Costa Coffee, PCP Beijing
The Economist does a superb write-up (“Join the Party,” May 6th) on China’s growing effort to unionize the China staffs of multinational companies in China. Most apt is the magazine’s recommendation to the leaders of MNCs: accept unionization as inevitable.
The New Reality in China is that the nation’s leaders see the participation of foreign companies in as less and less vital to China’s economy. (I respectfully disagree with them – I think the importance is changing, but not declining, but leave that aside for the moment.) If foreign enterprises aren’t being tossed out of China, the government is determined to strip away the special operating conditions to which companies from overseas have grown to feel entitled.
We are in for a long sequence of these measures. Tax holidays, special services, foreign enterprise service companies, and the other explicit and implicit special conditions afforded to foreign enterprises are all being pulled. And with them are going many of the special privileges foreign individuals have enjoyed over the years.
The best we can hope for is equal treatment with local enterprises, but I suspect that the direction of the pendulum is going to take us into discriminatory territory: the government is going to be tougher of foreigners than the locals, and this is going to have personal, commercial, economic, and political ramifications.
The “good old days” aren’t coming back. Ever.
But that doesn’t mean China should be permitted to discriminate against foreign enterprises in violation of its international commitments and, more importantly, its own enlightened self-interest. It does mean that we are now going to have to start making a consistent and convincing case for a long-term role for foreign enterprise in China, and each enterprise is going to have to make its own case to be allowed into China, or to be allowed to continue operating here.
The extent to which this case comes from credible local voices rather than indignant foreign sources will determine its palatablity to local leaders and to the Chinese as a whole, and will thus determine its success. This means we have a profoundly challenging effort ahead of us.