Economic Affairs

Investing in China: The game has changed

Politics is reshaping the corporate and investment landscape

Some investors fear that the ban on education companies' VIEs could be extended to other sectors.PHOTO: REUTERS

The carnage in US-listed Chinese stocks last month - the worst since the global financial crisis of 2008 - has upended many foreign investors' assumptions about investing in Chinese companies.

Lured by the promise of a vast market with visionary entrepreneurs and innovative companies, investors were willing to overlook many of the issues they normally consider important when making investments, such as robust accounting practices, predictable regulations, high standards of corporate governance and legal recourse. But now, they have to contend with some new realities of China's politics, and geopolitics.

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