US rule of law blocks trump China

Author: Danielle Myles | Published: 1 Jul 2015

A global survey of multinationals (MNCs) has revealed that foreign investors are more likely to encounter rule of law (RoL) issues in the US than China.

It also shows that executives place increasing weight on RoL when identifying target markets, and that they have more faith in domestic legislation than bilateral investment treaties (BIT) in protecting their investments.

The report, titled Risk and return: foreign direct investment and the rule of law, is based on the responses of 301 senior decision makers from the Forbes global 2000 list.

Its most striking findings are in relation to China. Despite its reputation as a notoriously difficult jurisdiction to operate in, only 13% of respondents active in the country had encountered RoL issues over the past five years.

"Once they are actually in the country, they told us that over 80% of the time they don’t actually encounter rule of law issues day...