China's emergence on the world economic scene is no longer a matter of debate.

You might be wary about some of the statistics coming out of China because like the economy, they are still evolving from their political and ideological Origins. What is clear however that this is a country that accounts for about one-third of global growth. Because it's making massive investments in its internal economy, rather than relying on exports for its economic advancement, China offers enormous opportunities for smart businesses. And unlike most of the rest of Asia, it's a relatively open market.

But doing business in China is challenging because the conditions are just so different. As the Shanghai Daily points out, it's going to give rise to a very different model, including the area of corporate governance (or as one businessman said to me: "What governance").

"America has, since the early 1990s, promoted what is widely termed the "Washington consensus" - open economy, strong financial and regulatory institutions, effective laws and regulations, minimum government interference in the micro-economy, maximum freedom of information flows, and high quality (transparent, honest, accountable) corporate governance.
"But China's success could be built on a political economy that, although very open to the international economy, de facto differs very significantly on the nature and role of the government and the efficacy of formal law and regulation, and other differences such as on key aspects of corporate governance."

These difference are picked up by Rich Kuslan in his Asia Biz Blog .

For a start, he says, the Chinese have historically not relied on law to settle disputes. Instead, the focus has been on such factors as party doctrine, familial relationships, power relations, friendships and similar forces. Secondly, what you see at first is never what you get. Valuable information is always withheld which means you have to take special steps when doing due diligence on on a potential partner or distribution channel.

Kuslan's blog also provides some handy links.

China's corporate governance will evolve as it seeks to attract Western capital. This will be particularly true for the Chinese businesses embracing the global market. The ones focusing on the domestic market will take longer. But it's not a one-way street. Western businesses will have to adjust to a very different way of doing business.