New Zealand Chinese can help Kiwi companies build a bridge to China

In our latest Action Asia Insight, Julian Nixon outlines the how Chinese Kiwis can help New Zealand companies wishing to connect with China

Kiwi companies can improve their prospects of achieving business success in the Peoples’ Republic of China by tapping into the knowledge and connections of Chinese in New Zealand.

This is the view of members of Asia Bridge, a project established by the Future Auckland Leaders Programme (FALP) to connect Asian Aucklanders with Auckland business and improve the outlook for New Zealand business in Asia.

Kenneth Leong, whose membership on the Asia Bridge project was sponsored by Asia:NZ, said “New Zealand companies could benefit from introductions made by Chinese Kiwis that could help them gain a foothold in a market that is becoming too big to ignore.

“In this sense, local Chinese can help Kiwi companies build a bridge to China, which is now New Zealand’s third-largest trading partner,” said Mr Leong who is Director at Euroasia Language Academy in Auckland.

“Trade between the two countries is projected to increase as the Free Trade Agreement progressively takes effect,” he said.

“Building bridges with Chinese New Zealanders naturally involves gaining a better understanding of Chinese culture,” he said.

Distinctive elements of Chinese culture include Confucianism, mianzi (face), keqi (guest behaviour or an act of courtesy) and guanxi (beneficial relationships). Causing someone to lose face can damage business negotiations and according to Confucianism, everybody has an assigned place. The expectation is that a guest will be courteous.

FALP participant, Ben van Delden of KPMG said “New Zealanders tend to establish business relationships quickly. In contrast, Chinese tend to take a long-term view on business arrangements because it takes time to build trust.”

While New Zealand companies can learn from their experiences, China presents big challenges to foreigners on many fronts. With a population of more than 1.3 billion, the sheer scale of the country can be daunting and the role of government can be highly confusing. Foreign entities must liaise with Chinese Government officials in their different capacities as regulator, competitor, partner or customer and each region has its own particular set of requirements. Navigating through each approval process can be frustrating, time consuming and expensive.

Supporter of the Asia Bridge group, Andy Hamilton said “the typical Kiwi approach is to get on a plane and go the country where they want to do business without conducting extensive research.

“But nine times out of ten this approach doesn’t work for business trips to China, where obtaining the necessary regulatory clearances, finding the right business partners and identifying niche markets for goods and/or services requires planning, attention to detail, persistence and focus,” said Mr Hamilton of The Icehouse, a business growth centre.

“A common stumbling block for Kiwi companies is that they often don’t have a value proposition because they are in an early stage of development. In China, where the competition for business is fierce, a firm’s offering must be well thought out in order to be successful,” he said.

In developing a winning strategy, consideration must be given to perceptions in China that New Zealand is an agricultural country that only produces commodities such as dairy products, meat, wool and to a lesser extent products such as honey and seafood. Most of these products require further processing. So a technology company, for example, will face the challenge of building its profile and credibility as the provider of technology products or services.

Mr Hamilton said “once obstacles have been overcome, business success can be achieved quickly in China, more quickly than in other Asian countries.”

Mr Leong said “Chinese are resourceful and practical when it comes to doing business.”

The adaptability and extreme pragmatism of Chinese is underlined by Deng Xiaoping in his famous remark: ‘it doesn’t matter if the cat is black or white, so long as it catches mice’.

But New Zealand companies are not networking with New Zealand Chinese who have extensive contact with Chinese communities internationally, according to a recent study: Chinese Businesses and the Transformation of Auckland, published in July 2009 by Asia:NZ.

The study revealed that Chinese business owners in New Zealand depend extensively on other Chinese for employees, suppliers and customers due to a lack of local networks and difficulties with the English language.

However, the study also provided evidence that local Chinese maintain networks with family and business partners in China. Half of the Chinese who were born in China but are now living in New Zealand travel internationally to support their businesses and 90 percent of them travel to China. Furthermore, 81 percent of Chinese born in Asia (outside China) but who are now living in New Zealand, and 30 percent of Chinese born in New Zealand, have business relationships with overseas Chinese communities.

Mr van Delden said “the study findings highlight that Chinese living in New Zealand are an untapped resource for New Zealand business looking to expand into China.

“In light the challenges standing in the way of business success in China, Kiwi companies would do well to establish connections with local Chinese before heading off to China on business trips,” he said.

Dr Gloria Lan Ge, Associate Director, New Zealand Asia Institute, points out that New Zealand Chinese with connections here and in China could be a good source of employees for New Zealand companies in China.

Mr Leong said “people from the Asian and Auckland-business communities are expressing support for Asia Bridge and we are currently working on practical initiatives to bring business people together in order to gain a better understanding of the challenges and opportunities. Asia Bridge will report its findings to the FALP.”

FALP Director, Lorraine Mentz, said “Asia Bridge project members will continue to foster dialogue between New Zealanders of Asian origin and New Zealand business while gaining experience in how to conduct business in Asia.”

FALP is currently recruiting for the 2010/11 cohort. For details, please contact Lorraine Mentz on 0274 795 037 or lorraine.mentz@aucklandnz.org.

- By Julian Nixon

The author is Director at Pacific Channel PR, based in Auckland. He has lived in Shanghai and Hong Kong.

Related page:

Read the Chinese Businesses and the transfomation of Auckland report in our knowledge and research section

Article uploaded: 21 August 2009