Compliance is a top priority for every U.S. company. Business owners know this, of course. That is why they must take great care in every business transaction and venture.
However, complying with commercial laws in China can be slightly more complicated. It can be difficult for business owners to obtain properly translated versions of rules and regulations. And the regulations often work differently in different situations. This only increases the risks U.S. businesses face. And according to a recent report, the stakes may have just jumped higher with the rollout of a new data tracking system.
September to bring new regulations to track businesses
Late in August, China announced its new National “Internet + Monitoring” System, which could reshape their entire business environment. CNBC News reports that this new system will allow China to increase its enforcement of commercial laws and compliance. And they will do this by regulating how much data local and foreign businesses must share with the government.
Essentially, when businesses share a significant amount of data with the new system, it would allow the government to track more of their actions and business endeavors. Chinese officials, such as Commerce Ministry Spokesman Gao Feng, state that this would create a more “fair and predictable business environment.”
How can business owners prepare for more regulation?
Under this new system, U.S. businesses in China could very likely face even more scrutiny. Even a minor violation could result in serious consequences. There are still many worries and concerns about this new system and the effects it could have. But in the meantime, there are several steps that business owners can take to protect their businesses in light of this news.
Although it is still uncertain how the system will work, it could be helpful for business owners to:
- Collect and organize financial records and data
- Verify that employment agreements are correct, and perhaps conduct an audit
- Reevaluate all contracts and business licenses to ensure they are valid
- Review Chinese compliance laws and the new system with a trusted professional
Ensuring that businesses comply with Chinese laws now is the best strategy to help businesses ready themselves for when this system takes full effect in the future.