Archive for July 16th, 2009

Thursday, July 16, 2009

Guanxi isn’t Cool

I don’t give a damn on Rio Tinto – it’s just another global player. But I do feel for Stern Hu, his loved ones, and his friends. I’ve asked myself for a while why his arrest in China makes me feel that way.

Obviously, every sovereign state must have the right to arrest people – foreigners included -, when there is evidence for serious offenses against the law. If there is. And that’s a big “if”.

The timing of Mr Hu’s arrest – only weeks after Chinalco lost its bid for a substantial stake in Rio Tinto – smells fishy. And it seems to me that when China shows “resolve” to counter corruption, the moves look political rather than merely judicial in many cases. Chen Xitong and Chen Liangyu are prominent examples – no matter if and to which degree they may have been guilty of corruption. For sure, the two Chen’s and chairmen Hu Jintao or Jiang Zemin respectively were comrades only in name.

Many Chinese people will appreciate the “stern action” against Rio Tinto’s iron-ore marketing chief in China, and particularly a statement by Qin Gang, the country’s ministry of foreign affairs spokesman on Wednesday, that “noise” in Australia about Stern Hu’s arrest was an interference in China’s judicial sovereignty. But if you had asked some of the same Chinese people about their own trust in the independence of China’s judiciary in general, some time before this crisis started, it would have been a different story. I’m sort of curious how much of the support the Chinese government’s line against Stern Hu will draw actually owes to an issue of equal treatment for Chinese and foreign nationals. If Chinese nationals can’t expect fair trials in their own country, why should foreigners be in a better position? German Weekly Die Zeit quoted last year what it said was a Chinese proverb, concerning charges:

“The police prepares it, the public prosecutor serves it, and the court eats it.”

A closer look at companies from our countries – Germany, Australia, etc. – doing business in China could make sense. To understand that you risk an unexpectedly long sojourn in China when you travel there makes sense too – no matter if you are a bad guy, or if you faithfully abide by the law. And to re-think the widespread idea about “the importance of guanxi” – apparently the talk of every China Expert who has ever walked the world of business – would be a great idea. To be clear, guanxi doesn’t have to mean corrupt practise. But the uncritical way the expression is frequently used among foreigners, as if it was just about a regional habit, like using chopsticks for lunch, should be food for thought.

Sooner or later, the Australian authorities may conduct their own inquiry into Mr Hu’s case – especially if he returns to his country in the not-too-distant future. But it looks questionable if Australian authorities, in such an inquiry, could use evidence gathered by their Chinese colleagues.

My own feeling about this case first surprised me. Mr Hu is by no means the first foreign national arrested in China. That the rule of law in China isn’t really reliable isn’t news either – and I’m usually no man of great misgivings. I lived in China, and I travelled a “rogue state” in the Middle East only recently. No great worries there.

But I’m having no business in China now – and pretty much of a sudden, I’m feeling a sense of relief that I don’t need to travel there any more.

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