Much our work now covers Chinese government policy at the national level: we work closely with ministries, government and non-government think-tanks, academics, industry associations and businesses to understand where government policy is going, and how it might affect our clients’ businesses.  We also have extensive networks at the provincial and municipal level, giving us access to how local government policies can affect our clients. 

Chinese government policy shapes much of what happens in the Chinese business world.  Political risk is far more fundamental and wide-ranging in China than in many other major economies.  We can look at ways in which policy, decision-making and other issues create political risk for our clients, or at how policy might drive the direction of development of an individual company or an entire industry.  We can examine how our clients need to change their operations in order to best take advantage of new policies, or look at how policy issues might threaten their businesses. 

It is impossible to outline the full range of policy issues that we investigate for our clients, but examples of some of the types of issue that can affect our clients are set out below. 

Trade agreements and trade disputes can have a profound impact on foreign companies’ operations in China.  Understanding the government’s thinking on these issues is critical to formulating future strategies. 

Other geopolitical issues can crease significant political risk.  A dispute over territory, governance, military deployments and other issues might seem isolated, but it can have profound impacts on business.  The government can create unofficial barriers – through content restriction, Customs inspections, industry standards, media-driven unofficial consumer boycotts and other means – that specifically target companies from one country. 

Environmental policies impact everything from the resources sector through to the automotive, electronics, transport and new energy sectors, as well as the operations of any business that relies on these sectors.

Economic planning is a critical factor in determining the direction of every industry in a planned economy like China’s. Understanding what the government plans to do, and why it is making those decisions, is essential at both the macro and micro level.  This can range from understanding China’s economic growth to understanding specific policies to encourage certain types of development in a given industry, or to restrict development in another industry. 

Industrial and financial reform is a major factor in changing the business environment in China.  This could cover anything from macro issues such as the management of bad debt at China’s banks, through to more granular issues such as the potential impact on a client’s joint-venture partner of a State-driven merger, acquisition, divestment or privatisation. 

Understanding these issues allows you to develop strategies that minimise risks and maximise the opportunities that the government’s policies create.