Industry Controls China

There’s a surprising column in Sunday’s The New York Times detailing the power corporate bosses have over government officials in China.

David Barboza recounts his experiences of being held hostage by factory bosses and realizing Chinese officials had no power to free him:

AS an American journalist based in China, I knew there was a good chance that at some point I’d be detained for pursuing a story. I just never thought I’d be held hostage by a toy factory.

That’s what happened last Monday, when for nine hours I was held, along with a translator and a photographer, by the suppliers of the popular Thomas & Friends toy rail sets.

“You’ve intruded on our property,” one factory boss shouted at me. “Tell me, what exactly is the purpose of this visit?” When I answered that I had come to meet the maker of a toy that had recently been recalled in the United States because it contained lead paint, he suggested I was really a commercial spy intent on stealing the secrets to the factory’s toy manufacturing process.

. . .

Factory bosses, I would discover, can overrule the police, and Chinese government officials are not as powerful as you might suspect in a country addicted to foreign investment.

. . .

Many experts have told me that one of the most serious problems in China is that the government lacks the power to control the nation’s Wild West entrepreneurs, deal makers and connected factory owners.

. . .

“China effectively has no oversight over anything,” said Oded Shenkar, a business professor at Ohio State University and author of “The Chinese Century: The Rising Chinese Economy and Its Impact on the Global Economy, the Balance of Power and Your Job.”

“People have this idea they are Big Brother and everyone is under watch,” Mr. Shenkar said. “But this is not China. In China, local authorities often turn a blind eye to problems because maybe they’re invested in it.”

. . .

When we were released early Tuesday from a local police station, where we were sent to fill out a report, we noticed that while our translator was giving an account of the day to the police, the factory bosses were laughing and dining in another room, making the nexus of power in these parts and in this age ever more clear.

While corruption is rampant all over, it’s interesting that what the West often considers a completely totalitarian government has so little control over businesses.

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