This isn’t your father’s Monolithic Authoritarian China.

The popular image in the West is often “the Chinese government” as a single, wealthy, corrupt and motivating force driving 1.5 billion people to world domination. This monolithic image continues to wrongly be the scapegoat for many of the world problems—from environmental pollution to mercantilist energy purchases to an artificially inflated currency.Much of this imagery is a hold over from a China of three decades ago. Some of it stems from the simplistic understandings of China that most in the West get from education that does not focus much, if any, time on Asia. And some of the misunderstanding come from the fact that much news that comes from China is written by people who either copy the People’s daily articles (assuming that they are legitimate news) or who are just in China for a week to “get a story.” The results are the poor understanding and masses of misinformation that currently constitute a very contrived opinion of “the Chinese government.”Those of us on the ground in China often see a much different China—a fractured chain of command, various and competing power centers, local power brokers and the central government as not much more than the lead story on the nightly news. Regardless of the industry, talk with people working in China and you’ll here the stories of local power and regional authority contradicting if not openly defying the central government. Drive through China anywhere off of the East Coast and you’ll think you’re in a completely different world—8% growth, IP violations and BMW’s haven’t made it to most of the country yet.But at the same time that many in the Western media and governments are discussing the issues they miss the bigger picture: misappropriated education funds, the current food and other product scares, local land grabs, individually corrupt local officials and a complete lack of enforcement of most central government policies are just the highlights on the long list of “this is not a centrally controlled state.” An article in today’s Asia edition of The Wall Street Journal specifically notes that there are sectors of the government/economy/legal system where there are “no legal framework to govern [local officials]” thus giving them tremendous amounts of power over local activities (13 Aug, 07; p.9).Despite the obvious evidence that China is not as centrally controlled as the Western powers and media would lead us to believe there continues to be article after article bashing a singular authoritarian “Chinese Government.” I’m not defending the Chinese government but I am frustrated by an image that both hurts political relationships and damages business opportunities.For example, the continued pressure by the US Congress on the Chinese government to revalue the Yuan (RMB) mostly hurts individual Chinese employees, US companies and US consumers. Basically it’s meant that politicians can court labor unions in the US and then never disclose that fact that their anglings have made the price of everything produced in China go up about 9% over the last three years.In addition, much of the trade deficit itself is a big media and political scare tactic—60% of that huge trade deficit (at least 60% of the annual exports from China) is from subsidiaries of foreign companies. The trade deficit has, in large measure, been created by US (and other foreign) companies moving production to China and shipping cheap goods back to the US not by the Chinese mercantilist government. US tax structure even supports these shifts to overseas production.But even as I write this, Beijing is doing it’s best to prove me wrong and give the West more fodder for their China bashing. But oddly enough, I support most of it! Outside of the increased controls over the media and dissidents recent policy from Beijing is excitingly pro-environment and pro-business. New controls by the central government over land appropriations, pollution, energy policy, and a desire to slower down the economy before it overheats all show that Beijing does want more actually control to do what’s in the best long-term interests of China.What does this mean for SME’s? It means that you’ll get to ride the coat-tails of the big business and their lobbyists in the US when it comes to free trade policy making (good). But you’ll also get take a hit to your profits as the US continues to pressure Beijing revalue it’s currency (bad). In the coming years you’ll see much more environmental control by Beijing resulting in a better working/living environment in China (good) and more standardization in business and legal practices across China (better). There are still serious questions as to China’s commitment to other freedoms (I have to watch my working here so I don’t get block) but efficient (yes, you read that correctly) and clean growth are indeed central government policies—let’s see if they are enforced.