I have also found that local Chinese politicians are much more interested in economic development than local politicians in the United States. I have many meetings and meals with mayors and vice mayors in China who want to attract our company’s business to their city. In America, by contrast, I had to call in a favor from a friend to get someone to return my phone calls from the economic development department of a city where I was considering an investment.
Interesting blog post in the Times, although it’s a bit all over the place. Looks like someone edited it poorly. Anyway, as to the question whether the U.S. does a crappy job on local economic development, I’m not sure the comparison is a fair one.
I suppose that from a very high-level look at local officials, one could say that PRC folks are much more responsive, even if the actual red tape is sometimes about the same (the author uses California as an example).
So fair enough. However, this is not surprising when one considers that economic development (i.e., investment) is a very significant determinant of performance of a local official in China. If growth sucks, you could be out of a job mighty quick.
In contrast, while local officials in the U.S. certainly do their fair share of wining and dining companies in order to secure jobs, there is no direct relationship between success in investment and victory at the ballot box (I’m assuming an elected official for the U.S.). If a politician attracts a lot of new jobs and is able to publicize that fact during an election, then this can be important. But if she instead focuses her campaign on an issue like immigration or property taxes or any number of other things, then economic development/investment is pretty much irrelevant.
I suppose my major point here, that the U.S. and China governments are different, is painfully obvious. The more interesting issue relates to the U.S. political meme of “red tape” as a symbol of government regulation. This topic has been a hot button issue for the Republicans for decades and is, I suspect, the reason why this blog post is on the Times’ site in the first place.
I’m rather sensitive to this topic myself in my professional capacity, since I am currently responsible, among many other things, for corporate compliance in jurisdictions all over Asia. While I am no expert when it comes to red tape in my home state of California, I do know a thing or too about many other jurisdictions, including China.
So is it true that red tape in California is on par with requirements in China? If yes, should we agree with Republicans that California is a Communist state?
Um, no. If California and China are on par with company registration requirements, for example, I would bet that is just evidence that things have gotten easier here in China over the years (which is the case, by the way). In most industries, it’s definitely cheaper, quicker and generally easier to set up here than it used to be back in the old days. That’s a great thing.
Is California more heavily regulated now than it used to be? No idea, but if it is, perhaps at least some of that regulation includes responses to important issues that we (as a society) used to ignore or perhaps did not even exist until recently. At the same time, yes, I would not be surprised if some of those rules are ridiculous and should be axed. But hey, governments ain’t perfect. And you know, having a few old or unreasonable rules does not make a state Communist.
Let’s also not forget that China has gone through its own problem of under-regulation. I’ll cut that discussion short with two examples: food safety and pollution.
One final point. I’m not really sure that local government responsiveness to potential investors is a great metric to strive for anyway. What are some of the tools at their disposal in attracting firms to their state/locality? In the U.S., it’s predominantly tax breaks, zoning waivers and similar goodies. Not always such a good thing for the rest of the citizenry, unless you are one of those folks who think that if someone wants to set up shop and employ local residents, the government should be empowered to essentially give them anything they want, local tax base be damned.
I’ve certainly seen that mentality in action here in China. It’s called corruption (also something that goes in with local deals in the States, of course). Here it’s mainly to do with land transactions, and the central government has cracked down on such practices in recent years for a variety of reasons. If anything, local officials here in China need to be, at least in some ways, less responsive to the [improper] demands of the business community.
Responsive government officials and less red tape — good things, I will readily admit. But please, everything in moderation. And let’s not hold up China’s investment policy as something California should emulate; there might be a point to be made there, but I suspect the subtleties will be ignored by most readers.
© Stan for China Hearsay, 2014. |
Permalink |
No comment |
Add to
del.icio.us
Post tags: red tape, regulation, tax policy