International Law

Lobbying China to Alter Regulations and Improve Sales

By China Briefing

Op-Ed Commentary: Chris Devonshire-Ellis

Apr. 22 – A little explored but useful function that the more established consulting firms are able to assist with is in the field of Chinese regulatory systems and the ability to assist with lobbying to have these changed in favor of new products. As Chinese law evolves, many aspects of the Chinese regulatory environment are not to the same standards as those elsewhere, particularly in health and safety aspects and related areas.

An example where this may be a strategy to deploy exists with the Chinese regulatory environment concerning the use of ladders. In most EU and U.S. regulatory regimes, the height of a ladder is restricted (typically a maximum of 12 feet only, although there are variations) for construction or commercial use. These regulations assist lift manufacturing companies who can sell lift platforms and related devices to construction and internal sites as well as cleaning apparatus applications and so on where the required height reach exceeds the legal ladder requirement. Chinese health and safety laws have not yet caught up with standards in the West, and there is no law that currently restricts the height of ladders.

This means that the lobbying of government departments responsible for the changing of such regulations can be a highly successful policy for foreign investors to adopt in order to sell onto the Chinese market. By influencing Chinese regulations regarding the height of ladders, and having the law changed to impose a height ceiling on the basis of worker safety, it effectively creates an entirely new market, supported by legislation, that permits foreign investors to then sell their products.

The consideration of key legislation as affects U.S. and European companies wanting to sell to the China market should be a key strategy for the enhancement and development of sales plans for China. Overseas based manufacturers looking to sell onto the Chinese market would do well to engage reputable firms familiar with the Chinese regulatory environment and the ability to identify the responsible government body. A strategy to research the regulatory environment and engage with Chinese government officials to commence discussion on changes to the legislation is a useful promotional tool and should be a key part of any manufacturing company?s China development strategy.

Chris Devonshire-Ellis is the founding partner of Dezan Shira & Associates and has been involved with the structuring of foreign businesses in China for the past 18 years. The firm maintains a significant business advisory division with offices handling the constantly changing regulatory environment, led by a team of foreign and Chinese legal professionals. Please e-mail legal@dezshira.com to discuss specific China regulatory matters and the engaging of relevant departments for promotion of related products to the Chinese market.

Full post as published by China Briefing Blog on April 22, 2010 (boomark / email).