Can China Represent an Alternative to Excessive Western Regulation?


As shocking as the concept may seem, China can indeed end up representing a better jurisdiction from a regulatory perspective in quite a few cases but right off the bat, we want to make it clear this doesn’t mean it can be considered a perfect one, not by a long shot.

Instead, we would like to point out that this (sad) state of affairs says more about the West than about China… let us elaborate.

First of all, we have mentioned rather frequently that from a regulatory perspective, China can oftentimes be a nightmare jurisdiction, with entire industries just one decision away from being effectively wiped out. Perhaps the most straightforward example to that effect is represented by cryptocurrencies, with which China has had a love-hate relationship right from the beginning, a relationship with even led to them throwing the proverbial book at sub-sectors such as cryptocurrency exchanges and cryptocurrency mining.

Even if the authorities sometimes sweeten their tone, for example by initially including cryptocurrency mining on the list of activities that are to be discouraged but ultimately removing it, let’s just say that the regulatory dimension can be extremely volatile in China and as such, is hardly a “poster boy” example with respect to how authorities should treat entrepreneurship.

Unfortunately, the West has gone down such a dangerous path when it comes to over-regulation that yes, China actually seems an attractive alternative in many respects from a strictly regulatory perspective. Not due to wage arbitrage, nor due to infrastructure or other arguments but strictly from a regulatory perspective.


Primarily because entrepreneurs are feeling increasingly over-regulated to the point of maximum frustration, especially in jurisdictions such as the European Union.

As a EU citizen who has hit the USA Today and Wall Street Journal bestseller lists with his second book, I will provide a bit of anecdotal evidence. Simply put, I found out that my book had hit the USA Today bestseller list and decided to… well, visit USA Today’s website and see for myself. Unfortunately for me, due to GDPR regulations and other setbacks, EU citizens no longer have access to the full version of USA Today’s website and instead, their experience is limited to a “compliant” watered-down one. As per Murphy’s Laws, the version in question doesn’t include the bestseller list, so I was effectively forced to find a way to use a non-EU IP address just so I could take a look at that week’s bestseller list.

The US is hardly “innocent” as far as over-regulation is concerned, with my One Minute Economics YouTube channel experience being another anecdotal piece of evidence. Nowadays, it tends to seem that whenever I log in, I have to go through yet another bureaucratic hoop, in some cases one that affects my YouTube channel directly. For example, I was asked whether my videos are “Made for Kids” and I “said” sure, in light of the fact that they are animations that are most definitely suited for a young audience. However, I later on found out that “Made for Kids” means made EXCLUSIVELY for children and that by selecting that option, comments and other features are disabled, so I ended up having to perform a 180 turn.

Things have gone (far) beyond reasonable prudence and well into the realm of pure and utter legislative insanity, with creative entrepreneurs being forced to spend so much time and energy on “compliance” that they end up losing sight of whatever their vision was in the first place.

As such, jurisdictions such as China become attractive not so much because regulators are reasonable (hint: they are not) but rather because in China, it is at least far easier to fly under the proverbial radar and find ways to focus on actually doing business. To put it differently, China has become attractive as a “grey area” jurisdiction, one which represents a viable alternative to the proverbial West in a wide range of situations.

Yes, today’s China. A country ruled by none other than the Communist Party of China. A China which does not tolerate free speech. A China which, despite unanimous criticism, is so far away from being considered a country that respects human rights that it is pointless to even embark on this debate.

It should now be clear why, as mentioned at the beginning of today’s post, this state of affairs is hardly something China should be proud of or consider a victory. Instead, it’s simply a matter of China representing the lesser evil in certain situations due to Western over-bureaucratization by rulers who wouldn’t even be able to run a lemonade stand profitably but, instead, would undoubtedly find ultra-verbose ways of blaming their failures on outside factors.

A victory for China?

Most definitely not.

A humiliating failure for the West?

Most definitely.

Time and time again, it is proven that a business, individual or in our case country such as China can develop an edge not thanks to its own merits but due to the incompetence of the competition. The situations outlined today most definitely qualify and pragmatically speaking, it matters little what the underlying cause behind the regulatory flight from the West actually was.

The only aspect that ultimately matters is the end result, with nations such as China having ample revenue potential on the table should they be able to understand this trend and act accordingly. Will this happen? In our view as a company that has a brick and mortar experience of over a decade in China, the answer is probably negative.

A reformed China which understands that the glory days of “easy” double-digit yearly GDP growth rates are long gone and that something needs to be fundamentally changed so as to effectively transition to a dominant superpower in every sense of the word, however… well, yes. It remains to be seen what the future will hold in terms of regulation, our team will (needless to say) follow all developments with the utmost professionalism and, of course, put its expertise at your disposal.

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