China moves beyond guanxi but not compliance peril

The US-China Business Council (the “USCBC”) recently released a Government Affairs Report (the “Report”) which focuses on conducting government affairs activities relating to China. As with  other USCBC publications, the Report draws heavily on the actual, on-the-ground activities of USCBC member companies. The USCBC has again consented to the circulation of the Report  among the FCPA community.

The main subdivisions of the Report are: Government Affairs Team Structure; Government Agency Engagement; Domestic Industry Association Engagement; Think Tank and University Engagement and State-Owned Enterprise Engagement.

There was a time in the not too distant past that a discussion of government relations in China began and ended with an understanding of guanxi (personal relationships). While guanxi remains important, the Report confirms that things have become much more complex and sophisticated. The Report also confirms that China remains a perilous venue for the conduct of government affairs activities, if only because of the presence of foreign officials in so many arenas. Think tanks, universities, domestic trade associations and state-owned enterprises all present compliance challenges. China’s own anti-corruption campaign has also had an impact on many areas. The Report touches on many of these questions and provides useful insights into what responsible companies are actually doing.

The Report is available here and is presented under cover of the USCBC’s own article about the Report, which links to the full Report.

The USCBC is generally regarded as the premier association of U.S. companies doing business in China. It has existed without interruption since 1973. Although the USCBC’s member companies are of all sizes, its members include some of the largest and longest established companies doing business in China and its Board of Directors over the years has been a virtual who’s who of corporate America. Further information about the Council is available on its web site https://www.uschina.org.

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Benjamin P. Fishburne, III practices law independently and has been a partner in several major international
law firms. He is a former Assistant General Counsel and, later, General Counsel of the US-China Business Council. He can be reached at [email protected].