Effective public affairs in China: MNC‐government bargaining power and corporate strategies for influencing foreign business policy formulation

Yi Ru Regina Chen*

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

23 Citations (Scopus)

Abstract

China’s open‐market reform and rapid economic growth have generated a tremendous surge in activity and market investment by multinational corporations (MNCs). By 2000, 400 of the 500 most famous MNCs had invested in China. One distinctive feature of China’ s business environment, its authoritarian political system, requires MNCs to practise strategic public affairs to interact constantly with the different levels of Chinese government, respond to the policies and further influence business policy formation. This paper proposes a conceptual model of MNC‐government bargaining that is composed of international political economy, dependency theory and agency theory. It then examines (1) the international and domestic influences on MNC‐government bargaining in China and (2) the strategies MNCs employed to influence Chinese laws for foreign business in their interests. A case study of the Chinese ban on direct selling operations in 1998 and Amway’s strategies to remove the ban is presented. Results suggest that effective public affairs should engage in the following activities: (1) issues management, (2) constantly and systematically analysing the MNC’s bargaining power with the host government, (3) selecting public affairs strategies based on the analysis of MNC‐government bargaining, (4) exercising relationship management, and (5) being ethical in its practice.

Original languageEnglish
Pages (from-to)395-413
Number of pages19
JournalJournal of Communication Management
Volume8
Issue number4
DOIs
Publication statusPublished - 1 Oct 2004
Externally publishedYes

Scopus Subject Areas

  • Communication
  • Strategy and Management

User-Defined Keywords

  • MNC–government bargaining
  • power
  • effective public affairs
  • corporate political strategies
  • domestic and international influences on foreign business policy formulation
  • China

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