A rise of nationalism severely affecting foreign business is underway.

The observance was first made from a rather niche blog - ACF China Co - Millstone Trading blog – which is about importing home furnishings from China. The following excerpt was repeated enthusiastically at China Law Blog:

If I were worried about one single element of doing business in China today, it wouldn’t be inflation. Nor would it be the rising costs of exports due to the rapid appreciation of the Yuan. Or rising fuel costs for that matter. Air pollution? Nope. The cost of labor going up would not be my main concern either. No, all of these issues seem unpleasant yet manageable, in one way or another, even if difficult. So what then pray tell would it be? Definitely it would be rising Chinese nationalism.

China’s increasing self-awareness as a world superpower combined with its often unilaterally necessary defense of key national interests such as those related to Tîbet and Taiwan make a good case to be nationalistic.

So if the good home-furnishings people are right, then foreign business in Beijing could take a lesson from K Street in Washington. It’s time to learn lobbying lingo, and do a better job at making your case for why China needs you at a time when it already has itself.

The Business of Lobbying in China, by Scott Kennedy, is a good place to start.

UCLA International Institute provides an excellent summary of the book, and here are some key points:

• Know how policy is made. It’s not all a groupspeak by-product. Rather, it results from: 1) bargaining between elite politicians and various bureaucracies, 2) expertise provided by intellectuals that include economists, lawyers and reseachers in government-sponsored research institutes, 3) National People’s Congress legislation. Influence one of these parties, and you’re on your way to better business prospects.
• Concentrate on the law, not the party plan.

  According to Mr. Kennedy via UCLA:

  During the Mao era, and even into the reform era, the most important thing for companies was the plan, and where they fit into the plan. And thus they would negotiate with the state about the cost of inputs and the price of outputs, and so on. But now, with the move to a market economy, and the move to create a regulatory structure to rule over this economy, there have been hundreds of thousands of laws and regulations passed. . . . These regulations have become a focal point for lobbying, because they matter and affect the life chances of companies.

  We’ll note that James McGregor, a former Wall Street Journal China bureau chief, has recommended reading the Five Year Plan to “figure out how the argument for your business at least pretends to follow that.” But lobbying to change the law rather than the government’s sacred plan probably will be more effective.

• Lobbying via Chinese trade associations can have mixed results. There are a lot of associations – more than 400 nationally – but their power is mitigated by two factors. Those that are completely autonomous can’t get access to government stakeholders. Those that aren’t can’t convey what they might like to. Those in the middle – with some access but without complete autonomy – could be helpful to engage. Do your homework, though, because there also is a lot of variability across industries.
• Direct lobbying dominates. E-mail and personal visits to bureaucrats happen on a daily basis among those who are lobby savvy.
• Forget about the Communist Party. For lobbying purposes, it is unimportant. Rather, lobby the ministries and commissions responsible for daily management and regulation of business policy. “This is because quotidian regulation occurs with the state (executive) apparatus, not in the legislative organs or in the party,” according to the UCLA summary.
• Don’t cultivate clientelist relationships (read: don’t bribe bureaucrats). You’ll have to get through a lot of gates to affect national policy, so buying the influence of one local official probably won’t help.
• Don’t piss yourself when meeting a communist cadre. “Foreign lobbying in China is as common as water,” according to Mr. Kennedy.
• It’s not always winner-take-all. Ever hear of win-win? In one notable video-standards battle, two corporate sides with equal amounts of guanxi fought a heated battle for government favoritism. In the end, the government approved an entirely new standard that supported both.
• If your concern is parochial – like a needed business license – you might just need a head nod. Expect some clientelism (read again: corruption). If your concern is shared by many in the industry or across industries, expect more formal meetings and intensive lobbying.

    Channel: Vital News     |