Chen Yingqun and Jiao Xiaoli, China Daily, Updated: 2014-04-01 07:27
Zhao Qizheng says when Chinese business people operate in the international marketplace, they are representing not only their company, but also their country. Chen Yingqun and Jiao Xiaoli report.
Many Chinese companies dismally fail the test of diplomacy when they go abroad, says Zhao Qizheng, former chairman of the Foreign Affairs Committee and former minister of the State Council Information Office. Not only do they act clumsily, but they also have little understanding of the concept of public diplomacy, says Zhao, who is widely regarded as a pioneer in Chinese public diplomacy.
"We've done research on Chinese companies going overseas and found that many businessmen are good at talking business, but not at social dialogue," Zhao says.
Zhao Qizheng's latest book, Public Diplomacy in World Business, is a manual for companies that target the global market. Zou Hong / China Daily
Chinese businesses often operate overseas exactly as they do in China, overlooking cultural differences, which can cause problems, he says.
Definitions of the term public diplomacy are many and varied, but for Zhao, it means helping the rest of the world at all levels, including individuals and business, understand the country.
Zhao, author of Public Diplomacy in World Business, a manual for companies that do business overseas, or aim to do so, says that after decades of rapid development, Chinese companies are perfectly placed to target global markets and overseas investment is going to surge.
"China's GDP accounts for about 10 percent of world GDP, and its direct overseas investment accounts for about 3.2 percent of the world's, a gap that represents great potential for Chinese companies to go global," Zhao said at a recent forum in Beijing on public diplomacy.
In 2013, China's outbound direct investment increased by 16.8 percent to $90.17 billion, according to the Chinese Ministry of Commerce.
Against that background, Chinese entrepreneurs have become important torchbearers in the world of public diplomacy, and it is crucial they equip themselves with the skills that public diplomacy demands, says Zhao, who, as the minister of the State Council Information Office between 1998 and 2005, helped refine the government news-release system.
That means when they conduct business in other countries they should represent China and be able to tell its "stories".
"As a result of globalization, many people, particularly businessmen, may well feel that a country's international reputation will have a direct bearing on the kinds of things it can do. If foreigners think Chinese are not credible, that will affect the perceived credit worthiness of Chinese businessmen in overseas lending markets.
"You cannot separate culture and people. When Chinese entrepreneurs do business with the world, their behavior, products and after-sales service all symbolize Chinese culture and provide a window for foreigners to understand China. Whether they succeed or fail, they are representatives of China."
Before becoming involved in public administration, Zhao, 74, was a nuclear physicist. Since 1984 he has held several important positions in Shanghai, including that of vice-mayor, and played a crucial role in the development of Pudong, now a symbol of China's modernization. It was when working on the Pudong project that he became keenly aware of the importance of public diplomacy.
Zhao says over the past 30 years China has attracted a lot of foreign investment, and many foreign companies have been well received in the country and had great success. However, when Chinese businesses traveled in the opposite direction, the results have often not been so good.
He says problems are often the result of ignorance about cultural differences. In some cases, government and public misunderstandings or sheer prejudice exacerbated by poor company behavior are to blame. That could be something as general as ignorance of local customs or something specific, such as not paying workers full wages or delaying paying them.
As an example of a business owner being attuned to local customs, he cites Lu Weiguang, president of A & W Woods, an international wood flooring company with headquarters in Shanghai. When Lu announced that he planned to start operations in Brazil, someone jokingly suggested that if he wanted to do business there he would need to first lay down a soccer field.
Lu took the suggestion to heart and laid down a soccer field, and let staff take time off once a week to play. He and his business were thus able to get to know local people and integrate into the community. The business thrived.
Zhao says: "If Chinese companies focus only on business investment activities, if they cannot communicate smoothly with target markets' governments, media and social organizations, if they cannot recognize international political situations and avoid risks, or successfully deal with criticism, all those will lead to business failure."
Thankfully, some Chinese business people have become aware of the importance of public diplomacy, Zhao says.
More than a dozen public diplomacy associations have been set up in China, and many businessmen are highly active in the field.
Nevertheless, such people are still in the minority, Zhao says, adding that when he was writing his book, he asked some companies about their experiences but many were reluctant to respond because they did not understand the meaning of the request.
"Many Chinese business people don't know much about other countries, partly because of different languages, culture and market systems. There is a lot to learn. So companies cannot just blindly go overseas. They need to do a lot of homework first, such as finding out about other companies that have done well overseas, and get training from people well versed in international operations."
Zhao, now also the dean of the School of Journalism and Communication of Renmin University of China, says that some training schools and institutes devoted to public diplomacy and allied subjects are being set up in China.
On Feb 26, the university, in Beijing, founded a research institute on public diplomacy, with Zhao as president. He has also written more than 20 books sharing his thoughts about public diplomacy.
Zhao has advice for companies that want to go global. Businessmen can apply principles to every country, he says, such as being aware of local laws and regulations and of local traditions and religion, but each company needs to communicate with different countries in the appropriate way.
"In the Western world when Chinese companies are challenged or are talked about with suspicion, we should argue on the basis of reason and confront the situation directly through the media and political bodies. You can't just stand there and say nothing, which only guarantees failure."
Moreover, while doing business overseas, companies should also be aware of how much social responsibility they are required to shoulder.
As more small and medium-sized companies also go overseas, he suggests they form associations so they can help one another or get assistance from chambers of commerce.
"In no country is it easy for small and medium-sized companies to go abroad. Companies that reckon they can go overseas need to consider carefully where they go. Developed countries may be a challenge for them; perhaps there may be more opportunities in developing countries."
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