Wednesday, June 24, 2009

Government Relations

Unlike USA, China is continuing its policy reform, especially in the area of economy. Usually, government would guide organizations. Bus sometimes, government would rely on organizations. Especially when new policies come out, government would need the cooperation from organizations. Therefore, in China, government relations seem to be more important to companies than in USA. Sometimes, an dynamic interaction with government would even create business opportunities which did not exist before.

Life Experience Example

Gaea Gem is a business group which regards rice production as primary business. It is the largest organization in my hometown in China. My mom used to work for it, dealing with government relations. Because of the nature of farming business, the coordination with government has great influence on the corporate performance. Several years ago, the company planned to start a manufacturing plant to produce rice derived food product. And this plan soon got approved by the “pro-growth” government. However, some problems delayed to construction progress significantly. Those problems were with the land. Part of the Gaea Gem’s target land had already allocated for other purpose in previous government development plan. Therefore, the company needed to coordinate with different departments in government. Without any material progress for nearly half a year, the company appointed a manager who used to hold a senior position in government to take in charge. Due to the manager’s previous government working experience and good relationship with political leaders, he managed to solve the land problem. And the company was able to move on.

Here is an interesting article about lobbying in China: