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As China Opens, U.S. Lobbyists Get Ready to Move In

Donald Evans, a former U.S. commerce secretary representing a group of banks, meets Commerce Minister Bo Xilai to discuss China's rules on foreign investors.
Donald Evans, a former U.S. commerce secretary representing a group of banks, meets Commerce Minister Bo Xilai to discuss China's rules on foreign investors. (By Ariana Eunjung Cha -- The Washington Post)
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"That is increasingly no longer the case. Today, even if they don't agree with the final result, they know it's on the horizon," Kennedy said.

But China's laws have been slow to respond to the influx of lobbyists seeking to take advantage of the closer ties. Zhao Kejin, an associate professor at Shanghai's Fudan University who studies government-business relations and has written a book on lobbying in China, argues that because lobbyists do not need to register or file disclosure forms, the system is vulnerable to abuse.

"There is lots of lobbying money flowing to individual officials' pockets," Zhao said. In addition to straight-up bribery, some lobbying firms keep friends of high-placed officials on the payroll or pay for officials to take luxury "training" trips abroad.

In 2004, Lucent Technologies fired four executives who were part of its Chinese operations for violating the U.S. Foreign Corrupt Practices Act, which prohibits bribing foreign government officials and politicians. Last November, a U.S. software maker, Fidelity National Information Services, was accused of paying for luxury vacations for Chinese banking officials and their families in places such as Rome and Las Vegas. Fidelity has denied the charges.

Lobbying is not only less of an institution in China than it is in the United States, but the people being lobbied are different.

For instance, Murray King, head of the Shanghai office of APCO Worldwide, one of the oldest government relations firms operating in China, said that Chinese academics are among the key players that companies should reach out to. The most important members of that group are those who work with the think tanks affiliated with various state ministries, because they play an important role in the drafting of legislation.

Another crucial part of high-profile lobbying efforts are "guanxi brokers," well-connected individuals who can give introductions to important officials, or "rainmakers," people who are so famous that many Chinese officials might be happy to meet and shake hands.

"Because China is a country that respects authority, former politicians of the United States, when they come to China, can always play a very important role," said Steven Dong, a Tsinghua University public relations professor who studies the reputations of corporations.

A former U.S. official will almost always be greeted by a Chinese official of the same rank, Dong said.

Former officials with star power in China include Henry Kissinger, probably the most sought-after because of the role he played in establishing diplomatic relations with the Communist Party during the Nixon administration. Former Federal Communications Commission chairman Reed Hundt, who routinely visits China on behalf of Silicon Valley companies to talk about opening up China's Internet and telecommunications sector, is also a regular in the halls of Chinese ministries. Gary Locke, a former governor of Washington whose consulting firm represents Microsoft and Starbucks, is celebrated for being the first Chinese American governor and is so well known that school girls run up to him to take his picture.

Evans, who was commerce secretary from 2001 to 2004, has been working for the Financial Services Forum since 2005. This was his second trip to China on behalf of the group.

Evans was received by the Chinese government this month with all the pomp and circumstance of a state visit.


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