According to The Economist magazine, China Aviation Oil, after incurring some $550 million in losses is just one example of the corporate fraud rampant in China. Corporate governance is poor and authorities do little in the way of enforcing rules of corporate conduct. Many executives in both state run and private firms have a limited understanding of independent boards and audits.
Yet, non-Chinese stock exchanges are lining up to welcome Chinese companies. The London Stock Exchange boasts it has looser requirements than the NYSE.
Foreign investors aught to be wary.