Interviewer from China News Weekly: Xuewei Jie
Published in the October 21, 2024 issue, No. 1160 of China News Weekly Magazine

When you receive an invitation from a business, should you attend or decline? If you accept, could that lead to disciplinary issues? If you decline, how do you explain it? Are public officials allowed to dine with business representatives, and does policy permit such interactions? Could this create legal troubles for both parties involved?

These seemingly straightforward decisions in government-business relations often come with significant concerns. Many officials and business leaders have shared with China News Weekly that while they understand the “red lines” of these interactions, they still face challenges due to unclear policies and vague legal interpretations in certain situations.

Recently, Guangzhou has released a set of guidelines titled “Behavior Guidelines and Q&A for Government-Business Interactions in Guangzhou” (hereafter referred to as “the Guidelines”), which has sparked considerable discussion. The Guidelines outline six categories of common scenarios within government-business interactions, including investment promotion, hospitality, transportation, travel accommodations, gift donations, and external exchanges, detailing both “safe zones” and “red lines” along with case explanations. This aims to alleviate uncertainties in government-business relationships.

Nie Huihua, a professor at Renmin University of China and a member of the China Federation of Industry and Commerce’s think tank committee, remarked in an interview with China News Weekly that the overly principle-based regulations on government-business interactions have often led to distorted relationships due to accompanying pressures and risks. The new Guidelines provide concrete applications and action guidance, outlining clearer boundaries and rational spaces for these interactions.

**Work Meals Are Permissible**

Government-business interactions take various forms, including seminars, forums, local celebrations, and annual meetings. Participation often hinges on local regulations and interpretations by relevant authorities.

“Sometimes, we’re unsure if we can attend and end up politely declining invitations or only participating briefly,” admitted Li Hui, director of the Foreign Investment Management Office of the Guangzhou Municipal Bureau of Commerce. Even though businesses might understand, this creates a rigid and distant image of government departments.

The Guidelines explicitly prohibit participation in festive events and celebratory banquets, while allowing certain functional departments, such as the United Front Work Department, foreign affairs, and industry associations, to attend gatherings hosted by chambers of commerce and industry associations, subject to approval.

Dining is another unavoidable topic in government-business relations. Can government officials eat with business leaders during joint events without it being considered “corruption on a plate”?

“Many public officials have expressed their uncertainty over whether they can dine with business leaders in unexpected situations,” said Wang Yuqun, deputy director of the policy and regulations research office of the Guangzhou Discipline Inspection Commission. Their research revealed that some officials turn to their superiors for guidance, but even leaders often lack clarity or can’t provide a policy basis, responding with, “Better to be strict.” This mindset leads to a default behavior of declining business invitations.

Business leaders face similar dilemmas. Shen Yanbin, deputy general manager of Guangzhou Yourte New Materials Co., confessed that he often wrestles with these concerns. Once, he observed local government staff visiting several companies without taking a break and thought about inviting them for a meal afterward. However, worries about crossing disciplinary boundaries and creating trouble for officials held him back. After much inner conflict, he ultimately chose not to extend the invitation.

The Guidelines now clarify that in specific circumstances, public officials can dine at businesses, such as during official visits for inspections or research, particularly if meals are missed due to work obligations or if the business is in a remote location. However, staying within the set meal expense limits is essential.

Moreover, for gatherings organized by chambers of commerce or industry associations, while public officials are generally not allowed to accept invitations, they may join meals if the organizing party arranges for everyone to dine together.

The Guidelines also firmly establish dining “red lines”: no excessive feasting in company hospitality venues, no requiring companies to pay for personal meals, and no accepting invitations that could compromise the impartial execution of their duties.

**Oversized Hotel Stays Are Allowed**

When traveling for work, can officials stay at the same hotel as other attendees? If there are no suitable hotels or if the selected one exceeds the prescribed standards, can they be reimbursed for the extra charges? What should be done if a company provides free lodging?

Liu Xiqing, director of the Resource Conservation and Environmental Protection Office of the Guangzhou Development and Reform Commission, encountered this issue while attending a grain production cooperation meeting in Guizhou’s Qiannan Prefecture. The local government arranged a hotel outside the usual travel standards to stimulate economic development.

“Staying at an overscale hotel not only violates the principle of frugality but could also raise public doubts about the integrity of public officials,” Liu noted. To avoid this predicament, she and her colleagues opted for a hotel in the town, which added logistical complications due to poor transportation and an early morning meeting.

Wang Yuqun’s research also revealed that some businesses are unsure of the proper standards for accommodating public officials and worry that uniform hotel arrangements might exceed government rules, leading them to opt for low-cost accommodations, inadvertently increasing the burden on these companies.

The Guidelines clarify that if officials are participating in significant foreign affairs, international forums, or entrepreneurial summits, hotel stays exceeding the defined limits must be pre-approved and reported. Additionally, the Guidelines state that travel expenses must not be improperly covered by businesses and that lodging without an official invoice may not be reimbursed.

As companies expand internationally, overseas negotiations have become routine. However, traveling on business-class charters arranged by companies or conducting official duties under personal passports has potential pitfalls for public officials.

Nevertheless, the Guidelines indicate that such actions are not automatically deemed illicit. Wang Yuqun explained that executing official duties on a personal passport is often motivated by the need to expand business operations abroad. Given the urgency of such tasks, regular approval procedures for official travel may not suffice, especially when accompanied by appropriate reports and approvals, without any self-serving interests impacting outcomes.

Thus, a principle of differentiation can be established, allowing for correction and accountability without imposing strict disciplinary actions. Issues exposed in managing official overseas travel should be addressed through improved regulations, optimized processes, and innovative mechanisms to eliminate risks from the root.

**Addressing “Clarity” vs. “Proximity”**

The issuance of these Guidelines in Guangzhou responds to the new challenges facing current government-business relationships.

In recent years, the implementation of the central eight-point regulations and deepened anti-corruption efforts have defined the “red lines” for government-business interactions, significantly addressing collusive issues. However, the phenomenon of being “clear but not close” has emerged as a new challenge in some regions.

During a press conference for the Fifth Session of the 12th National Committee of the Chinese People’s Political Consultative Conference in 2017, spokesperson Wang Guoqing highlighted that the attitude of distancing itself from businesses has led to a reluctance or inability among leaders to engage actively.

Liang Pinghan, a professor at Sun Yat-sen University, noted in an interview that under the pressure to avoid blame, some officials have developed a mindset of “fearing” and “avoiding” business interactions, responding passively to the needs of private entrepreneurs with a mentality of “aiming for no mistakes rather than seeking contributions.”

Many businesses echo this sentiment. A survey from last year by Li Jianwei, vice president of the Shanghai Private Economy Research Association, revealed that 47.7% of respondents from privatized enterprises believe government departments neglect to contact or show concern for them due to a protective mentality.

These trends stem partly from the ambiguous “gray areas” of government-business interactions. Luo Jinhui, a professor at Xiamen University, explained that local officials prefer to be “clear” but not “close” due to the lack of well-defined incentives and regulations regarding fault tolerance, leading to selective performance of duties among those with poor service awareness and governance capability.

In reality, since Xi Jinping’s address at the 12th National Committee of the Chinese People’s Political Consultative Conference on March 4, 2016, where he advocated for establishing a new type of government-business relationship characterized by “proximity” and “clarity,” Guangdong issued its own preliminary opinion on fostering this type of relationship shortly thereafter.

The opinions stressed that officials should regularly engage with enterprises to understand their situations and help solve their difficulties, prohibiting practices such as soliciting benefits during market entry or regulatory procedures. Yet, specific guidance for scenarios like attending annual meetings or dining at businesses remained vague.

Subsequently, provinces like Henan, Jiangsu, Shandong, and Zhejiang have all issued regulations or documents aiming to establish this new type of government-business relationship through positive and negative lists, but, like previous measures, these documents lack detailed rules for different scenarios and fail to outline penalties for improper conduct in government-business relations.

The introduction of the Guidelines serves as a necessary supplement to these regulations. Wang Yuqun emphasized that this document meets both government and business needs, clarifying that enterprises’ growing demands for precise policies have become essential as their interactions with the government increase in complexity.

“Disciplinary Loosening” Is Not the Aim

“The Guidelines from Guangzhou, given their widespread applicability and detail, were overdue.” Nie Huihua believes that clarifying the boundaries of government-business interactions is a universal and significant policy concern at this juncture.

Amidst this context, the Guidelines hold particular relevance. On September 26, 2023, the Politburo of the Central Committee of the Communist Party of China convened to analyze the current economic situation and outline economic work ahead. They emphasized the importance of helping businesses surmount difficulties and further standardizing regulations and supervisory practices related to enterprises. A new law to promote the private economy was proposed to cultivate a favorable environment for non-public economic development.

Liu Chunsheng, an associate professor at the Central University of Finance and Economics, commented that stabilizing the survival and development of enterprises is especially crucial given the current complex international landscape and domestic economic pressures. The emphasis on supporting businesses reflects the Central Committee’s commitment to economic development and addresses various pressing realities.

As Shen Ronghua, a researcher with the Chinese Administrative Management Society, noted, the Guidelines’ scene-based classifications, supported by lists, examples, and legal backing, make government-business interactions clearer and more rule-based. Their clear delineations of “safe zones” offer both parties the confidence to navigate what is permissible, fostering consensus on interaction parameters and alleviating the strain of blame avoidance.

Regarding the demarcation of these “safe zones,” Wang Yuqun indicated that they drew from the “positive and negative list” approach, establishing clear boundaries within legally permissible parameters and allowing elasticity for government and business interactions without constituting “disciplinary loosening.”

Currently, the release of the Guidelines has attracted widespread attention. Liang Pinghan mentioned that regions seeking to adopt similar strategies may need to adjust their implementation based on specific local circumstances, including cultural and departmental differences.

The Guidelines categorize scenarios to encapsulate common confusions encountered by officials in practice. Wang noted that although businesses have suggested further diversifying these settings, they ultimately selected six representative and frequent scenarios based on feedback from their research. They are still collecting and studying new scenarios and issues, planning to issue a second batch of Guidelines in response to operational practices and results from implementing the current Guidelines.

Wang Yuqun added that they will strive to enhance supervision and monitoring concerning the implementation of the Guidelines to ensure their effective rollout.

This article originally appeared in China News Weekly, issue 38 of 2024.
*Disclaimer: Reprint of materials from China News Weekly is subject to written authorization. [Editor: Li Yan]*