The Winds Are a Changin’

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Hutong West
Staying awake for a conference call
2259 hrs.

In making the case that the business climate for foreign businesses in China is changing for the worse, I have been challenged by people I respect greatly to “prove” it. There is no shortage of large foreign enterprises doing well in the PRC, something I have to admit as a few of them are my clients. As such, it seems that the complaints of the various foreign chambers of commerce that there is a tilt against foreign companies should thus be dismissed as the groundless whining of a privileged and ungrateful elite.

Yet while there is no shortage of success among foreign companies in China, only willful ignorance would allow anyone to deny that the winds are shifting in China, and in Beijing in particular. A case in point comes from an article I read recently in The China Daily about how Unilever was slapped with an RMB¥2 million fine for making statements that caused panic buying of staples in some parts of China. Reading through the article, I was initially struck at how clearly the government’s case was laid out, and how reasonable the action seemed.

Then came this paragraph, completely out of context:

“Foreign companies get too many benefits compared to local companies, it’s time to make a change,” Pan Ping, a white-collar worker at a private company in Shanghai told China Daily.

I have lived in China too long to believe that this was an accidental inclusion, and I know too much about The China Daily to think this is some reporter or editor playing a prank. The China Daily is the English-language mouthpiece of the Chinese Communist Party. If the quote attributed to the worker was not a statement of policy, it was certainly a statement of position.

I have argued in these pages that despite all efforts to establish a consensus-based orthodoxy, neither the Party nor the Chinese government is not as monolithic as they are often portrayed. What articles like this suggest is that even if the government has not reached consensus about the future role of foreign companies in the Chinese economy, at the very least there are those in positions of power who question whether they have been too successful for too long here.

Be assured that the raison d’etre for foreign firms in China is one of the issues that will be addressed in the coming changeover in Party leadership, and is another reason why foreign enterprises, journalists, trade associations, and bloggers will be spending so much time reading the tea leaves in the coming months.

Zhao Mafan

I don’t know if you also checked the corresponding article in 北京日报,北京晚报,or other Chinese-language publications closely associated with the Propaganda Department and which toe the Party line. There are frequently nuances of difference (sometimes quite stark differences) from what the official English-language press publishes. The inwardly-directed “message” is just as important as the outwardly-directed one…..