For the past 30 years “stability first” has been the China government’s paramount objective and a critical factor in the country’s phenomenal growth. As the transition in China’s political leadership approaches we should not expect to see any major changes in either the policy or the political environment. The situation confronting MNCs in the investment and operating arena is therefore unlikely to change.

The transition will see the current and future leaderships work together to ensure a smooth transfer of power and the policy priorities during this period will closely follow those set out in the 12th Five Year Plan. In contrast to the US or Europe, the...