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The PAA China Government Affairs Forum

As the lobbying “industry” develops in China a new question will arise: should the industry itself become more transparent?

PANEL MEMBER: YUAN HAIYING

Yuan Haiying founded Beijing based government affairs practice Yuan Associates in 2004. He has 30 years experience in the Chinese Government, including senior diplomatic postings in Washington DC, as China’s Agriculture Attaché, and in Rome, as the Alternate Representative to the United Nations Food and Agriculture Organization (UNFAO).

He has also worked as Senior Vice President at Edelman Public Relations for three years and as Vice President at APCO Worldwide for three years. He is a former chairman of the Government Affairs Committee of the American Chamber of Commerce and a Council Member of the China International Public Relations Association (CIPRA) and the Beijing Foreign Investment Association.

Yuan Haiying's view: I want to first note that lobbying and monitoring of the policy/ legislation process in China are two different things.  Everyone should monitor the policy process if you want to operate in China; this is a given.  Getting involved in this process is another thing altogether.

There are, of course, fears that MNCs are too influential or even a threat to China’s national security, and this can create barriers for MNCs who wish to participate in legislation.

The key is to overcome these barriers by adding value to the process.  Many of China’s laws are very vague and subject to huge differences in interpretation.  Standards are not inline with international standards.  We know these things.  So what can you bring to the table?

Start by taking a look at your industry.  In China, things change so fast the word ‘current situation’ is used a lot – because the assumption is things will be different tomorrow.  So what is the ‘current situation’ with your industry, and how is it changing?

Then, find out what the government wants for this industry.  A little hint: stable growth is a good place to start.  Industries will vary, but you can expect those responsible for regulations on most industries will seek to create conditions for stable growth.  Your experience, and professional policy monitoring, will tell you what other priorities there might be.

Remember: you are helping to take responsibility for the success of your industry.
When the time is right, you may provide policy ideas to concerned officials.  When you do so, it is important, again, to highlight that your company is contributing and not simply seeking personal favors.  You should also emphasize your experience and knowledge, both internationally and in China.  Let them know you are experts.

Finally, be prepared to follow up with actions.  There are all sorts of options for cooperating on legislative efforts, including test pilot projects, research centers, draft writing/ review and comment, standards development and/ or input, as well as a variety of formats for cooperative projects.

In conclusion, let me note that patience is also important.  Sometimes things in China change faster than expected, while sometimes the change is too slow.  It’s almost never at the right time!  However, if you are monitoring policy professionally, and if you add value to the process, you can contribute to the policy formulation and play a role in making things better for everyone involved.

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PANEL MEMBER:  QU HONG

QU HONG is director and chief consultant of government relations and public policy consulting practice at Burson-Marsteller China. His past and current clients include Visa International, Zurich Insurance, BHP Billiton, Total, ExxonMobil, Celanese, Nickel Institute and Mobile Manufacturer Forum.
He previously spent more than seven years in the Ministry of Commerce, where his main responsibilities included developing bilateral and multilateral relations between China and the countries of the Americas and promoting a series of governmental, economic and commercial projects.

Qu Hong's View: While the legislative process in China can still be characterized as opaque, this “consensus-based decision-making process” is gradually becoming more open and comprehensible. However, without a systematic approach on policy monitoring and broad engagement with industry stakeholders, it’s still challenging for the corporations to effectively feed into this process.

Lobbying is a sensitive term within China’s context, since the government is concerned about being influenced or being perceived as influenced by the interest groups, particularly by Western MNCs, during the policy making process. Therefore the policy and regulatory advocacy in China needs to be conducted in a much more subtle and sophisticated way.

Effectively garnering influential third party support, or third-party coalition building, can be the most effective manner in which to build credibility amongst government stakeholders and generate a much more valuable and respectable long-term return on investment. Identifying third-party stakeholders such as national think tanks, industry associations, and respected members of academia that concur with your perspectives and position on legislative or development issues will provide an MNC with opportunities to convey its messages in a non-direct manner that government stakeholders may be more open to.

In this way, an MNC’s share of voice is strengthened through its coalition with respected third parties in a way which is respected and acknowledged by government officials and leads to more tangible, sustainable long-term results.

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PANEL MEMBER: CATHERINE VAN WAY

CATHERINE VAN WAY is executive director of government affairs for emerging markets and businesses for Cummins Inc. in Beijing. Responsible for government relations in China, India and Russia, she was previously Counsel to the Committee on Energy and Commerce for the US House of Representatives. She is a graduate of Tulane Law School in New Orleans, Louisiana and the University of Southwestern Louisiana

Catherine Van Way's comment:

For years multi-nationals have been advocating for more transparency in the development of new laws and regulations in China.  It is encouraging to note that to a certain extent that is now happening.  The State Council and the various ministries are more often releasing for comment, draft proposals of laws like the recent Labor Contract Law and Anti-Monopoly Law.

So the question arises – now that we have more of a view to what the government is working on: is traditional lobbying, as we understand it in the West, effective, and or advisable?

For many, the answer is increasingly becoming “yes”.  Although the tactics may vary from Ministry to Ministry directly contacting government players to let them know of your interest in a particular law or regulation can be very effective.

When doing so, it is also important to follow the basic “rules” of lobbying.  Cast a wide net – contact everyone you think might be in the decision-making chain.  Understand the government’s objective – and frame your interests in those terms. 

Know your opposition – inform government stakeholders of what the “other side” is likely to say before they do – and have a good response.  And always be scrupulously honest – a lobbyist who has a reputation for always telling the truth, regardless of their interests, will be someone who is always welcome in government offices.

The fast-growing government affairs field is testament to the belief that the Chinese government is interested in hearing from the outside and, more importantly, becoming responsive. As the lobbying “industry” develops in China a new question will arise:  should the industry itself become more transparent? 

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Commenting soon:
Yuan Haiying, Yuan Associates
Christian Murck, APCO Worldwide
Qu Hong, Burson-Marsteller China

This month panel member Frank Lavin offers and extended view on China's tyre industry lobbying in the US. Click here to read it in full

The members of the recently convened PublicAffairsAsia Government Affairs Forum have appeared on a live Chinese national radio programme.

The 50 minute roundtable debate, broadcast on China Radio International's "Today" on Beyond Beijing programme, opened with a short interview with PublicAffairsAsia executive director Craig Hoy before a wide-ranging discussion with the top-level panel members.

The panel offered senior practitioner insight and opinion on China's rapidly changing public affairs and government relations industry - covering issues including the role of think tanks, private sector consultation and media relations.

      I  To listen to the panel discussion follow this link  I