Chinese Bureaucracy



Nine months into my enterprise I remain optimistic about China’s future in the global pharmaceutical community, which has lead some of my friends to think I am naïve or just plain mad. The country says they have the resources, the will and the vision to build this nation into a world-class leader in manufacturing, innovation and citizenship. As a reminder, I am part of a founding team that is in a cooperative joint venture with the China Medical City (CMC) government to build and manage a globally compliant biologics manufacturing facility in Taizhou, Jiangsu, China. (Read more about that here)

Today’s post may be a bit discouraging, because it’s not what people and governments say that indicates their intentions, but it is what people and governments do that reflects the real driving forces and motivation behind their behavior. For those of you considering China as a place to start a business, I don’t discourage it, but please go in with your eyes open and a healthy amount of skepticism. Sometimes one gets bogged down in the day-to-day, which is what is needed to push new enterprises forward, and I have to continually remind myself that the ultimate goal is what matters, and there are a variety of way to achieve it.

Now for some specific negatives about doing business in China. This joint venture was registered with the provincial and central government in October, and the Chinese partner, China Medical City, has yet to make the 20% minimum investment to finalize the joint venture (JV). They admit to having over-committed themselves to fund more than they have the resources for. Consequently every invoice and paycheck has to go through government processing so it can juggle its books to keep everything running, which is more bureaucratic and byzantine than you can imagine. Talking about bureaucracy, this country has had 5,000 years to perfect it and like anywhere in the world, it is self-perpetuating. One has to become the perpetual “squeaky wheel” to get what they need, and it can be exhausting and distracting.

In closing, I knew trying to build a GMP biobusiness in China, or anywhere for that matter, wouldn’t be easy. I didn’t expect the government, with all that trade surplus money, would renege on their contractual obligations, so everyone, be advised. I just read Chloe Liu’s post and it sounds quite the opposite of what I’ve just described, so it’s apparent that different people have different experiences, or they are at a different stage where their circumstances are dramatically different. I will give it about a month….

David Wilson

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