Lincoln Tan: It's etiquette that seals deals in the land of the dragon

Just looking at what the Chinese market offers must leave many New Zealand businesses drooling.

The world's largest - and probably cheapest - manufacturing base also has the world's largest consumer base with its 1.4 billion population.

Although it is a story not often told here, the rise of China has been one of the greatest stories of the 21st century.

Within 20 years, China is set to overtake the United States as the world's largest economy. Shanghai, a city with more then 300 skyscrapers, now has the world's biggest port.

Among other facts, the Chinese are also the world's largest consumers of icecream, eating 20 per cent of what the world produces. The list goes on. No wonder many New Zealand businesses want a piece of the Chinese pie.

But do we have what it takes to woo the Chinese?

"Kiwis are a long way off from getting in sync with the Chinese," a Chinese friend in the import and export business tells me. "They think they can do business like they do in New Zealand. Go to a place, make a sales pitch, and think people will rush to buy whatever they are selling.

"Many Kiwis still don't understand that in China people do things by relationship."

Relationship, or guanxi, is perhaps the single most important thing to cultivate for anyone to survive the business environment of China.

Too few New Zealand businesses realise that guanxi alone can make or break anyone wanting to venture into the land of the dragon. Even in the age of the internet, business in China gets done over dim sum, not by email.

A Shanghai Daily business reporter says that many Western businesses, including American ones, are doing far better in China than New Zealanders because they realise the value of guanxi. Some even have senior managers based in China whose sole job is cultivating guanxi.

New Zealand enjoys a good reputation in China for many things - such as its clean, green environment and beautiful scenery - but business know-how is not one of them.

"Kiwi businessmen don't know how to buy people's hearts. In fact, they don't even know how to buy people a meal," the reporter says.

Apart from not being able to think like Asians, New Zealanders don't act like Asians when facing the China challenge. Guided by guanxi, Asians tend to look out for their own kind - the Taiwanese give contracts to Taiwanese, and the Koreans will support Korean businesses.

New Zealand businesses tend to go it alone, like a reverse of guanxi, and this is probably an ingredient for failure.

Apart from a poor understanding of Asians, a recent Asia-New Zealand report says there are many things wrong with New Zealand's knowledge of Asia - perhaps a reflection of the poor people-to-people relationship we have here.

An Asia New Zealand Foundation report, Preparing for a Future with Asia, says New Zealand businesses lack the skills to take advantage of opportunities in Asia, that most lack contacts. As well, business managers have little understanding of the complexities of Asian markets and face language and cultural barriers.

The report says most New Zealand businesses are turning a blind eye to the solution right in front of them - that despite a lack of Asia-relevant knowledge, skills and networks within New Zealand businesses, people of Asian descent are discriminated against in employment.

A willingness to engage with the large number of Asians who now call New Zealand home could easily solve most of the problems considered in the report.

Like New Zealand-born journalist John McBeth, who writes for the Straits Times in Singapore, I feel that the New Zealand media is not fostering a better understanding of Asia. He describes New Zealand editors as Euro-centric and writes that Asia takes a distant back seat to developments in Europe, the Middle East and Africa.

The odd thing is that no one really understands why, and, more importantly, what can be done about it. Editors have apparently decided that they know best, offering the excuse that readers simply are not interested. It's the old chicken and egg argument: how can readers be interested when there is nothing in the newspaper about Asia to be interested in?

China is growing and the trend is expected to continue. China's National Bureau of Statistics is expected to report that the economy grew 10.9 per cent in the second quarter, up from 10.3 per cent in the first three months.

Given such facts and figures, there are three ways we can respond.

First, we can do nothing and continue to wallow and lament about how Chinese students and tourists are not coming here - put China in the too-hard basket and look elsewhere. Just like the Kiwi attitude to soccer - if it is too hard to make a mark internationally, then concentrate on a game like rugby where fewer nations compete.

Second, we can go where the opportunities are, as a friend of mine did when Chinese students stopped coming here. He went to Hunan, and in partnership with a Chinese businessman set up a school there to teach English.

Third, we can face reality, work together, and fight for the continued prosperity of New Zealand, so that together we can engage China and Asia.

The Asia New Zealand report is a wake-up call for us all, but we must be prepared to change our mindset.