- Matthew S. Erie, Compliance in China, 20 Reg. & Gov. 149 (2026).
- Matthew S. Erie, Molly Bodurtha & Sokphea Young, Legal Brokers of Chinese Investment in Cambodia: Compliance Between Contract and Culture, 20 Reg. & Gov. 162 (2026).
What does a garbled snippet of English commercial boilerplate mean when pasted into a Chinese-law contract between a Chinese policy bank and a parastatal in a low-income country? What work does a seemingly nonsensical promise to keep secured and unsecured debt equal (“pari passu”!) do in the relationship between that bank and, say, the government of Benin? How would an arbitration court in Beijing, apparently vested with authority to enforce these contracts, decide whether the parties complied? As a non-sinologist communing with such contracts, I find these questions endlessly puzzling yet mostly ignored in the legal and policy debates over Chinese overseas investment.
China in Compliance, the special issue of Regulation & Governance edited by Matthew Erie, is a welcome reprieve from the China Good/China Bad back-and-forth that sucks the oxygen out of debates about Chinese overseas investment. Better yet, the issue offers unexpected insights into legal ethics and corporate compliance. The editor’s introduction, Compliance in China, and the first article, Legal Brokers of Chinese Investment in Cambodia: Compliance Between Contract and Culture, co-authored by Erie, Molly Bodurtha, and Sokphea Young, are good places to start for a sense of Erie’s Chinese Law and Development project. Together, the papers contribute to what he calls an ‘ethnographic record of global China.”
The geographic and disciplinary range is impressive. The authors report on Chinese overseas investment in wildly different places. They cover poor (Cambodia, Kyrgyzstan), rich (Singapore, Taiwan), African (Ethiopia), European (Hungary), and Pacific Island (Fiji, Vanuatu) states, and sectors ranging from extraction to education. The research question for the issue as a whole is how Chinese “corporate and investor behavior … conforms to the rules, norms, and law in host states.” The answers engage with sinology, politics, organizational theory, and comparative corporate and international investment law.
Considering compliance without looking to (or from) the North Atlantic pays off, firstly by making the very idea sound dissonant, unmoored. For instance, Cambodian “legal brokers” accompany a Chinese investor every step of the way through building and operating a factory or casino in a special economic zone to ensure compliance with applicable land use, environmental, construction … what, exactly? … laws, norms, and bribe schedules? The answer in most cases is all of the above. It takes judgment and know-how to achieve and maintain “manageable” levels of compliance, which in some cases has meant a 90% building code violation rate. In the Cambodia study and elsewhere, living in the grey zone requires a dynamic mix of formality and informality: procuring just the right forms, paying just the right bribes, cultivating just the right relationships, and abiding by the norms of multiple overlapping communities. Put differently, compliance with unstated rules for violating or circumventing the law under regulatory uncertainty is highly skilled professional work.
Even successful senior Cambodian lawyers who do this work skip accreditation to avoid paying “informal fees” to the national bar association. Bribing one’s way through a public court proceeding seems to be both costly and of limited social use: if you win in court, it would be read as you paid a bigger bribe. Real dispute resolution can only happen in arbitration behind closed doors. When getting a bar license or going to court sends the wrong compliance signal, who are the gatekeepers, and where are the gates?
The foreign investment setting makes such questions more interesting because it implicates at a minimum two sets of legal institutions and cultures, and the relationship between them. China has rapidly developed a large and politically salient compliance industry, in part under Western pressure on China as the investment host, with at-best uneven implementation. The interaction between this compliance industry and “nascent” compliance institutions in the host states, with China in the capital-exporting role, is worth studying as an academic and policy project.
It is tempting to say that the work in the special issue is a fancy way of describing ordinary lawyer-abetted corruption, or excusing it as cultural difference. Regulatory capture and going through the motions are not Chinese or Cambodian inventions. Lawyers in New York and London have been littering their contracts with meaningless boilerplate, artifacts of compliance with unwritten norms and imaginary standards, long before the Chinese banks in my introduction. Erie’s introduction concludes as much, observing that the difference between compliance in China’s overseas investment practice and that of legacy Western powers is one of degree. Even that distance has been shrinking. Now more than before, the corporate compliance catechism feels like a sham, a meta-fraud on ethics. The embarrassment of an elder statesman exposed as a knave and the fear of delegating decency to the machines feel quaint these days, when lawyer-as-fixer is everywhere and seems to be the norm. With the Foreign Corrupt Practices Act officially mothballed, are we ready to dismiss the vestigial tsk-tsk of compliance as whiny protectionism? Does “adaptive governance” call on us to train a generation of fixers, running faster to stay ahead of the machines?
A stock comparative move is to show that concept A (here, compliance) transposed to place B is not what we thought A was. Fair reminder. Compliance in China and Cambodia is not the same as compliance in the West. We know the ending. But starting points matter, and starting in Beijing and Phnom Penh rather than Houston and Caracas makes the tour of compliance theory and practice more interesting and generative. Here, qualitative methods, and especially ethnography, save the day. Thick description anchors the authors’ questioning of established analytical categories, and at the same time, anchors the reader’s take on international investment and compliance in the particular human experience of despair, creativity, and perseverance.
