Good PR Crosses Cultural Barriers

Posted on NZ Herald - 24 May 2010
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 ..."

Time to Bridge Business Gap with Chinese Community

Posted by NZ Herald - 17 July 2009
by Lincoln Tan

The Auckland business community is failing to maximise the economic potential of the Chinese community which has become an important part of the city's retail landscape and provides a link to trade with Asia, a study found.

The Asia New Zealand report, entitled Chinese Businesses and the Transformation of Auckland, will be one of the papers discussed at the Rising Dragons, Soaring Bananas Conference at the University of Auckland Business School tomorrow.

"It appears that many local institutions have yet to realise the importance of Chinese business development," the study by Paul Spoonley and Carina Meares from Massey University said.

"These activities are a major source of interest internationally, as Chinese immigrant communities play an important role in business innovation, entrepreneurial activities and international trade.

"It was therefore surprising to see that these relatively new - but still very important - dimensions of Auckland's economy were not given more attention in the royal commission's report on the governance of Auckland or the Government's initial response to the report."

Researchers interviewed 39 Chinese business people - 10 local-born, 11 Asia Pacific-born and 18 China-born - to look at how different Chinese communities have responded to the challenges of setting up businesses in Auckland.

"The royal commission's report and the Government's response both acknowledge the cultural diversity of the city, but do not explore what this means for the contribution of such businesses to Auckland's productivity, innovation or future growth," the report says.

It said Chinese businesses are an important source of innovation, and contribute to the city's cultural and economic diversity and are important contributors to international trade. But because of a lack of local networks, and English language difficulties, many depend extensively on other Chinese for employees, suppliers and customers.

Many business owners make regular trips to maintain relationships with overseas contacts, especially in China.

A feature of Chinese businesses is the development of ethnic precincts in Auckland, such as Dominion Rd in Auckland City, Northcote on the North Shore and Meadowlands in Manukau City.

Only 22.2 per cent of the China-born participants said they spoke English "well", and 94.4 per cent said Mandarin was their main language, although 63 per cent of Asia-Pacific born claimed to be conversant in English.

All local-born participants, claimed they had experienced discrimination in New Zealand. But while 25 per cent of New Zealand-born thought there was "a lot of" discrimination against them, none of the China-born saw this as an issue.

"One possibility is that the locally born were more attuned to the language, including body language, that signalled distaste and hostility."

Local Chinese business owners often expressed frustration in dealing with local institutions, such as banks.

The report said New Zealand business organisations should increase its understanding of the Chinese business community, and more opportunities should be provided for Chinese business owners to establish links and networks with non-Chinese businesses.

By Lincoln Tan 

Top tips: Breaking into Asian markets

Posted on NZ Herald - 05 August 2007 

By Bo Li of Bananaworks Communications

Q. Are NZ companies just really too small to compete with the rush of global giants into China?

A. Nothing is too small, nothing is too big. The China market can accommodate anyone and everyone. Being a global giant has its advantages, but small businesses can still find a niche.

Q. What are some common mistakes companies make when looking to expand into China?

A. It's easy to think of China as a single market, whereas there is a vast range of markets. One pitfall is lack of research and market intelligence into local Chinese resource acts or reliable agencies in China. Another factor is New Zealand businesses' lack of preparation to deal with and/or live in a foreign country.

Q. Are people's fears about the security of intellectual property justified?

A. Yes, no one can guarantee that your IP is not going to be copied, but businesses should see this from the flip side - if your IP has been copied, this means it is a great idea, thus creating competition.

Q. Are there cultural sensitivities NZ companies should be aware of when starting out in China?

A. Knowing Chinese culture and traditions is important. Bananaworks has consistently helped New Zealand businesses understand Chinese business culture.

Q. Do we need deep pockets to commercially compete in China?

A. It depends on the type of business and sector in which it is located. If you don't gain the market share straight away, it becomes harder and harder in the future.

Q. Are some of the early fears about corruption justified? Is there good local support on the ground should things go wrong? Is the local legal system good to deal with for Kiwis?

A. Corruption prevails everywhere. China is not exempt. The best solution is reconciliation and negotiation if anything goes wrong. This is certainly seen as the Chinese way to resolve it. Seek out your Guan Xi (connections) to assist. The Chinese believe once an enemy, always an enemy. The legal system is complex.

Q. What sort of local support in China will we need? Lawyers, accountants, other advisers?

A. All you need are Guan Xi. See it as a toolbox that will open up myriad resources, skill-sets. Or seek foreign firms for professional services, although these are costly.

Q. Is it really the land of plenty? Are the increases in standards of living we hear about happening?

A. Not really. China is a vast territory, but it has limited land resources. There have been significant increases in the standard of living in the past 10 years, especially in cities where property prices soar year by year, brought on by demand for increased living space, modern kitchens within homes and the rise of the interior design market.

Q. What sort of business opportunities will the Beijing Olympics bring? What sort of changes in China?

A. All eyes will be on China. They will take centre stage and, and this platform will be used to project a dynamic and new Brand China.

By Bo Li of Bananaworks Communications

* Doing business with China is being discussed at the Bananas NZ Going Global international conference in Auckland later this month. Check it out at www.goingbananas.org.nz