Jake's View

Li Keqiang well advised to keep foreign wise men at bay

PUBLISHED : Sunday, 09 June, 2013, 12:00am
UPDATED : Sunday, 09 June, 2013, 2:40am

Beijing has for the first time established an advisory council of multinational heavyweights to help the leadership keep a finger on the pulse of major corporations in vital industries.

South China Morning Post, June 7

I remember when Tung Chee-hwa did this as Hong Kong's first chief executive not too long after taking office. It was his big idea for gathering big thoughts on Hong Kong. He wouldn't otherwise have had many, I gather.

I can't remember who all these people were as, aside from Rupert Murdoch, they were mostly pretty forgettable. But they all came and sat down at a big table and agreed that water is wet, the pope is a Catholic and the sun rises in the East. Oh, and sets in the West, too.

Then they all went home again and the local wolf pack (reptiles, scandal-mongering journalists, call them what you will) zeroed in on the cost to the public purse of the first-class air tickets to fly them here. It's a matter dear to journalist hearts - corporate chieftains wallow in luxury while journalism is at best a waystop en route to the poorhouse.

Ah-Tung said he would do it again, but I don't think he ever did or, if he did, no one took any notice. We got that one right.

Premier Li Keqiang will get no more from his own advisory council. A troop of businessmen from Europe and America will troop in, most of them top businessmen in their enterprises only in the sense that Britain's Queen Elizabeth is the top in hers.

They will then offer homilies of the sort seen on plaques in the living rooms of middle class homes (Honesty Is The Best Policy), applaud do-goodery in general terms and leave again. I imagine even the prostitutes will get no cheer off this bunch.

What I think the premier needs to take on board is that the proper nature of relations between corporations and government is more adversarial than collaborative. This does not say they must be at each other's throats. Relations between the two can be perfectly cordial if only they remain somewhat distant and both parties remember that they have different responsibilities.

A recent example that comes to mind is the response of the world's biggest light bulb manufacturer, Philips, to a government approach for participation in a voluntary scheme to stop sales of incandescent light bulbs in Hong Kong.

No, said Philips. You people are doing it the wrong way. If you want to ban incandescent bulbs then make a ruling to that effect and we'll obey. But a voluntary scheme is likely to break down and we are not going to penalise our shareholders by adhering to it when others can cheat without penalty.

I think this is exactly the right stance for a corporation to take. It allows discussion with government of any public initiative but says in the end that government must take the initiative in matters of public welfare and recognise that private companies have fiduciary duties to shareholders.

In meeting Mr Li, for instance, Volkswagen chairman Martin Winterkorn said he had discussed China's strategy to develop its central and western regions.

This leads to some obvious questions. Just how much does a German carmaker know about development questions in Xinjiang? Does Mr Li, whose job it is to familiarise himself with such things, really think Mr Winterkorn has expertise here? But what Mr Winterkorn can contribute is the establishment of a car-parts factory in Xinjiang. Whether or not he thinks it a worthwhile proposition will depend on what terms Mr Li offers him and his own board can accept.

There is a proper place to work this out. It is across a negotiating table in the proper formal relationship of two parties seeking common ground in differing objectives. It certainly is not done in a glad-handing town-hall style group grope in which everyone smiles and pretends they are on the same team.

I assume that Mr Li knows all this and that he actually has a mask on in sessions with his foreign advisory council. At least I hope he does. I would take anything else as evidence of incompetence in public administration.