Caterpillar's revelation it found fake accounts at a just-acquired Chinese firm which will cost it hundreds of millions of dollars is a cautionary tale for those looking to enter the hugely promising market.
Caterpillar, one of the first US manufacturers to start exporting to China nearly four decades ago and which opened its first Beijing office in 1978, said it had removed several top Siwei managers for overstating profits.
Analysts said the stumble by a Chinese market veteran served as a reminder of the pitfalls of doing business in the country.
"This is going to teach firms that they've really got to do due diligence, especially when they see a company as large as Caterpillar run into a situation like this," said Ben Cavender, of Shanghai-based consultancy China Market Research Group.
But there would still be strong demand to invest in it, he added.
Foreign investors have poured more than US$1.0 trillion into China since it launched economic reforms in 1978, with US$112 billion last year alone.