Teaching Comparative Government and Politics

Monday, November 03, 2014

Your assignment, if you accept it…

So the headline from the Chinese news service trumpets the "death knell for Guanxi." It must really be dead since the word does not appear in the news article.

Do you know what guanxi refers to? Can you hypothesize why it's unlikely to die off?

Xinhua Insight: China's legal renaissance sounds death knell for Guanxi

According to the 2014 Business Climate Survey among members of the American Chamber of Commerce in China, inconsistent or unclear laws and regulations have been one of the top three business challenges over the last five years.

The regulatory environment has changed drastically in two decades as legislation has struggled to keep pace with the rapidly evolving economy. Showering business prospects with expensive gifts or multifarious financial shenanigans may have worked in the past, but things are starting to change and the government is now claiming a zero-tolerance approach to corruption…

No informal mitigation of a sentence will be tolerated. Judicial cases must not be influenced by personal connections, favors or bribery. The judiciary will be completely overhauled, with the Constitution reigning supreme over a revamped legal system…

Along with swathes of red tape, gone are super preferential tax policies enjoyed by foreign firms in the past. A transparent market demands fair competition.

"Foreign firms should get used to the new norm and set a good example for their Chinese counterparts," Zhang Yansheng, secretary-general of the academic committee at the National Development and Reform Commission added, but that could be a tough task for all stakeholders.

"We hope the laws and regulations will be applied in a logical and consistent manner regardless of time, place, or parties concerned," said Greg Gilligan, Chairman of AmCham China…

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