Earning Approvals in China: Understanding the Bureaucracy

The Chinese bureaucracy is extremely large and complex. It stretches from the central government in Beijing all the way to the local village in the countryside. Fortunately, the Chinese government is giving more autonomy to the local government officials. Nowadays, only the mega deals or projects involving sensitive industries need to be approved by the central government. For most small- to medium-sized businesses, you likely need to deal only with the local government bureaucracy.

Getting approvals in China is hard work. Usually, the smaller the deal, the fewer approvals you need. However, you need lots of time to get those required approvals, permits, signatures, and chops (stamps) from the local government officials. Most foreign businesspeople underestimate the amount of time to get approval in China. You can expect some approvals to take up to several months. (For more on the approval process, see Chapter 7; also see Chapter 13 for manufacturing approvals.)

Unlike in the West, local government officials in China have much more influence on daily business activities. For example, the mayor of a city may have leverage to help you in a dispute with a Chinese company in his or her city. Therefore, having good relationships with the right government officials makes getting the required approvals easier.

Local officials can make the difference in how quickly you can get established and up and running in China. You need ...

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