Chinese companies bridging the comms gap in US market

Yang Yuanqing, CEO, Lenovo, uprooted his family from Beijing to Raleigh, NC, when the Chinese computer maker acquired IBM's PC division in 2005.

Yang Yuanqing, CEO, Lenovo, uprooted his family from Beijing to Raleigh, NC, when the Chinese computer maker acquired IBM's PC division in 2005.

With that deal, Lenovo became a global company, and Yuanqing "knew he had to make a personal investment to understand the people and culture here," says VP of global corporate communications Jeff Shafer.

Today, as more Chinese businesses enter the US market, company leaders are attempting, like Yuanqing, to bridge the communications gap between the two countries.

Chinese investment in the US was projected to exceed $8 billion in 2012, which would top the previous record of $5.7 billion in 2010, according to research firm Rhodium Group.

Translation challenges
Chinese companies operating in the US can face different business expectations, cultural and language barriers, and political resistance, so communications is key to surmounting those challenges. The value of corporate reputation is a vital communications lesson for Chinese business leaders entering the US, says Bill Black, senior partner and co-chair of the global public affairs practice at Fleishman-Hillard.

"Coming out of a Communist system, this idea of reputation is a new element," Black adds.

"In China, companies focus more on the quality of products. They have to be educated on how important reputation is."

Chinese firms operating in the US must adjust their communications strategies to be more transparent, agency executives say.

"When [Chinese businesses] come to the US, they think they are being transparent when they are not because our standards are so high in terms of transparency," Black says. "They have to be willing to open themselves up to regulatory bodies and the public. It's been a major adjustment."

Even though it wasn't a requirement, Chinese conglomerate Dalian Wanda Group sought regulatory approval from the Committee on Foreign Investment in the US when it agreed to buy theater chain AMC Entertainment in May, the largest-ever Chinese transaction in the US.

"That gave Wanda a stamp of approval. It enhanced their reputation," Black explains.

US perception

Committee of 100, a nonpartisan Chinese-American group that promotes cultural exchanges, surveyed perceptions of China among the US public in December 2011 and January 2012.

Sixty-five percent of the public and 81% of business leaders say the US should encourage Chinese investment in the US, while one-third of the public say the US should discourage Chinese investment. Increased investment from China in the US will help the US economy by creating jobs, according to 43% of the American public.

Fifty-five percent of the American public held a favorable view of China.

Transparent style
Lixin Cheng, CEO of telecommunications equipment manufacturer ZTE, says his company had adopted a transparent and clear communications style with customers, American influencers, and media "to foster a respectful business environment."

ZTE came under scrutiny in October when a congressional committee said the US government and companies should not do business with ZTE and its rival Huawei Technologies because of potential security threats. The negative coverage scared many potential Chinese investors away from the US, Cheng notes.

"Don't be scared by bad publicity or try to fight with the media," Cheng adds. "Try to tell your story and be positive."

ZTE tells its story by focusing on how it helps local economies and job growth in the US. It also conducts CSR activities in local communities.

"Local groups and stakeholders will be accepting if they hear this [Chinese] company will prosper, keep the workforce mostly intact, and become part of the community," says Jamie Moeller, MD of global public affairs at Ogilvy Public Relations.

Communications execs caution that Chinese companies' messages in the US should be consistent with their messages at home.

"Information circles the globe instantaneously, so it's no longer possible to control messages by market," explains Ketchum partner Paul Cohen.

With that in mind, companies such as ZTE and Lenovo say they consider themselves as global companies. Both firms make an effort to hire local talent and have diverse board members.

"It's about cultures coming together rather than one culture enforcing itself on another," Shafer says. "Our top 10 executives represent seven nationalities. To operate a global company, that is how you become successful."

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