I have been practicing international law for so long that I can understand English language lawyer emails from just about anywhere in the world, pretty much no matter how poor the English. I love getting an email in Kanglish (Korean-English) or Chinglish (Chinese-English) and showing it to someone else who has absolutely no clue what it means and then explaining it to them. Well you see, “maybe” in Kanglish means “no way” and “we can do that” in Chinglish means “very unlikely.” You get the point.
I feel the same way about reading the China Daily. It takes years with that newspaper to be able to cull out the inner meaning of so many of its articles and I consider myself somewhat of a master at it.
The China Daily story (h/t China Hearsay) that has precipitated this post is entitled, “No discrimination over China contracts, and it fits into the following common genera (plural of genus) of China Daily stories:
- Me Thinks Thou Doth Protest Too Much/Stopping the Buzz. This is the China Daily article that comes out after weeks or months of rumors about something that is completely true. The point of this article is to seek to disprove that which everyone either knows or will soon know.
- Too Categorical to be True. This is one of my favorites because one knows instantly from the title that it just cannot be true.
This China Daily article notes “rising complaints from major trading partners that foreign companies are being treated unfairly in China’s huge and rapidly growing public procurement market” and then dispenses with them by quoting a Peter Duncan who tells us that “I don’t see discrimination against the foreign in government tenders:”
Duncan and some other foreign business people who have been working closely with their Chinese partners and clients have a rather different perception.
They say they suspect the perception of “unfairness” stems from a misunderstanding of the rules and the less obvious nuances of doing business in a different culture.
Duncan says that the experience of his company in China can help ease foreigners’ concern about the complicated rules.
I ain’t buying that and here’s why.
For years, I heard almost nothing about this sort of discrimination from our American clients who sold goods and services into or in China. But in the last three to five months, I have been hearing so many complaints that I am thinking that someone or something from on high in Beijing has issued some sort of directive. What I am mostly hearing from our clients who sell to China from the United States is that if they do not form a Chinese entity the SOE (State Owned Entity) to whom they have been selling their product or service may have to stop buying from them. I am also hearing from a few of our clients who already have entities (WFOEs) in China that some of their SOE customers are suggesting business woudl be better if they were to go into a joint venture with a Chinese company.
The companies from whom I am hearing these things are not inexperienced in China, as the article implies we should expect them to be. Rather, they are some of our most China-experienced clients and they (and a bunch of other people) are talking about this now because they are seeing and feeling the difference.
It is getting to the point where I am telling people that if you want to sell goods/services to Chinese SOEs the best way to do so is through a Joint Venture, the next best way is via a WFOE and the third best way is via a foreign (U.S., Hong Kong, or whatever) entity. Nothing has changed on this but whereas the gradations between these three methods was fairly low last year, they sure seem a lot larger now.
What are you seeing/hearing out there? Who do you trust, my clients or the China Daily?
UPDATE: The Associated Press has come out with an article, entitled “Survey: China treating foreign companies unfairly” (h/t China Hearsay). The article refers to a just released European Chamber of Commerce report in which “43 percent of 598 European companies that responded to a survey see Beijing discriminating against foreign businesses, up from 33 percent in a similar survey last year. It said 46 percent expect the problem to get worse over the next two years, up from 36 percent last year.”
I knew I wasn’t just imagining this.
