One Billion Customers - James McGregor [81]
In the end, this sort of government advocacy is an art, not a science. There are no magic formulas. You must rely on the instincts of your most experienced China hands and business executives to decide when and how hard to push. You can’t be too hard, but if you’re too soft you’ll get nowhere. Indeed, you need to exercise caution about which weapons you do use. Had we chosen to flex our muscles by shutting off our information flow to China’s banks and trading firms, plunging them into chaos, we would simply have confirmed that foreigners could have a stranglehold on a vital sector of the Chinese economy. The focus would have shifted instantly from economic development to state security. That’s a battle no foreigner will ever win.
My best advice for handling these crises is to anticipate that they are coming and spend the money for comprehensive and proactive government relations in China. Many companies hate to do this because the costs can’t be directly attributed to profits. You can be certain that if you are doing business in China, whether your company is big or small, you will run into political problems, large and small. You may not end up in a debilitating battle as we did. But with one part or another of the Chinese government having its fingers in every aspect of business in China, if your regulator is not your competitor, it is likely that your regulator is dedicated to helping your Chinese competitors.
The Little Red Book of Business
Be tough. The Chinese respect it. Never “tremble and obey” if doing so will damage or destroy your business in China.
If engaged in a heated battle, remind your Chinese counterparts of their own proverb: Bu Da Bu Xiang Shi, “Without a fight, you don’t get to know each other.”
Remember that while China is confident, reasonable, and eager to become a world-class competitor, many Chinese politicians remain deeply paranoid and insecure about the outside world.
Avert crises by spending the money necessary for a comprehensive and proactive government relations program in China. You might even help shape your industry’s regulatory environment.
Before engaging in a fight with a hostile regulator, determine if a fair deal can be done. Is there a way to satisfy what they are seeking and still maintain a reasonable and independent business in China?
If you must fight with the bureaucracy, take your fight to the highest possible level, where officials are the most reasonable and focused on China’s larger interests.
Frame your arguments to show how your business is good for China, not what is wrong with the Chinese government. You can’t make the system look bad.
Government officials can lie to you, but you must never lie to them. Exclude information, but don’t provide false information.
Be prepared to educate the bureaucracy from top to bottom to prove that your proposition is better for China than that of your government adversary.
Persistence pays. Make yourself a major nuisance by blanketing the bureaucracy and leadership circles with polite and professional letters asking tough questions and raising issues bolstering your position.
Patience pays. The Chinese are waiting for your attention to wander or your headquarters to grow weary of battle. Adopt your own “iron-ass strategy” by developing an oratorical loop you can politely repeat while sitting in your chair for hours.
Play the “dumb foreigner” when necessary. Tie your opponent in knots by asking detailed questions about how the system works. The Chinese believe that their system is so nuanced, complex, and inscrutable that foreigners could