InsideCounsel » July 2008
Olympic Trials
Strong but conflicted, China prepares to host the world.
This summer’s Olympic Games are frequently cast as a coming out party for the world’s fastest growing economy. It’s not a bad metaphor. Like a lanky teenager trying to master a rapidly maturing body, China can appear a jumble of contradictions—at once aggressive and defensive, and brimming with potential.
Although China’s economic ascendancy is undisputed, its insular culture has already made it something of an awkward host. Wary of foreigners and sensitive to criticism, China has struggled to manage ongoing international protests regarding the Tibet situation while trying to put its best face forward for the Games.
Still, the central government’s concerted efforts to showcase China for the Olympics make this a watershed year.
“The Olympic Games are changing China,” says Thomas Chan, a Los Angeles lawyer specializing in Sino-American trade. “It’s changing policy, media—it’s just amazing. After the Olympic Games it’s not going to turn back.”
It’s the perfect moment for corporate counsel to turn an eye to this juggernaut and consider the ways China is evolving. The dominant themes of recent years—counterfeiting and copyright and trademark enforcement—are beginning to shift to the periphery as China’s legal climate presents a more nuanced, mature profile.
Information Flow
Things are changing in China, and fast. Chan, a Hong Kong native who has been an American general counsel and a trade adviser to the Reagan and Bush administrations, is astonished at the free flow of information that followed the May earthquake—not just internationally, but within the country as well.
“There was no clamping down,” he says. “This has never happened before, and it had nothing to do with foreigners. The genie is out of the bottle.”
One frequent subject of that reporting was earthquake victims’ outrage at corrupt local authorities. At the same time, they generally voiced strong support for the central government. That distinction points to one of the key emerging business issues in China: whether Beijing can project its authority into China’s more remote areas.
President Hu Jintao, who comes from the interior, recognizes the risk in a stark disparity between a rich, industrialized coast and poor, rural inland populations. The ongoing relief and rebuilding effort in Sichuan may go a long way toward demonstrating the central government’s power there—power that will be essential to future business development.
As China’s wealth grows, its coastal cities will cease to be havens for cheap labor and manufacturing. “For that, you will have to go to the interior, or to Africa, Vietnam or Pakistan,” Chan explains.
