21 November 2008

Chinese Investors Need Special Aftercare.

At the annual Global China Business Meeting held in Barcelona recently, Ting Zhang, CEO of China Business Solutions, spoke about the importance of providing practical and culturally sensitive aftercare to Chinese overseas investors in Europe.

Speaking at a panel dedicated to ?Chinese Investing Overseas? in the meeting which drew about 400 business and political leaders worldwide, Ting Zhang highlighted the changes of the Chinese outward investment in terms of scope of business, and sector distribution. Chinese investment is moving away from simple trading and catering to sophisticated processing, R&D, consultancy and logistics. Sectors have also expanded to more knowledge-based areas such as telecom, automobile, pharmaceutical, IT and Media.

Competition for quality Chinese investment is increasing, with now many European regions are targeting Chinese companies for inward investment. For example, the investments from China into the UK grew by 13% during in the last financial year and Chinese companies invested in 59 projects in the UK in this period, with altogether 1,337 jobs created or secured by the new Chinese investments. In Germany, China has also become one of its major sources of investors.

Ting also shared her experience about some characteristics of Chinese investors in the UK, having worked extensively with a number of them setting up and operating in the UK.

Firstly, Chinese executives have a different mindset compared to Westerners, or even to other more internationalised Asian investors. For example, Chinese companies prefer to send expatriates to the UK, for cost as well as control reasons. Many of them are reluctant to spend on professional services (like PR and marketing) and hesitant to hire local employees due to cost concern. Secondly “Dipping Toes” is what most Chinese investors (other than the large Chinese multinationals) do when setting up overseas offices. This may explain why the average number of new jobs created by Chinese investors is much lower compared to those from India and Japan. Finally Chinese investors (particularly the senior roles) do not always speak good English and thus feel more comfortable working with Chinese speakers. Their marketing language competence and business communication approaches, such as website message management, are also often poorly developed for western audience expectations.

There is therefore an important gap to be filled in a new Chinese company’s cache of business development expertise, providing them with market specific guidance before downstream mistakes and missed opportunities have brought these weaknesses into sharper relief.  All will recognise the advantage of having dedicated Chinese speaking resources within experienced teams who understand the nature and contrasts of doing business in both China and the UK, Ting Zhang concluded.