In 2 weeks, Oil & Gas Journal will publish the first installment of a three-part series on energy issues in China. The coverage expands a similar series in 2004.
The July 11 OGJ will discuss the increased drilling and production activity onshore and off China and a technique used in Daqing oil field to increase recovery.
The second installment, in the July 18 OGJ, focuses on midstream operations in China. It presents an analysis of the growth and impact of LNG on natural gas supplies and markets in China. The third report, July 25, completes the picture with a look at downstream, processing topics.
Each of these issues of the magazine presents data, analyses, and perspectives that are intended to provide OGJ readers with useful information if they are or are contemplating doing business in China.
Doing business in any country, however, let alone one with more than 1.3 billion people and an oil market that in the last 3 years has grown faster than any other, is about more than capital investments and returns. Doing business in China is fraught with possible missteps that any westerner must avoid.
If the culture, traditions, languages, and dialects are not enough to create difficulties, China is also facing a rising tide of HIV/AIDS that any company planning to do business there will ignore at its peril.
Business strategies
Official Chinese government figures put the number of HIV-positive persons at 840,000, with more than 10% having progressed to AIDS. That official figure is startlingly higher than the 600,000 cases admitted to in 2002 and an outright explosion compared with the few thousand cases claimed in 2001.
But a figure of 840,000 remains well below what many experts outside the country believe is a more accurate estimate.
This is a situation of which western companies trying to conduct business in China must be aware. Indeed, in 2003, when the crisis was becoming clear to many, Bates Gill and Andrew Thompson of the Center for Strategic and International Studies, Washington, DC, offered what remains today sound advice for all companies doing business in China.
Gill and Thompson in The China Business Review (July-August 2003) categorized the costs of HIV/AIDS to businesses as:
• Primary-“When sick employees miss work, worker productivity declines, and employee turnover, healthcare expenses, and social burdens...increase.”
• Secondary-“Low morale and strained relations between workers and management.”
• Tertiary-“Damage to corporate reputations and the decline of product markets and investor interest.”
But the authors’ more important points tell companies how they can mitigate the impact of HIV/AIDS. They believe a company should:
• Establish a policy for HIV/AIDS and all blood-borne illnesses and distribute copies of the policy among employees. Such a policy is the “first step toward reducing the stigma of the disease, which should be a goal of any policy.”
• Work with wider education efforts in communities. Such efforts are most effective “when delivered by peers and when workers are involved in program development.” These programs emphasize what kinds of contact can and what kinds cannot transmit the infection.
• Communicate with vendors and suppliers that can in their turns set up prevention programs.
• Prepare for the “care and support of workers and their families.”
A company should become familiar with local and regional laws to establish its own legal risks. And it should survey local healthcare facilities to make sure care providers are of the highest possible quality. Workers, Gill and Thompson said, should be advised to avoid seeking care at clinics that reuse medical equipment.
The authors concluded that the risks of HIV/AIDS are severe and that to “deny or ignore them amplifies the economic risks that companies will face in the future-including reduced corporate profits.”
Sound practices
The emphases here are on communication and involvement. And these are important traits for any company trying to do business in what is a culturally and linguistically foreign environment.
More importantly, doing business in a country not its own demands of a company that it respect its Chinese employees and business clients as it would employees and clients in its own country and wider society.
Such advice connects sound business practices with sound business ethics and relates them both to what businesses are and must be about: profit, in many senses.✦