By Haiying Yuan and the Chinese Government Affairs Committee

At this year's AmCham China Chinese Government Affairs Committee Annual Conference, Haiying Yuan, President of Yuan Associates, delivered a keynote speech on the role of government affairs. Here is a translated and condensed version of his remarks:

The concept of government affairs in China dates back to over 2,000 years ago. The classic work Zhan Guo Ce (Strategies of the Warring States) contains vivid accounts of how ancient Chinese dealt with government affairs, and praises those who assist and give wise counsel to the emperor, thus helping to avoid crisis and destruction.

Today, when we talk about government affairs, we mean a special domain for serving multinational corporations (MNCs). Over the past two decades, the Chinese government has changed its expectations for MNCs. In the 1990s, the government attached great importance to capital, employment and taxes offered by MNCs; in the early 21st century, it expected MNCs to share advanced technology and management experience; now, it hopes MNCs will adapt to the “New Normal” and work with China to strive for a win-win outcome.

Given the importance of the Chinese government in the Chinese economy, government affairs is essential rather than optional. Our work began with establishing relations with the government. As the Chinese Government Relations Committee, our purpose was to stop non-professional backdoor practices. We worked hard to familiarize ourselves with the Chinese government and its formalities to clearly target our efforts. As an important innovation, we introduced the annual appreciation reception to establish and maintain fair relations with central government authorities.

In this early phase, our teams focused on “firefighting” to resolve challenges that impacted operations including labor relations and intellectual property  protection. Realizing that there were some fundamental policy issues underlying these fires, policy gradually became our focus, leading us to rename ourselves the Chinese Government Affairs Committee. To communicate with the government on a collective basis, companies needed to first communicate with each other. So we helped organizations engage in effective communication and put together documents that the Chinese government recognizes, such as the AmCham China White Paper.

What will Chinese government affairs be like in the next five years? I expect the following trends to arise:

  1. ΠAn important part of government affairs will be to cope with market regulations and assist with antitrust and anti-dumping enforcement.
  2.  Local government affairs will play a more important role.
  3. Ž Universities will offer more specialized courses on government affairs.
  4.  Anti-corruption efforts will be become institutionalized and standardized, leading government affairs to focus on coordinating policies with Chinese governments at all levels and to incorporate standardization internally.

It took us 20 years to break the ice, open the road and experiment with the professionalization of government affairs. With another 20 years’ efforts, we may realize the true professionalization of Chinese government affairs.