Beware of friends claiming connections in high places - they could be taking you for a ride By Kathleen Lau

The summer I was 19, I worked in Linden, New Jersey. In America, New Jersey is called the Garden State. That might be true for the southern part of the state, but Linden was known more for its chemical plants than for its botanical varieties. The rounded building-sized fuel tanks of the chemical companies dotted the landscape. I felt grown-up working among the hard-core chemical workers, dressed in their white overalls, hard hats and steel-tipped shoes. I would eavesdrop on their conversations in the cafeteria to decipher their lingo, a world so different from the college students that I had eaten among just a few weeks before.

I was thrilled then when Tyrell sat next to me one day and struck up a conversation. He had been working there close to 10 years and gave me tips on who was who in the plant. When he heard I spent the previous summer travelling in Europe, he was not impressed.

"I lived in London when I was 21," he confided. "Those English and their accent, I hardly knew what they were saying half the time. No, I like it here just fine." Still, I was amazed that he had lived abroad and spent the rest of lunchtime talking about travelling.

So it was a surprise when a few days later, when I had made friends with others in the plant, that some of them were making fun of Tyrell. Since he wasn't present, I decided to defend him. "Did you know he lived in London when he was 21?" I wanted to impress them.

"Ha," one of the old-timers piped up. "The closest Tyrell's been to London is London, New Jersey." The whole table cracked up laughing. Later, one of them explained that Tyrell was known for his stories. As the summer wore on, and I had a chance to talk to him some more, Tyrell always seemed to have met, seen or done whatever it was I was talking about at the time.

That summer in the chemical plant was an education for me. It taught me that people did not lie, but rather lie to put themselves in a good light. As I went on into the working world, I was able to differentiate between the stories people told and the genuine advice that I was offered.

It worked well until I came to China.

Suddenly I found myself in a world where I couldn't differentiate between the tall tales and the advice. I did not have the experience of a Chinese Tyrell to show me the difference. It was like I was 19 again. Eventually I did learn. The process cost me money, energy and faith in people. But once I caught on, I realised it wasn't hard to see the signs. I just needed to know the lingo.

"I know someone" You hit a wall in getting the proper authorisation for a project. Then someone you meet says these three simple words and promises to make all your trouble disappear. It usually involves handing over lots of money, most of it undocumented, and you don't ever even get to meet the person your contact knows, or where the money is going exactly.

A friend had his eye on a piece of prime real estate that belonged to the district government. If restaurants can open up in houses once owned by Soong Ching Ling (wife of Sun Yat-sen) then getting this space was not out of the question. Except he didn't know how to go about it - until he met Madame Zhang.

She knew someone, she said, who had direct access to the district chief. It was a matter of paying her US$20,000 (€15,000) up front and she'd have the lease contract stamped before the check was cashed. The only part of this business transaction that was not negotiable and must be completed quickly was handing over the money. Two years later, the money long spent, my friend has moved on from the yearning for his perfect location.

Another friend handed over getting an important permit to someone she knew well and trusted. The required permit needed the approval of a few people, "so I'll need some entertainment money," the friend said.

"But who are these people?" I asked. "Tell your friend you want to go to their next meeting. Sometimes it helps if the owner makes her own case in person," I suggested.

Thousands were handed over to the friend, who gave the advice that "better you don't meet these people. They don't usually like to show their face." Then the news came that the permit can be given only if she made renovations that totalled over RMB100,000 (€10,000) - on top of the money she already handed over.

You might know the same someone

Shanghai's local government is under the spotlight much more now than in the past. For big projects, the approval you need probably cannot be fudged by anyone in the local government anyway. If a permit you require hinges on the mood of the person who chops the application, then it's likely you can find and talk to this person yourself. Local officials are not likely to look for big payoffs, but rather some respect and humility.

When the gas official who came to inspect my restaurant discovered that I had used a "gas company consultant," he asked why I'd used such a company. "I was told that it would ensure my gas permit," I answered.

"You don't have to do that anymore," he advised. "These days we're very straight-forward. Next time you just contact us directly." In the restaurant industry, it's obvious there are vast differences in the hygiene levels of eating establishments. Perhaps the ones that wash their dishes on the sidewalk do need to "know someone" with the right authority in order to operate. But for most of us doing business in China, our operations tend to be model units when it comes to upholding local regulations.

What's lost in translation in "I know someone" is that as foreigners who have read all the books about doing business in China, we think that is the sure ticket to smoothing over problems. We must learn to differentiate who is that someone in our contact's mind.

Your project might need a government seal from the central government or it might depend on the lowly bureaucrat who holds the chop. These days, it's possible to simply make a phone call to the local bureau and get the name of the person-in-charge. At this level, they are not looking for pocket money. Most times, they just want some respect from the hot-shot foreigner who wants to set up shop on their turf. This respect can be shown by offering a pack of cigarettes, or having the foreigner taking the time to shake hands even when conversing is not possible. Find an assistant who can finesse all the rituals of hospitality and pretty soon, you'll be the one to say, "I know someone" to your associates.

In the next issue, we'll hash out two other whoppers, "I know where you can get it cheaper" and "this is the only way it can be done".

©copyright 2007 by Kathleen Lau. No part of this may be reprinted - in any language or format: printed, electronic or otherwise - without express written permission from the author.