Mapping the Bureaucracy to Plan Your Network

The Chinese bureaucracy is massive. It extends far and wide, with layers upon layers of officialdom. Smart companies understand that developing a systematic approach to government and relationship management can make a difference. It involves getting an understanding of who’s doing what inside the government. By understanding what government units, and who within those units, can possibly help you, you’ll have a better chance of getting ahead with your plans for China and may be able to save your company some hassles later on. You may even create new opportunities for your company along the way.

Identifying key government organizations

Getting a handle on what government organizations should be on your radar screen is an important first step in getting your government relations program organized. You need to identify each and every Chinese government organization you’ll likely be involved with. You want to find out the following:

✓	Who regulates the industry and at what level in the central government
✓	How the central ministry relates to the provincial and city level
✓	Which Chinese government think tanks or government agencies may influence your business
✓	Names of other government units involved in the business
✓	Names of other organizations or specific individuals who may have a say in your business
✓	Which government-related organizations from your own country you should work with
✓	Which nongovernmental trade or business groups can help you

Embassies, consulates, and export agencies of foreign governments are excellent resources for such information, especially for small- and medium-sized companies with a limited budget. Many companies supplement the info they get from their home government agencies or embassies with information they develop themselves by making contacts within the industry in China. Some larger companies choose to use external consultants. For more information about foreign government organizations that may assist you, go to Chapter 4.

When your company begins to hire people locally, your people on the ground should know which local officials to contact on any approval or permit. So if you’re expanding your factory, adding workers and needing training permits, or performing other activities that require government approval, your locally hired senior plant manager should know whom to call on within the local government.

Identifying the key influencers

After you identify the government organizations that’ll likely influence your business, determine who the key players are within those organizations. Make contacts in China with people who know the structure and who the players are. You can find such contacts within the following:

✓	The Chinese government itself as you get to know the officials
✓	Your industry business circles
✓	The commercial services provided by your government

Your list of influencers may include many people within the same government unit. It may take you across China’s provincial borders as well. Don’t forget to include key influencers from your own country, such as your ambassador to China and commercial officers at your embassy and/or consulate. And remember to include other China-related business or trade organizations, such as the US-China Chamber of Commerce or the Canadian-China Chamber of Commerce.

For small businesses, you can usually figure out pretty quickly who the key players are — your list may include no more than local government officials if you’re investing only in a local area. Although your dealings with the government may be minimal, understanding the dynamics of the local government structure and people is worthwhile. When you work with and get to know the local officials, you figure out the pecking order and who does what within the government structure. As your relationship grows, the local officials may become useful contacts for you.

If your company has more ambitious plans across China, you need relationships with the local government in each and every location where you plan to do business. Laws and some regulations can vary quite a bit from one place to another.

Make sure you have more than one relationship inside the government section or unit so that if one contact gets promoted, you have someone else in the department who knows your company.

Government officials move from job to job frequently. Generally, when an official leaves a post for another job, any commitments he or she made to you or your company leaves, too. Don’t be surprised if you find yourself in a position of restarting discussions with a new official who has no commitment to any promises made by his or her predecessor.

Protect yourself through contracts. If, for example, the vice mayor offers you tax incentives if your company builds a new factory, execute an investment contract with the local government in which it commits to providing these benefits. For more on investment contracts/agreements, see Chapters 7 and 18.

Tracking key relationships

After you identify the organizations and key players you need to get alongside, you can begin to track your Chinese relationships. You can do this step informally instead of creating an actual map, or you can make a graphic representation of the government organizations and officials that are or should be part of your network. This map can be a good visual for your senior executives so they can better understand the government organization and the Chinese officials who are key contacts for your organization. Your map will likely include Chinese organizations such as

✓	One or more Chinese regulatory commissions
✓	Several key Chinese ministries
✓	National, provincial, and local government leaders and their key staff
✓	Government think tanks
✓	University research centers
✓	Embassy and/or consulate government officials

This mapping exercise is especially useful for mid-tier or large companies that are planning or operating multiple investments in China across multiple provinces while dealing with multiple governmental organizations. But it can be easily adapted on a smaller scale for other firms setting up in China. Here’s how the process works: