Monday, 11 July 2022

Our relations with China have

taken a turn for the better - if you believe the Chinese.

The Foreign Minister in the new Downunder government is of course of Chinese heritage even if she was born in Malaysia. Maybe that helps too.

But let's be quite clear about it. What really helps is that China sees the new government as being much closer to China in terms of ideology. They also perceive the new government to be weaker and more malleable.

That may or may not be the case. It hasn't really been tested yet but I have been told that this is what China wants to believe. They consider the new government to have "values closer to ours".  They also believe "it will be easier for them to understand how to do business". That is of course how to do business on Chinese terms. It is not the same as doing business with America or France or Finland...or just about anywhere else - including some countries in Asia. 

I know of more than one person here who has business interests in China - and wish they didn't need them. They do business with China because they must. The Chinese market is enormous but if they could find another market as big they would go there instead. There are simply too many difficulties doing business with China. Not only do they have to go through all the stated rules - and they are many - they have to go through all the unstated rules. There are laws about where and when and how things must happen and who you need to go through and what permissions must be obtained from which departments. All that is understandable to a degree but it is also complex. As someone once put it to me "the rules about the length of a banana for the European Union are nothing compared with the size of a mere label in China" - and yes, they are just about as silly as that bit of nonsense. 

But it is the unwritten law which is so much harder to understand. It is about things like not approaching the wrong official or the wrong person within a company. It is about "paying" someone - and how much you pay them. Do you pay them again if you do business again or is that a one-off? If the delay occurs at their end then are you responsible for the "fine" or is the Chinese company which causes the delay responsible? (You can however be pretty sure you will be held responsible.) 

The Chinese believe they have the upper hand in all this. They actually do have the upper hand in many ways. Breaking a contract with someone outside China is not seen as a breach of the law but rather as smart business practice. It isn't something done inside the country so much but, if they can find a way of doing it elsewhere, this is the way it is done. They genuinely see no problem with it. It has been this way ever since China did business with the rest of the world. 

I am sure our new Foreign Minister is aware of this but she is not going to say it. Her argument will be that we need to do business with China - and we do. 

So relations will change perhaps - on the surface. Those here attempting to do business there will be relieved that things are back to "normal". In reality nothing much will have changed. The new government will have to tread carefully so as not to make matters any worse than they are now. Chinese officialdom will take instant advantage of any weakness.

Doing business with China is not easy - but it is a very big market.


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