Feeling good: Key meeting boosts business
Print Edition
AS the curtain fell on a key meeting in Beijing on the rule of law, Israeli Yuval Golan, 29, felt good about his business prospects in what should be a more transparent and predictable China.
As CEO of Unique 1 Asia Creative Business Consulting Co in Haikou, capital of south China’s Hainan Province, Yuval has plenty of gripes and complaints about doing business in China. He wants approvals and dispute settlement to be dealt with in a way that he would recognize as fair and just.
According to the 2014 Business Climate Survey among members of the American Chamber of Commerce in China, inconsistent or unclear laws and regulations have been one of the top three business challenges over the last five years.
The regulatory environment has changed drastically in two decades as legislation has struggled to keep pace with the rapidly evolving economy. Understanding and navigating this legal labyrinth is a major headache for AmCham China members.
About 10 years ago, foreign business got their advice basically from one book, “One Billion Customers: Lessons From the Front Lines of Doing Business in China” by James McGregor.
The bestseller, once essential for anybody doing business in China, advised businessmen to pull whatever strings they could to evade local laws and regulations as “rule by law” instead of “rule of law” was the norm in a country obsessed by social connections.
Applying McGregor’s dubious wisdom today could be fatally misleading.
The rule of law
Last week, the 18th Communist Party of China Central Committee’s meeting laid out major tasks to “comprehensively advance the rule of law.”
There should soon be no need for string-pulling as the streamlining of administration and a negative list approach are likely to become law, not just to reduce business costs but to reduce the necessity for under-the-table deals and make these ambiguous practices substantially costly.
No informal mitigation of a sentence will be tolerated. Judicial cases must not be influenced by personal connections, favors or bribery. The judiciary will be completely overhauled, with the Constitution reigning supreme over a revamped legal system.
“The market is becoming more orderly and regulated, but high transparency and a standard market economy may take years to cultivate,” said Zhang Yansheng, secretary-general of the academic committee at the National Development and Reform Commission.
“We hope the laws and regulations will be applied in a logical and consistent manner regardless of time, place, or parties concerned,” said Greg Gilligan, AmCham China’s chairman.
He wants enhanced protection of intellectual property rights that will encourage entrepreneurs, support the private sector and promote high-tech growth.
AmCham China members are confident and optimistic foreign businesses will still have an important role to play in China’s reformed, rule of law future, he said.
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