Negotiating With the Chinese Government – a 2d Example

I mentioned yesterday that to do the loans we needed to know how to handle the People’s Bank. The People’s Bank was tasked to shut down loan programs they had not approved.  My initial advice from experts who know was to avoid the People’s Bank and stay under the radar.  One morning I get a call that the People’s Bank at one site has a court order and has closed us down. Oops. We never got back into that place.

We began to visit the People’s Bank before we started in a city. We would explain to them what we were doing. We explained how we also had contact with the People’s Bank in Beijing and that we are an experimental model.  They accepted in each local People’s Bank and that still has enough cover in the present time more than a decade later.

The People’s Bank never made us legal on paper. They could fly in any day and close us down as an illegal program. However, they knew we were beneficial and helping people every day.  They had no power to make us legal on paper. Only Beijing could do that, and they still have not moved.  What we needed from the local People’s Bank was passivity.  We only needed them to not close us down.  That worked.  Now, as a for profit business, that is too risky for most.  Avoiding an agency in a case where someone could get points by turning you in is a dicey method.  Pay them respect and tell them how what you are doing is beneficial, and you may get more than just the verbal space we got in this case.

Surely, some agencies you do not want to get familiar with as there is no need.  However, being active with the ones who could give you big trouble is better than hoping they do not find you.  Finally, China is a nation of laws.  We should respect their laws just as we want then to respect laws in our home country.  We should learn about them and follow them.  If we are hoping they do not find us, then we need to change. The People’s Bank showed me that in 2002, and I have never failed there since.

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Posted in: China, Government Issues, Negotiating

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