Investors not worried by China’s Chongqing mystery

In our last web poll we asked readers if the mysterious death of British businessman Neil Heywood and the purge of former Chongqing party chief Bo Xilai damaged investor sentiment towards China.

Half the respondents said not, while the other half agreed that it had at least done some damage. That is probably about right. If Bo’s wife had murdered the executive of a big multinational it may have been a different matter, but Heywood worked as a small-time consultant with few strong ties to any international companies. Indeed, his main ties were to the Bo family itself.

Even so, the nature of the case is worrying. Chongqing was until recently considered a good example of a modernising, can-do Chinese metropolis — and Bo was on course to be appointed to the Communist Party’s top leadership. It is hard to know which media reports to believe, but it is clear that Bo (together with his wife) was something of a tyrant who abused the powers of his office to threaten and intimidate opponents.

If this is how well-run Chinese cities operate, what are the bad ones like? Pretty bad, would seem to be the obvious answer.

However, large foreign businesses are less affected by provincial matters as their presence in the country is typically approved at a national level. What happens in Chongqing stays in Chongqing (until the police chief runs off to the nearest US embassy to blurt it all out).

In some ways it hardly seems to matter at this point as the story of Chen Guangcheng, a blind lawyer and human rights activist, has crowded out all other news from China. His daring escape from house arrest was a story that launched a thousand editorials.

But far more daring, we thought, was the romantic advance that Chen reportedly made towards US secretary of state Hillary Clinton, perhaps assuming that all the Clintons were generally up for a bit of extra-marital action. Oops. He was soon turfed out of the embassy after that, though US officials insisted that he left entirely of his own free will.

As for foreign investors, such incidents seem to be of marginal concern. Perhaps they draw comfort from the idea that there is safety in numbers — ie, the millions of dollars they are investing in the country. And that’s probably a safe bet. China may treat its opponents poorly, but a foreigner bearing money (and advanced technology) will enjoy far better treatment than the average Chinese citizen.