Extra! Extra! Press freedom, flu$hing and river dolphins

hey peijin, i think the carlyle group link is wrong, do you care to hook it up?
thanks

I've been using a combination of emails (I get their email addresses off of chinese company websites) to inform them about books like "David Copperfield" and "Silent Spring" as well as the US CAA, US CWA and US NEPA and European equivalents as being a "hidden" reason that many foreign companies came to China...and not just the promise of "1 billion customers". And the worst part of all this? We all know that this is true, corporations miss the "good ole days" of the late 1800s to the mid 1900s when they could do and emit whatever they wanted.

Hard work does pay off.

Nanheyangrouchuan

http://www.chinalawblog.com/chinalawblog/2006/12/chinas_foreign_.html#comments

China's Foreign Business Blame Game
Posted by Dan Harris on December 2, 2006 at 07:41 AM
Discussion: Comments (5) : TrackBacks (1) : Linking Blogs : Add to del.icio.us
The Washington Post today (in its Sunday edition) ran an article, written by Elizabeth Economy, on how and why China is blaming foreign companies for China's own pollution problems. Entitled, "Blame Game China Needs to Stop," the article discusses how China is seeking to diffuse international criticism of its environmental record by "launching a political campaign that lays much of the blame for the country's mounting environmental problems squarely on the shoulders of foreigners."

I told you so.

Ten months ago, in a post, entitled, "Is China Going Green? -- Part VII -- Doesn't Matter Because You Should No Matter What," I wrote on how "people often get very emotional about the environment and I can see Chinese citizens getting very angry at a foreign company whose units in China are less environmentally sound than their units in the United States or elsewhere." That day is now.

The Washington Post article notes "growing international and popular discontent over the country's environmental crisis," has led China's leaders to tap "into anti-foreign and nationalist sentiments to deflect attention from their own failures:"

In late October a top environmental official, Pan Yue, accused the developed countries of "environmental colonialism": of transferring resource-intensive, polluting industries to China and bearing as little environmental responsibility as possible. At the same time, a leading member of China's National People's Congress claimed that foreign companies were not only exporting their waste but also underpaying Chinese workers. When a Chinese nongovernmental organization released a list of 2,700 companies cited for violations of China's water regulations in late October, the ensuing media frenzy focused exclusively on the 33 multinationals, including 3M, Panasonic, PepsiCo and DuPont, and ignored the more than 2,600 Chinese companies similarly cited. Not surprisingly, Chinese bloggers have taken up the call, discussing the "eco-colonialist" policies of multinationals and calling for "eco-compensation." Even environmental activists who have worked closely with multinationals have accused these corporations of not practicing what they preach.

As the article notes, "scapegoating foreigners can be an attractive policy option."

As I have written previously, and as those doing business in China well know, forcing foreign businesses to abide by laws that either do not apply to domestic companies, or which domestic companies ignore, is going on across the board. Foreign companies are to unionize, while domestic companies are not generally required to do so. Foreign companies are to pay their taxes, while domestic companies often do not. Foreign companies must operate fully legally, while domestic companies typically need not.

So what's a foreign company to do? You can get Beijing to change its policies and become even-handed -- just kidding.

Or, you can come clean by following all rules. Register your company; the crackdown on this is already in full force. Pay your taxes. Do not pay bribes. Follow international environmental standards. In other words, forget about the so-called "Chinese way," as that never really applied to you anyway, and it certainly does not apply to you now. Complain all you like but the wise thing to do is to heed the advice of my co-blogger, Steve Dickinson, and start recognizing there is a "new paradigm," in town and you as a foreign business must abide by it.

For more on the Chinese government's distinguishing between foreign and domestic businesses, check out, "China Policy -- Let Mikey (Foreigners) Do It" and "China's Corporate Tax System to Become Unified -- Some Day."

See other posts in: Legal News
Comments
You bring up some good points, but I strongly disagree with the article's contention that there is a delibrate government orchestrated campaign to blame foreign MNCs for China's environmental problems. From what I see in the Chinese media and internet forums, the overwhelming majority of the discussion on environmental problems in China are focused on purely domestic issues and incidences. Yes, I'm sure there are xenophobic types in China that would like to blame China's environmental problems on foreigners, but their voices are very much insignificant right now. Pretty much all Chinese have intimate first hand experience with how pollution and environmental degradation is affecting their lives. They see how the waste water from the local factories are poisoning their local river and how the local power plant is blacking out the sky with their dirty burning coal. They are certainly not blaming the MNCs in Shanghai or Shenzhen for these things. As far as I see, this is very much reflected in Chinese media coverage and internet discussions of environmental issues.

With that said, I do agree with your points on the need for foreign companies to strictly follow Chinese laws and regulations even when it seems all the local Chinese companies are blatantly violating them. Chinese companies can consistently get away with these violations because they have built "special" relationships with powerful patrons. It's very difficult and expensive (in terms of money as well as time and effort) to build these "special" relationships even for the Chinese. For a foreign company, it is downright near impossible. Even if it is possible, would you really want to have the long term success of your China venture to be critically dependent on the "special" relationships that you have built with a few local officials who in a few years time will be transferred, retired, or otherwise replaced with new people with whom that you have no such "special" relations?

In a related note, a while ago I read a "where are they now" sort of story on the top Chinese entrepreneurs of the 80's and early 90's. In turned out that of these entrepreneurs, the overwhelming majority of them (something like 90%) are either in jail or have completely lost their fortunes through run-ins with the law. So even if you are Chinese, it's not a good idea to flaunt the law. You may be able to get away with it for a while, maybe even long enough for you to be really successful, but chances are eventually you'll stumble.

Posted by: Hui Mao | December 03, 2006 at 08:48 PM

Monsieur Guerel --

My attitude on these things is maybe yes, maybe no, but since these things are so difficult to predict, the only thing a business can do is to toe the line and that means obeying the law and doing the utmost not to pollute. Of course, I fully realize businesses have countervailing considerations, including, first and foremost, making a profit. So really all I am saying is that they must be mindful of the fact that, as a foreign company, they are the easy target and it is not good for profits to get shut down or heavily fined.

Posted by: China Law Blog | December 03, 2006 at 03:50 PM

davesgonechina --

Thanks for checking in. As always, you raise some good points. I too am a fan of Pan Yue, who I believe does very much want to clean up China's environment and is unafraid of being clear on this, even to domestic polluters. But that does not mean he is immune from pawning off too much of the problem on foreigners.

I completely agree with you that it is easier to go after the foreign companies, and why not? I am not aware of any country that isn't going to be tougher in enforcing its environmental laws against foreign companies.

I also completely agree with you that the smart foreign company avoids this by meeting the highest standards, not just Chinese standards, and certainly not the standards the domestic companies typically attain.

The article is a bit weak on evidence, but it completely jibes with what we have been seeing in all sorts of legal arenas.

Posted by: China Law Blog | December 03, 2006 at 03:46 PM

I fully agree with your opinion. While Chinese people cannot complain to their own government, they need to find a scapegoat. MNCs are the primary targets. It also shows that if the chinese people that foreign expats say they have a good impression about foreigners (except probably about Japanese), this impression is only superficial. Things can change very fast in China. History has proved it!

Posted by: Romain Guerel (French working in Beijing) | December 02, 2006 at 08:06 PM

Elizabeth Economy's article leaves me wanting. I take issue with her singling out Pan Yue. That guy does not pull punches when it comes to domestic polluters: see Der Spiegel 2005

http://www.spiegel.de/international/spiegel/0,1518,druck-345694,00.html

And I'd really like to see Liz's evidence for China's eco-bloggers picking up the anti-foreigner line. Most Chinese environmentalists, as far as I know, are going to be more concerned about things like overdrawing Beijing's water table, the Harbin disaster, massive individual coal burning in winter, and a whole host of other problems that they know all too well have nothing to do with MNCs. MNCs' will get labeled hypocrites if they don't match standards in their own countries in China, and that's more or less what they ought to expect. But I can't see average Chinese people buying the idea that foreigners are the reason Beijing is domed by smog, the taps don't work or the river is black. There's a difference between a campaign designed to convince Chinese people it's foreigners faults, and a campaign to equip Chinese people with rhetoric to use against lecturing, overbearing foreigners like Ms. Economy. This is a case of the latter.

The government is going to go after MNCs for another reason: because it's one of the only things they can do. How, precisely, would the government become even-handed? How would they crack down on the countless Chinese factories running coal furnaces, the countless Chinese homes that survive the winter on coal stoves, the growing water demand in Beijing as migrants flood in and the water tables go dry, the growing legions of car owners pumping out fumes? Those guys with the 30 year old trucks with no grill? The dumpling makers with the pot belly stove?

They can't. It's too big. In a way, the crackdown on foreign companies could be seen as protection. If foreign companies meet rigorous standards and have no violations as China's environmental problems grow, it'll be pretty clear who ought to be blamed.

Posted by: davesgonechina | December 02, 2006 at 09:32 AM