrupt local vested interests."

This and more at: http://www.smh.com.au/news/business/investors-confront-chinese-corruption-and-win/2005/10/03/1128191658544.html