TURMOIL IN CHINA : American Executives Put Off Visits; Some Employees Leaving
China’s political upheaval has prompted many U.S. companies to postpone executives’ visits or evacuate some staff members and dependents until the crisis eases, but none yet appear to be rethinking long-term strategies for doing business there.
“There’s a lot of hand-wringing going on. But companies are intelligent enough not to make decisions in that environment,” said Roger Sullivan, president of the U.S.-China Business Council, a Washington-based association of American companies that trade with China or are partners in Chinese factories.
“Companies don’t react to something like this until they see the longer-term implications,” Sullivan said.
Nonetheless, he said, business requests for advice and information from the council have grown to 50 or 60 daily since the crisis intensified, versus the normal two or three queries a day.
U.S. Ventures Growing
The unprecedented mass demonstrations in China for democratic political reform come against a background of broadening U.S. business operations in the world’s most populous country, with such ventures as coal mining, aircraft assembly and nuclear power plant construction.
The United States is a leading foreign investor in China and one of its most important trading partners. More than 600 U.S.-Chinese joint ventures have been established since the countries normalized relations a decade ago.
Although none of the protests are directed at foreigners, many have been surprised and unnerved at how quickly the veneer of government stability unraveled in recent weeks.
Telephone interviews Monday and Tuesday with business consultants in the United States, China and Hong Kong suggested that many executives with plans to visit Beijing have delayed their trips by anywhere from a few days to indefinitely.
They attributed most postponements to a State Department travel advisory and uncertainty over whether the demonstrations would turn violent.
“We’re very concerned with the outcome up in Beijing, but we don’t know what it will be thus far,” said Jerome Cohen, a Chinese law expert with the firm Paul Weiss, Rifkind, Wharton & Garrison, one of the few with offices in China. “Nothing terribly serious has occurred but the potential is there.”
In an interview from Hong Kong, Cohen said, “The only advice we’re giving out at this point are on immediate problems, such as, should you hold a reception scheduled for 10 days from now or should you postpone it.
“If the reception is something that can be held another time, I think it’s worthwhile to wait. If it’s a question of abandoning offices, I think that’s premature, I think that would be unwise.”
U.S. companies with offices in Beijing, including Bechtel Group Inc. and United Technologies Corp., said some employees have left the country, partly because the protests often have paralyzed traffic, making ordinary work nearly impossible.
“It’s really not business as usual there,” said Larry Miller, a spokesman for Bechtel. “So we sent our three non-Chinese employees to Hong Kong on a temporary basis, until normal business conditions return to Beijing.”
