BIG BUSINESS AND INDUSTRY ASSOCIATION LOBBYING IN CHINA: THE PARADOX OF CONTRASTING STYLES

Abstract

In spite of China's continued authoritarian political system, there is growing recognition that business lobbying is an integral part of the country's policy process at both the local and national levels. As thousands of economic regulations and laws have become key determinants of the fate of industry, all types of companies - state-owned and private, Chinese and foreign - have become active in every stage of the policy process, from setting the agenda to identifying policy options and shaping regulatory implementation. Whereas interacting with officialdom used to be the responsibility of an enterprise's senior leader, it is increasingly common for companies to have a defined position or team in charge of government affairs. ' The number of trade associations representing domestic and foreign companies has grown rapidly, with the greatest expansion recently seen in the proliferation of branches of municipal chambers of commerce outside their home localities (yidi shanghui (ProQuest: ... denotes non-USASCII text omitted.)). 2 Chinese Mainland scholars and journalists previously only used the term "lobbying" (youshui (ProQuest: ... denotes non-USASCII text omitted.)) to refer to the behavior of companies in capitalist countries or multinational companies (MNC) in China, but it is now associated with domestic companies' behavior at home.3 The discussion of "interest groups" (liyi jituan (ProQuest: ... denotes non-USASCII text omitted.)) is even more common.4 Not only has engagement of officialdom risen but, equally importantly, there is growing sentiment that lobbying pays off. Policies for different sectors and the broader economy have been shaped by corporate influence.5 In some sectors, such as energy, it appears that the basic trajectory has been determined less by a coherent government plan than by companies who have manipulated the government to adopt policies consistent with their interests.6 Lobbying affects both domestic and foreign economic policies, and companies lobby successfully for greater protection from imports and for increased liberalization.7 Nevertheless, although we know that industry is active and shapes policy, there is much less information about how industry engages policymakers. Companies lobby, both directly and through associations, but we have only a rudimentary knowledge of the actual strategies and tactics which they employ and of their rate of success. Some observers have emphasized the importance of personal connections (guanxi (ProQuest: ... denotes non-USASCII text omitted.)); but guanxi can be manifested in multiple ways.8 Recent private-sector analyses report that guanxfs currency is less valuable than in the past.9 Yet if so, what other tools are being utilized? Do different kinds of companies or associations engage government differently, and with different results? This article takes a step forward in developing a more comprehensive and systematic way to analyze business lobbying in China to increase our understanding of the tactics and strategies which companies and associations employ as they seek to influence national Chinese public policy. In so doing, we adapt the theoretical framework and methods used to study corporate political activity in advanced economies to the Chinese context. In particular, we report the results of recently conducted surveys of very large companies and national industry associations in China about their lobbying strategies vis-a-vis national government economic policies. The findings indicate surprising commonalities in lobbying behavior across a wide variety of companies, yet identify equally unexpected differences between companies and business associations. In the next section, we review the extant research on government-business relations in China to identify progress to date and the reason for continuing gaps in our knowledge. We then outline our research strategy, with a description of the overarching framework, the design of the surveys and the composition of the sampled companies and associations. …