China and the East-Asian market have been widely discussed in the business world for a long while. The increasing importance of the New Silk Route project gives further momentum to the debate. But how do you do that? Which parameters should you pay attention to? How do you handle cultural differences?
Stefanie Weil, Academic Director of Euro China Business at Antwerp Management School, describes in her book Lobbying and Foreign Interest in Chinese Politics the impact of Western companies on China’s political system. She portrays how Western companies do business in China and shape China’s business environment on their behalf. Her book presents comparative results on distinct business cultures, not only between EU and US but also between differences of the Western and Chinese way of doing business.
Lobbying in the Chinese political system
In the first part of her book, Weil lays out the difference between lobbying of Chinese and Western companies. China’s policy process is fragmented, which constraints pure top down policy making. That in turn impacts the way Western and Chinese companies can influence business decisions. They can navigate between the cracks of the decision-making system. Whereas this way of policy bargaining is most efficient for Chinese companies, Western companies struggle to gain access to Chinese policy makers and institutions. As a result they rely on their networks with EU/US policy-makers and opt for the transnational route to shape China’s business environment on their behalf.
As foreign interest groups, as one vehicle to influence the business environment, stand outside China’s state-corporatist system, they are able to rely on lobbying strategies they are accustomed from the West. State-corporatism is the system how China’s authorities steer interest groups. In a state-corporatist system interest groups are established top-down with a clear mission to implement and support domestic policies. In contrast, in democratic systems, interest groups are established bottom-up to support membership needs and to actively lobby on their behalf. Having said that, Western groups in China are able to organize their interest groups along membership needs.
"For Western interest groups, it is important that they frame their story in a positive way and that they try not to act too intrusively or pushy."
This means that they can lobby on behalf of their members, a strategy that is counterintuitive in China’s state corporatist system. Still Western groups cannot ignore Chinese culture when engaging with the government completely. For Western interest groups, it is important that they frame their story in a positive way and that they try not to act too intrusively or pushy. We can conclude that despite the interest groups having an increased freedom because of their independence of the Chinese State, they still have difficulties with searching their way in the Chinese network culture because of their radically different approach.
Weil tries in her book to inform about the role and power of foreign capital in China’s economy.
Is lobbying in China a success story?
China’s economic openness and the ability of foreign groups to interact with China’s political elites are growing, although the final decision-making power remains with China’s ruling party. However, local political elites can exert influence over policy implementation. This also creates opportunities for foreign groups to play a more active part in the decision-making process.
"Policy negotiations in China primarily remain behind closed doors"
Via hearings and letter-writing campaigns, the government became more approachable, but that entrance is limited as the response time is often too short which causes many doors to opportunities to close. Policy negotiations in China primarily remain behind closed doors rather than allowing outside actors to influence policy results. This is a clear negative point for Western lobbyists. Nevertheless, Western groups have achieved to alter policies via transnational lobbying.
There is no clear answer to whether lobbying by Western groups is a success story. What can be said is that due to Western pressure the Chinese government altered a number of business policies. Stil foreign interest groups lobbying in China are relatively rare, with only a few business groups actively engaged in the policy fight. Secondly, foreign groups often rely on external support from their home policy makers to successfully alter policy.