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Survival rules in the Party State

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Whether you are entering the Chinese market or have been there for a long time, there can be no let-up in the attention you pay to the government. Government relations will always be significant, must be cultivated continuously and can never be taken for granted.

A good starting point is to remember how ubiquitous the government is in China's markets. The party-state is crucial to just about everything that a business needs to obtain or know about: land, energy, accounting standards, tax regimes, implementation of regulations or bank loans.

It is also the key integrator of China and its market, and is the sole conduit for hearing political demands and settling political differences. It is only a slight exaggeration to say that the five different levels of the party-state control just about everything from the top to the grass roots, and across the huge expanse of China's business system.

The party-state can make or break your business. But with authorities at different levels doing apparently contradictory things, detailed knowledge about the internal bargaining and policy trade-offs that go on is essential, and that knowledge can only be obtained by keeping close to the people that matter.

Rule No 1 for doing business in China is to learn about how the party-state operates in theory and in practice. For instance, given the country's size, local governments are permitted to interpret and implement national laws to suit their own situations.

So corporate operations across China will find typically that conditions at each site will be different, with variations in the many permits, certifications and other bureaucratic instruments necessary to start and maintain operations.

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