My friend and fellow lawyer Stan Abrams just did a thought provoking post, entitled, Comparative Red Tape: China vs. U.S. To grossly oversimplify it, its thesis can be summed up as follows:
I suppose my major point here, that the U.S. and China governments are different, is painfully obvious.
But it really is a more complex than that.
The post starts out citing an article that quotes someone saying that it is easier to get help from a China bureaucrat than from an American one. When I saw that, I immediately got irritated, because though true, there are all sorts of reasons why this is the case, and most of those reasons in no way reflect badly on American bureaucrats.
Stan then compares California to China and notes how much faster and easier it is to register a company in California than in China. One can form a U.S. company in less than an hour, whereas forming a China WFOE typically takes months.
Where I really see the difference between California and China bureaucracies is the different role government plays between the two countries (yes, I know California is a state and not a country, but work with me here people). China’s bureaucrats are tasked with increasing investment, foreign or otherwise, and their pay/bonuses can reflect how well they do that. American bureaucrats are mostly tasked with staying out of the way of incoming business.
One way I can explain the difference is the way we lawyers deal with a Chinese bureaucrat versus a US bureaucrat, and the differing expectations we have of them. Let’s take employment law as an example. One of our China lawyers, Grace Yang, has been writing extensively on here regarding China employment law, including the following just this month:
- How To Terminate A China Employee Non-Compete Agreement. Very Carefully.
- Social Insurance For China Expats. It Depends.
- China Non-Competes. Oh, Oh, The Price You’ll Pay
- China Employee Probation: Don’t Let It Slip Away
Without going back and checking these posts or checking in with Grace, I can still state with confidence that she spoke with Chinese government officials regarding all of the issues in the blog posts above. I know this because she dealt with all of these issues for real clients and before we report back to our clients on labor law issues we pretty much always those issues with the local labor department in addition to reviewing the written laws.
Chinese bureaucrats are pretty much uniformly willing to tell you how their agency handles particular matters and they will do so without your having to reveal the name of your client. The bureaucrats simply view helping clarify Chinese law as part of their job. This is generally a good thing.
The opposite is the case in the United States. If you go to a US court clerk’s office, you will probably see a sign making clear that the clerk is not able to give any legal advice. I am not aware of other government agencies in the U.S. with similar signs, but the sentiment is for the most part the same: if you don’t know the answer, hire your own lawyer and figure it out, our job is not to figure out anything for you. Businesses get help from private sources, not the government. Citizens should not be subsidizing businesses. This is not necessarily a bad thing; it is the American ethos.
Where you really see the difference between the US and China is in foreign investment, which is the focus of Stan’s post. Chinese companies come to the US expecting trade agencies to help with all sorts of legal matters, but they virtually never do. On the flip side, when we tell our clients that we will be sending one of our China lawyers to talk with someone at a government office regarding a law or a problem, our clients sometimes become concerned that we might be doing something illegal. We explain that what we are doing is not only perfectly legal, it is normal for China and not to do so would be bad lawyering.
What have you seen out there?