Understanding Politics
The Chinese government is currently very welcoming to business, technology, and research, and to positive relationships internationally. Interacting with the local ministries and agencies can, at times, require patience and good humor, but once you have proven a good corporate citizen, government officials will become your most important allies.
Getting to grips with red tape
Chinese government is composed of three branches: the executive branch, led by the President and Premier, and administered by the State Council through a complex bureaucracy; the legislative branch, led by the single-house National Peoples’ Congress (which studies and enacts the law, and elects the President and Vice-president); and the judicial branch, led by the Supreme Peoples’ Court.
This structure is generally replicated on the provincial level and, for the executive and judicial branches, on the municipal level. Paralleling the government structure at each of these levels is the Communist Party organization, with a municipal General Secretary filling a position that is effectively comparable to that of a town’s mayor.
Business people normally interact most frequently with municipal leaders, such as the mayor and multiple vice-mayors, and with the local offices of the State Council ministries, such as the Ministry of Science and Technology, the Ministry of Commerce, or the State Administration for Industry and Commerce. These local offices are funded by local government, and while they nominally report to Beijing, they often seem more influenced by the agendas and priorities of local government. This can be beneficial if you have a local project to implement, but frustrating for a firm wanting to create a national organization. The key to dealing with government in China is transparency and good corporate citizenship. They will be watching to see that, while you are making generous profits, you also care about the welfare of your Chinese workers and of the community and will support the important social objectives of the nation, such as investment in rural areas and energy conservation.
Avoiding political pitfalls
In dealing with Chinese business people and government officials, a high level of sensitivity is necessary when discussing:
Taiwan, Tibet, Hong Kong, and Macau as parts of China
Chinese–Japanese interaction 1936–1945
The 1989 occurrences in Tiananmen Square (and civil disorder in general)
Mao Zedong or other founders of China
Religion in general
Trade unions and workers’ rights
The convertibility and value of Chinese currency
International trade disputes, and the actions of the WTO
The role of Communism in China’s economy
Perceived failures of socialism in history
The relative merits of liberal democracy.
Fostering good relations
| Fast Track | Off Track |
|---|---|
| Demonstrating your commitment to China symbolically by contributing to charitable or cultural organizations | Mixing an agenda for political or social change with your business aims in China |
| Employing patience and good humor in dealing with the bureaucracy | Complaining about inevitable bureaucratic delays—China invented bureaucracy |
| Cultivating long-term and trusting relationships with government officials | Attempting to influence officials with lavish gifts, entertainment, or cash |
TIP
After you establish a basic relationship with a government official, suggesting they visit your firm or home in your country can help foster beneficial relations. It can also lead to genuine friendship.
TIP
The overlapping and competitive nature of Chinese ministries often necessitates multiple visits to get something done. There are agents and expediters who will volunteer to “take care of all the details” but since these encounters with bureaucracy are relatively infrequent but important, it may be wiser to simply get in line.