Interacting With China’s Government

Jack Perkowski: First of all, most people think that; people spend a lot of time in Beijing with the Central Government because they think, okay, the way China works is you’ve got these guys on top in Beijing and then whatever they say kind of goes into the provinces and the cities. That doesn’t work that way. China is actually very decentralized. And so, while you can have these great relationships in Beijing, which can maybe help you in some way or another, they never really get you to where you want to go. What you really need to do is develop those relationships in the local level. So, today, I would spend very little, almost no time with the Central Government, very little time with the provincial governments, will spend all my times with governments with the local governments.

So we got 17 factories in 8 different provinces in China. We tend to be in a lot of the inner provinces and a lot of the smaller cities in China. We tend to be one of the best employers in that city, so we become very important to that city. And I’m a big proponent of the big fish in a little pond theory where if you go to a city of 600,000 people which isn’t a big city there, it’s a small city. If you go there and you’re the best employer in town, you get a lot of attention from the local government.

So what we’ve learned to do over the years is to really, first of all, make sure the local government understands everything that we’re doing, and what we’re doing is good for the community, and then working with them. And you’ll be surprised how much they can help you.

Our piston ring business is located in a city called [IB] which is about 4 hours from Shanghai. And every time I go, the Party Secretary comes out to meet me and takes me to dinner. This one time I went there, he couldn’t wait to see me. He couldn’t wait to take me to dinner to tell me that they have been working for 6 months to get our joint venture, a $2 or $3 million tax refund. I don’t even know. None of our people really knew that we were eligible for it. They didn’t tell us they were working on it. But they just went ahead for 6 months to get it because they thought it’ll be good for the joint venture. And of that money that came back, two-thirds of it came from the provincial government, but one-third came from the city’s pocket.

So they actually turn back money that they had taken, rightfully so, and taxes, and they got it back to us by some special tax refund provision.

That’s just blew me away, because here, they didn’t tell us about it, we didn’t know they were doing it, we didn’t ask them to do it, but they knew it’d be good for the joint venture if they can get us that money. So that’s the kind of relationships that we’ve been able to develop. And that’s what’s possible in China.

 

Recorded on: September 22, 2008

 

Despite Beijing’s apparent officiousness, control of China is not centralized.

Related Articles
Playlists
Keep reading Show less

Five foods that increase your psychological well-being

These five main food groups are important for your brain's health and likely to boost the production of feel-good chemicals.

Mind & Brain

We all know eating “healthy” food is good for our physical health and can decrease our risk of developing diabetes, cancer, obesity and heart disease. What is not as well known is that eating healthy food is also good for our mental health and can decrease our risk of depression and anxiety.

Keep reading Show less

For the 99%, the lines are getting blurry

Infographics show the classes and anxieties in the supposedly classless U.S. economy.

What is the middle class now, anyway? (JEWEL SAMAD/AFP/Getty Images)
Politics & Current Affairs

For those of us who follow politics, we’re used to commentators referring to the President’s low approval rating as a surprise given the U.S.'s “booming” economy. This seeming disconnect, however, should really prompt us to reconsider the measurements by which we assess the health of an economy. With a robust U.S. stock market and GDP and low unemployment figures, it’s easy to see why some think all is well. But looking at real U.S. wages, which have remained stagnant—and have, thus, in effect gone down given rising costs from inflation—a very different picture emerges. For the 1%, the economy is booming. For the rest of us, it’s hard to even know where we stand. A recent study by Porch (a home-improvement company) of blue-collar vs. white-collar workers shows how traditional categories are becoming less distinct—the study references "new-collar" workers, who require technical certifications but not college degrees. And a set of recent infographics from CreditLoan capturing the thoughts of America’s middle class as defined by the Pew Research Center shows how confused we are.

Keep reading Show less