Powers Play

Powers Play QM template.jpg

Patrick Powers’ tenure with international businesses in China has involved mounting challenging odds to solve problems and led him to his current position as the Head of Government Affairs for Rockwell Automation Greater China. After 30 years of experience in international commerce, government relations, and trade policy across Asia, Powers has already leveraged his business development skills and Chinese government expertise on the Board of Governors for AmCham China to catalyze projects and policy amendments that benefit both American business and China.

His China-focused career path began as a “student” in Taiwan, where he picked up the language primarily as a musician in clubs. His language skills brought him to Bechtel, where he was part of the China business development team, and then Occidental Petroleum, where he worked at the Antaibao Coal Mine, the largest joint venture in China in the 1980s. Following that, SHV, a global Dutch private firm recruited Powers, during which time he successfully got the first foreign national license for big box retail (SHV Makro) signed off by the Standing Committee when it was technically illegal for foreign firms to enter the retail market. After running a consumer goods distribution company in Vietnam and freelancing in Singapore, he returned to Beijing to serve as the Vice President for China Operations for the US-China Business Council.

Powers (far right) poses with his band Back Door in Ulaanbaatar, Mongolia, in June 1991

His career in government affairs was somewhat accidental. According to Powers, during the years he was doing business development as Chief Representative, companies never wanted to expend resources on hiring a government affairs staff member, so he ended up doing that work out of necessity. After being hired to resolve an insurmountable problem for a Canadian gold mining company, he was on contract to Cargill to provide senior-level Government Affairs support, and after spending time in mining services in Mongolia, he was hired for his first “official” government affairs job He explains, “All my jobs have come through personal networks, and for the government relations part, it was mostly through folks who decided that having someone with multiple skill sets was important.” Eventually, this path led him to his position at Rockwell Automation.

At Rockwell, Powers handles government affairs, public affairs, and works closely with sales and business development teams. According to Powers, “Foreigners who are government affairs specialists are rare in China now.”  He added, “It’s a very unusual government affairs job because, unlike virtually all my peers, I never worked for the government. I’m a commercial person who does government affairs, and I use the government as a tool to facilitate growth of the business.”

The Three Ps of Success: Persistence, Patience, and Personality

To be successful in government affairs, Powers says, requires studying and understanding government structure, function, and how agencies interact with each other. Besides that, “if you know how to talk to senior level corporate people, talking to a government is not much different.” Most importantly, you need the three Ps: persistence, patience, and personality.

With regards to the last P – personality – Powers stresses that, while government relations is not for introverts, even though it might sound like it’s all about long, serious meetings, it’s crucial to have fun with your work. “If you feel confident enough to talk to government officials and tell a few jokes, have a few laughs,” he explains, “It’s much easier to have an actual relationship with them when they understand that you’re trying to help them do their jobs better.”

Powers speaks at an AmCham China policy event at AmCham China HQ

Powers continues, “There's a lot of people, especially junior level government affairs staff, whose idea of government affairs is to go to an event, collect some business cards, get some photos and say ‘That’s government affairs, because I met so-and-so’. The best advice I ever got from a Chinese government official was when he said, ‘It’s not whether you know me, it’s whether I remember you. If I don’t remember you, I don’t know you or what your company does.’”

According to Powers, it is important to remember that government officials have their own internal KPIs just like anyone in a company. If what you are requesting is vastly different from their KPIs, he says, then they are largely limited even if they do want to help you. Much like using a Venn diagram, Powers says a government affairs professional should determine interests, research where interests overlap, and work within those spaces. “If you’re not adaptable,” Powers emphasizes, “You’re doomed because government officials change all the time, so you have to understand what the job title needs, not necessarily the person. I call it the “Venn Diagram of Mutual Interests”.

Powers has countless examples of using personality opening doors. At the Canadian gold mining company, he took a full year to develop the relationships required to determine where the friction lay between the company and the local government. “I came into the project very late and quickly learned that the previous management was radioactive, and no one wanted to talk to us. So it was very, very difficult to navigate the provincial and local governments, but persistence and some imaginative ruses paid off.”  

“It was like being in the middle of a war zone in WWII where you found the only field telephone working, and amazingly, the guy could read English, and sent all the messages out really fast. Even our Chinese partner didn’t know it existed.”

He also had a bit of entertainment while at SHV Makro. While trying to obtain an at-the-time non-existent foreign national retail license, he explains, “The fun part was the local partner and I had to go around and lobby every ministry trying to get approval.” Finally, facing only rejection in the Ministry of Internal Trade’s office, his partner’s constant talking for three hours straight caused the official to fold. “He said he would approve the project if she would stop talking. She asked for it in writing on the spot and he gave her a memo. That's persistence,” he said. “She wore everybody down.”

Powers recalled that in the early days of Americans doing business in China, everything depended on being able to have an actual conversation with someone. Without cellphones or email, “You’re dealing with people. You had to rely on your own wits.” He recounted once that when at Antaibao, in northern Shanxi, the telex machines stopped working at the mine site. He drove over 20km to find a telex machine, knowing that there had to be one somewhere nearby based on his knowledge of Chinese postal and telecom systems. Sure enough, after a couple hours of driving around and talking to villagers in the area, he found one in a small dilapidated hut. “It was like being in the middle of a war zone in WWII where you found the only field telephone working, and amazingly, the guy could read English, and sent all the messages out really fast. Even our Chinese partner didn’t know it existed.”

Keys to Organizational Success

For organizational success as a whole in China, Powers gives another essential set of three Ps: preparation, process, and people. You can prepare well and begin the process, he says, but if you employ the wrong people, you are sure to fail. For example, there was a telecom components supplier that called him in to help with an urgent problem. He explained, “They’d been on a flight up from Singapore and one of their engineers happened to be sitting next to someone from the same industry and exchanged name cards. The other person said, ‘Congratulations, I heard you’re selling your factory.’” Apparently, the company had hired a local project manager – but had failed to do even a rudimentary background check. They learned that day, unfortunately, because they had given him full legal authority, “He was selling the factory out from under their noses and the deal was going to happen that week.”

“Americans think they’re like John Wayne and they can ride in and save the day. That’s not what you do. You hire professionals to go in and handle it for you.”

Powers’ advice to the firm was to hire professional security, back up everything on the computers in the office, and then brick them immediately, but whatever they do, do not show up onsite in person without professional backup. However, the American business owners decided to ignore sensible advice and went to the factory to try and reason with the employee. But as soon as the man realized they had arrived, he barricaded himself in with the computers and downloaded everything. The situation went on for months, involved multiple police districts and senior city officials and became so tense, Powers said, “It’s a miracle they weren’t kidnapped.”

Where the company went wrong, according to Powers, was they wanted to be the heroes. He emphasizes the need for heeding professional advice, instead of thinking you know better yourself. “Americans think they’re like John Wayne and they can ride in and save the day. That’s not what you do. You hire professionals to go in and handle it for you.” In the end, the company had to sell the factory at a 50% loss.

“The Venn Diagram of Mutual Interests”

Powers has also brought his experience and expertise into his active membership on AmCham’s Board of Governors, where he’s served for the past four years, including in the role of Vice Chair. Powers said of his role as a board member, “The way I view the board is as a service position to the rest of the membership. This year’s board, in particular, is exceptionally strong in policy, but a chamber of commerce is not only about policy. It’s about providing the members value and keeping them engaged.”

Over the years, Powers has been especially active on US-China relations and visa policies. One initiative that Powers led was persuading immigration to use e-channel processing at the Beijing Capital International Airport. The e-channel passenger clearance system was initially introduced in 2004 to speed up border immigration between Hong Kong and Macao, and Mainland China, but in Beijing the airport had the e-channel equipment sitting unused for many years.

Being tired of standing in line himself, Powers saw an opportunity for helping both foreign businesspeople, who often found themselves in immigration queues of 800 people at the airport. Using the “Venn Diagram of Mutual Interests” approach, the pitch to officials was that their immigration people were totally overworked, and that since they had all the necessary equipment sitting around, why didn’t they put it to use like airports in other parts of Asia? A couple of months later, the airport began e-channel operations. Once again, Powers’ strategy was to “help them help us.” He said, “I’d like to think we gave them a little bit of a nudge, because it was pitched in a way that was very respectful and supportive of what they were already doing.” Once they agreed, he added, AmCham China thanked them for their positive support. This kind of government relations work is exactly what Powers likes about being an AmCham China board member. Rather than pointing out blame, the initiative was positive for both sides.

Powers (third from left) stands with the 2018 AmCham China Board of Governors at the Annual General Meeting

This year there was another mutual success. Powers said, “Last fall we identified one of the more confusing issues related to the new Individual Income Tax (IIT) rules which was the 5-year rule, and how would that be implemented.  Rebecca Wang from Deloitte and I worked with the relevant authorities, again using the “Venn Diagram of Mutual Interests” to point out that AmCham China supports full tax compliance, and that already overworked tax officials would be far better utilized prioritizing compliance rather than trying to figure out when hundreds of thousands of foreigners were last out of China for 30 days. The closing pitch was, since they had just come out with new IIT rules, why not just reset the clock from January 1st and have mandatory compliance going forward?” That was approved by the Ministry of Finance in March this year

Trading Places

In the context of the trade dispute, Powers has also been looking into supply chain diversity issues with AmCham China. As companies adapt to tariffs, he predicts three basic kinds of businesses may well emerge: a) Export only manufacturing, b) Made in China for China, and c) Made in China for China, plus some percentage of export. He believes it will be interesting to watch how companies reduce over-reliance on China’s manufacturing base. “China did a great job of building manufacturing infrastructure, but a combination of rising costs, labor issues, and companies realizing they are overweight in China are forcing companies to look at medium to long-term options, particularly export oriented firms.” If you are completely reliant on one supply chain base and a crisis occurs, “You have big issues, because you may not have flexibility to relocate manufacturing, as we learned American companies were caught off-guard during the SARS epidemic and had no backup plan,” he warned. “Japanese and Korean companies are superior at planning for China supply chain disruptions because they learned the hard way.”

He also recognizes the influence of AmCham China when it comes to policy. “Since we have a very high-quality policy team, our opinion matters,” he said. In the run up to the US-China trade dispute, AmCham China crafted talking points aimed at supporting free trade and market access during a “Doorknock” in Washington DC. The push was for reciprocity in terms of fair market access, not tit-for-tat necessarily. The White House effectively used those same talking points for a considerable amount of time, but he noted that “certain figures weaponized some of those.” As a result, the team had to modulate language the following year so as not to take such an aggressive position. Powers sees the situation somewhat optimistically, saying, “Nobody likes tariffs, but at the same time, it’s got China’s attention and there’s nothing wrong with having a frank dialogue.” Overall, he says he appreciates being able to influence current events and the future direction of US-China relations as a private sector individual.

Powers says AmCham China must look to stay relevant through focusing on the members. The Chamber’s Long-Term Strategy Plan, among other things, is addressing how to keep tailoring services to an evolving membership without compromising the primary goals of the Chamber. Looking towards the future, Powers says, “A Chamber of Commerce is all about building and supporting a community, not just policy, so we have to do a better job of that.”

 


This article was originally published in the first edition of the AmCham China Quarterly, an executive-targeted periodical focused on policy, business, and technology, driven by C-suite perspectives and insights. To subscribe or contribute to the Quarterly, contact our editor: jpapolos@amchamchina.org

To download the full Quarterly, click here.