Doing Business in China Series
Successful U.S. businesses in China know one thing: building relationships with Chinese officials is the key to effectively establishing, running and managing a business. Especially when obtaining the necessary permits and approvals for a new food processing plant – which can be a lengthy and frustrating process – it’s imperative to play by a few key rules to ensure a smoother permitting process.
1. In-person meetings: Face time between the Chinese government and your key executives is not only important—it’s expected. Bring as many members of your U.S.-based team to the table as possible and understand that your primary role is to build a trusted relationship with the permitting authorities. Your U.S.-based team should meet with these authorities each time they visit the country to foster that relationship. In addition, your designated local Chinese representative should attend every meeting and have more frequent meetings – at least every two weeks – directly with permitting officials to ensure the project is on track.
2. Permitting strategy: The China-based group that executes your lease will also help define your permitting strategy. Sit down with them and agree on this strategy including the size of the facility, road access, guarantees for utility capacity and consumption, and other operational aspects. Most importantly, get this approved strategy in writing, as it will guide the permitting process and hold everyone accountable.
3. Permitting manager: Designate one individual from your team to oversee the permitting process. This can be your general contractor, your own plant engineer, or some firms hire a Chinese representative from the Local Design Institute (LDI) as their engineer of record. This one individual will keep the project on track from start to finish and manage all of the exterior relationships.
4. Extensive drawings required: You can obtain a construction permit in the U.S. with very limited drawings of your structural and civil plan, which may be 10 or 20 pages. The Chinese permitting process requires completed plans, which may include hundreds of pages of drawings. Plan for a six-month to one-year approval process. Also realize that any changes to your project, which owners frequently request, requires you to start over with the entire permitting process, which can delay the project significantly.
If you’d like to hear more tips about navigating the permitting process in China, feel free to email me at email@example.com.