By Jack Perkowski 

From time to time, MTD readers write to me directly for advice. I received the following e-mail from a Korean manager who is a new arrival in China that I thought I would pass along:

Dear Mr. Perkowski,

I read your excellent book, Managing the Dragon, which gave me a lot of inspiration. I think it is a must read for anyone who wants to come to China to do business. I am a Korean and was newly assigned to China to work for a Korean company. One question I have is how to make good relationships with Chinese government officers. I can drink a lot of Chinese spirits (white wine), but I don’t think that’s the only way. In your book, you did not mention too much on this. Our project in China needs critical support from the local Chinese government.

I would really appreciate it if you could give me some advice. Thank you very, very much…

My Korean friend is, of course, correct. Drinking baijiu — and sometimes plenty of it — is often necessary, but being a good drinker alone is not enough to build good and lasting relationships in China. In these more difficult economic times, having strong relationships with the local governments will be more important than ever. So, what else can be done?Before discussing specifics, keep in mind that establishing a level of trust with your Chinese counterparts should be your overriding long-term goal. When I first came to China, everyone emphasized the importance of “mutual trust.” In fact, it was said so many times that I began to think of it as a platitude, just like motherhood and apple pie. “Of course,” I thought to myself, “who could possibly be against ‘mutual trust’?” The longer I’m in China, though, the more I appreciate the wisdom of that advice. Once a level of mutual trust is achieved, life becomes a great deal easier. Mutual trust is not something that can be achieved overnight. It takes years, but it’s important to get started right away. How do you do it? It’s simple, do what you say you are going to do, and treat your partner with respect, openness and candor. If you do this consistently over a long period of time, mutual trust will follow.If you are in a joint venture, establishing a good relationship with your Chinese partner is an important first step to creating good government relations. Although your Chinese partner is a separate legal entity, it may actually be owned or controlled by a local government in China. As a result, the head and key members of your partner may serve at the pleasure of the local officials. A good relationship with your partner, therefore, will extend to them. In the joint venture where we have had the most success, our Chinese partners are our biggest cheerleaders.

When meeting with the Chinese government, don’t be shy about describing in some detail the benefits your company is bringing to the community, including investment and job creation. These must be constantly explained and emphasized. In the early days, we didn’t do this very effectively. As a result, the local governments didn’t know much about us and were not as proactive in helping us solve our problems. Even though they are very likely aware of your every move, make it a point when meeting with Chinese government officials, no matter how junior, to give them an update on your current activities in their city.

In either a joint venture or a wholly-owned foreign enterprise (WOFE), one of the prime responsibilities of the general manager is to develop the relationship with the local government. This can help the general manager to deal with the many daily issues that can arise when running a company, but it also paves the way for more senior members of management to address the bigger issues as they come along. Having good, local Chinese managers who instinctively understand the importance of this is the best way to ensure a good result. If the general manager happens to be an expatriate, I recommend hiring a local Chinese government relations manager. Retired government officials can work very well in this role, as can the young Chinese translators frequently charged with promoting cooperation with foreign companies. Either will know all of the right buttons to push — and how to push them — in a way that no foreigner ever can.

Visits by senior officers to the joint venture or WOFE present ideal opportunities to raise the company’s profile with the most senior government officials, and can move its agenda forward. Before any meeting between your higher-ups and government officials, you or your general manager should brief them and underscore the importance of particular items. Before the meeting, give them a script — tell them exactly what they should say and ask for. A few words from a senior headquarters official can lend gravity to all of the work that has been done behind the scenes at the lower levels.

Finally, don’t forget the small things — a message of best wishes at China’s Spring Festival, a small gift to commemorate a special event, sometimes just a word or two of thanks in recognition of a special favor that the government has done — can do wonders. Here again, a local government relations officer will be attentive to the ways in which showing respect through these seemingly small gestures goes a long way in China.

Jack Perkowski, Managing the Dragon