Posted on NZ Herald - 24 May 2010
by John Drinnan
by John Drinnan
The hazards that a New Zealand firm faces in doing business in China are well known in the wake of Fonterra's Sanlu disaster.
There may be a pot of gold at the end of the rainbow for New Zealand exporters, but old hands know there are obstacles along the path.
Hill & Knowlton Asia-Pacific director Viv Lines says increased Chinese investment into New Zealand raises other public relations challenges.
"How does a New Zealand company 20 per cent owned by Chinese investors come to understand and communicate with its new stakeholders?" he said.
The differences between Chinese and Western business are well known. Some are about structure.
"Structures were easy to fix and it was the cultural things that were harder," he said.
Lines is a keynote speaker at this week's conference for the public relations industry. Having worked in Asian and Middle Eastern markets for the past 25 years, he will focus on the growth opportunities in those markets.
He says New Zealand is relatively advanced in China but there are a lot of opportunities in India.
With the growth of sovereign funds looking at investment in Western markets - sometimes seeing share prices as cheap - Chinese investors needed to take PR advice on their new markets - including New Zealand.
Haier - which took a 20 per cent stake in Fisher & Paykel - had a global footprint and was aware it had to understand this country. "They will bring a different perspective to marketing and employment.
"They come from a different environment - there is a lot more centralised control for these companies back in China, that can affect the approach to local investors when they go overseas - whether that is imposed on the local operation, or whether they are left to get on and do what they do best.
Richard Grant, the executive director of the Asia New Zealand Foundation, agrees that public relations advice is important. Beyond the specifics of Chinese manufacturing deals for New Zealand products there was a case for intermediaries, he said.
"It depends on the size of the company, but public relations is a major issue for understanding the culture," he said.
"It is not an option to take on a business and rely on Chinese partners to deliver the local expertise, especially in some regions, they are going to play to suit themselves, but it may not suit you," he said.
"You need someone who is on your side."
The major issue for Chinese companies investing in New Zealand to understand was its small scale.
"They need to realise that they are not just dealing with a company but with the public ..."