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Some quasi-official agencies do nothing but charge membership fees, issue industrial briefings and pay some employees.

The enterprises hate those agencies.

The industrial associations have limited functions. It is not realistic to count on them to save the enterprises, let alone fighting against the financial crisis,” said the general manager of a Hangzhou-based down jacket manufacturer.

Ms. Liu from a Zhejiang-based textile group shared the same opinion about the industrial associations. She said: “The textile industrial association in our province published an ‘industrial declaration via media at the end of 2008, to call on the enterprises to fight against the financial crisis together.” In her opinion, this is a “show” rather than a “real action”. The industrial association spoke some nonsense but had no measures that can be implemented, making people feel that the industrial association just wanted to prettify itself.

This “declaration” said: “We appreciate the long-term support and aid from the government and financial institutions. We can not have todays achievements without them. When the industry is in trouble, we call on the government to give us more favorable conditions in the policies of taxation, investment and so on; we also call on the financial institutions to pay more attention to our industry. We believe that your help is the key for us to regain the confidence and re-create brilliance.”

However, three months passed. No changes happened to the situation of the textile enterprises in Zhejiang Province. A director of another textile enterprise said that the enterprises have a strong antipathy towards the industrial association having meaningless words instead of meaningful actions. If it is so easy to survive the financial crisis, people in the world will not be worried about it. However, the truth is that the enterprises have to struggle to survive the financial crisis.

“Compared with the effective and active industrial association in the developed countries, a lot of industrial associations in China have defects in structure, reserve of talented people and capital. It is difficult for them to perform their functions and they are in great need of repositioning,” said a government official in Zhejiang.

Previously, the director of an industrial association was usually a government official. When those people retired, the posts are usually taken by the bosses of the leading enterprises in the industries. The directors have their own enterprises. So when facing trouble, how can they spare their energy to help the other enterprises?

In an industrial association, the directors and deputy directors are in different positions with the small- and middle-sized membership enterprises. Their appeals are also different. The large enterprises usually pay attention to the projects and land. They can even make use of the association to persuade the government to issue the policies which can benefit them. A boss of a Zhejiang-based textile enterprise with a yearly output of 20 or 30 million yuan (USD 2.9 or 4.4 million) said that some industrial associations has already become the “club for large enterprises” attached to the government. The small- and middle-sized enterprises have few rights to speak on their own behalf and exert much less influence upon the industrial associations.

Xu Qiutang, Director of Shanghai Chemical Industry Association, said that the outer environment for the industrial associations in China to fully exert their functions is not good enough. Firstly, the government has controlled not only the macro aspects, but also the micro aspects. There is a limited space for the industrial associations to perform their functions. The industrial associations in the developed countries have certain rights to give out their opinions and suggestions in the industrial development rules and enterprise project construction. In China, the industrial associations know better than the government in the aspects of market situation and production capacity. So they have better opinions in judging whether a project is suitable to approved or not. However, they have no rights to give out their suggestions. And the government never listens to the opinions from those industrial associations.

In a city of the Yangtze River Delta Areas, the department which was in charge of the chemical industry in this city had dozens of employees. But after the institutional reform the department became an industrial office with two or three employees. How much can they know about the industry and market situation? But the large projects are approved as usual.

Secondly, the industrial associations have no sources of economic income and have difficulties in their operations. No economic power means no rights of speech. Each membership enterprise charges hundreds or thousands of yuan as their membership fees. Most of the local industrial associations have less than 100 thousand yuan (USD 14.7 thousand) as their membership fees. After paying the employees salaries, there is quite a little left. If the associations want to invite the experts to give a lesson or consultation, the transportation fees and service charge will reach seven or eight thousand yuan (USD 1 or 1.2 thousand). The industrial associations face the problems that no activities mean no influence and recognition and activities mean a large cost of money.

Thirdly, the industrial associations lack professional talented people. Many employees there are amateurs but they pretend to be the experts. With low social recognition, the industrial associations are not trusted by the enterprises which usually ask the government for help if having problems.

The Shanghai Chemical Industry Association previously had 20 people work for it. Now the number of employees decreases to 16 due to the economic stress. According to its director, this is a good case among the industrial associations in China. Actually, many industrial associations can not recruit professional talents because they can not provide attractive salaries.

According to the introduction, most of the industrial associations in the Yangtze River Delta Areas have five or fewer people in their secretariats. The directors and deputy directors are usually the entrepreneurs. Some industrial associations only have the functions of charging membership fees and issuing industrial briefings.

Chen Yao, a professor from Industrial Economy Research Institute, the Chinese Academy of Social Science said that the local industrial associations in China generally face the problem of existing. Compared with the foreign industrial associations, Chinas industrial associations can not represent most enterprises interests.

Prof. Chen Yao is an expert in industrial cluster and regional competitive power. He said that the large industrial associations in China are led by the central government and assume the responsibilities of governmental administration. So they have more convenience in fully performing their functions. The local industrial associations in different places have the retired government officials as their directors. Those directors can make use of the resources they got in their tenure to do something. But they usually keep the bureaucratic manner resulting in the bad service consciousness. So they dont know what the enterprises need and can not provide the enterprises with what they need. Fortunately, in recent years, a new kind of industrial associations begins to arise in China. This can change the dilemma of the industrial associations in China.

City Lord Mayor cement ever-stronger links with China

Lord Mayor Ian Luder, the Ambassador for UK-based financial services, headed a City business delegation to Beijing, Shanghai, Chongqing and Hong Kong from 29 May to 9 June.

Lord Mayor Luder, whose business party includes leading UK-based financial and professional services firms, met key figures in banking, insurance and financial services as well regulators and political leaders.

Having hosted a meeting with Chinese Vice Premier Wang Qishan in London earlier in May, the Lord Mayor said:

‘The decline in world trade and investor and consumer confidence poses many challenges for both the UK and China. My visit to China will showcase how we can work together to combat the global financial crisis and find new avenues for growth for both countries.

The Lord mayor also encouraged the Chinese companies to be listed in London.

In Beijing, the Lord Mayor met leaders from the Chinese Ministry of Commerce, National Council for social Security Fund and the China Investment Corporation (CIC). He and the business delegates also met financial services regulators.

In Shanghai, the Lord Mayor met Shanghai Vice Mayor Tu Guangshao and gave speeches on accoutancy, capital raising and so on.

Welcoming the State Councils statement to turn Shanghai into an international financial center and a global shipping hub by 2020, the Lord Mayor said:

‘To make Shanghai one step closer in becoming a truly international center, China needs to fill the skills gap and will need to increase its range of financial products. UK education providers can play an important role in developing these skills for the Chinese financial sector, and the City of London has a wealth of experience to share in the development of a diversified range of financial products and role of an international financial center. I look forward to continuing the dialogue and partnership with the Shanghai authorities during my visit.