The New York Times (
www.nytimes.com
) published an article last year on November 12, 2012 that may have escaped the notice of many people about new developments in China that may one day affect how their business in that country can be conducted. This article was entitled
, ‘Social Risk’ Test Ordered by China for Big Projects’
b
y
Keith Bradshire.
I would like to excerpt portions of this article those of you who are considering becoming involved with “Big Projects” in China in conjunction with a Chinese company or companies. Mr. Bradshire reported in part:
“The cabinet of China has ordered that all major industrial projects must pass a “social risk assessment” before they begin, a move aimed at curtailing the large and increasingly violent environmental protests of the last year, which forced the suspension or cancellation of chemical plants, coal-fired power plants and a giant copper smelter.
The announcement came at a news conference on Monday held in conjunction with the 18th Party Congress, at which several senior officials addressed social issues ahead of the once-in-a decade transition of power in the Chinese leadership.
“No major projects can be launched without social risk evaluations,” Zhou Shengxian, the environment minister, said at the news conference. “By doing so, I hope we can reduce the number of mass incidents in the future.”
Mr. Bradshire went on to write:
“China has led the world in economic growth for the past three decades, but it has paid a heavy environmental price. Acrid smog coats most large Chinese cities for much of the year, while many lakes and rivers are contaminated with heavy metals and toxic chemicals.
Thousands of young protesters fought with the riot police for two nights in early July in Shifang, in western China, prompting the local government to announce the cancellation of a giant copper smelter that was seen by the demonstrators as a pollution threat.
Many environmental officials in China want the introduction of social risk assessments because protests against industrial projects often involve broader issues than just the environment and may extend to questions like whether the land for the project was lawfully obtained with proper compensation for its previous owners.”
An article in the China Digital Times (
www.chinadigitaltimes.com
) on November 12, 2012 entitled “Industrial Projects to Require Risk Assessments to Stem Protests” shed further light on this subject. This article, quoting from a New York Times article, reported in part:
“China’s economic boom over the last three decades has depended overwhelmingly on a build-at-all-costs investment strategy in which pollution concerns, the preservation of neighborhoods and other such questions have been swept aside. But that approach is starting to backfire, posing one of the biggest challenges for the new generation of Chinese policy makers who will take over at the Communist Party Congress, which starts on Thursday.
New investment projects used to be seen as the best way to keep the Chinese public happy with jobs and rising incomes, assuring social stability — a paramount goal of the Communist Party — while frequently enriching local politicians as well.
But from Shifang in the west to the port of Ningbo in the east, where a week of sometimes violent protests forced the suspension on Oct. 28 of plans to expand a chemical plant, more projects are running into public hostility. In many cases, they are running into opposition not just from farmers who do not want their houses and fields confiscated, but also from a growing middle class fearful that new factories will lead to more environmental damage.
In response to this and other worries about the economy, a number of influential officials and business leaders in China have stepped up their calls for changes aimed at increasing the efficiency of investment and simultaneously shifting the country toward a greater reliance on consumption.”
I think it can be safely said that doing business in China requires you to look before you leap into the ever changing waters you will be required to swim almost endlessly through before you reach solid ground. Treading water is just not an option. Consult with a good law firm to find life guards who know how to keep you out of the deep end before you know how to swim.
Hawkeye in China
Lex Smith