100 Innovation' slogan impresses Chinese

Brett O'Riley. Photo / Getty Images

Coined as the motto for China's Industrial Co-operatives in the 1930s by New Zealander Rewi Alley, and later curiously adopted by the US Marine Corps, gung ho is taken to mean "work together in harmony".

And that is what New Zealand hi-tech and ICT sector is doing in China, dating back to the trade mission last year led by ICT Minister Steven Joyce, where I took the role of company lead and facilitator in my capacity as CEO of the industry body NZICT Group.

As a mission we adopted the theme of "100 per cent Innovation" to categorise the New Zealand industry, and the nature of the products and services on offer from the companies on the mission.

The message resonated with our Chinese counterparts, who were impressed with the innovative services and products our companies presented. We also uncovered a track record of innovation and commitment in China from trailblazing Kiwi hi-tech companies like Tait Radio and Rakon.

Working with the superbly experienced MFat and NZTE teams in China, we have created a strong bond and understanding of what the companies are trying to achieve, in the true spirit of gung ho. This has been cemented by post-mission reviews, access to market studies and reports, and the establishment of a LinkedIn group for the participants. It may not seem a particularly sophisticated approach, but the ability to share information and opportunities has been key to capitalising on opportunities in the market.

The New Zealand market is also of interest to the Chinese companies. We are a perfect size test market for them to develop as a case study for their capability. Opportunities like new mobile networks (2degrees), mobile devices, submarine cables (Optikor and Pacific Fibre), the Ultra-Fast Broadband and Rural Broadband projects, the Square Kilometre Array project, and more generic opportunities like cloud computing are all of interest to Chinese technology firms.

Long-term relationships are important in doing business in China.

I first encountered the term guanxi while working in Shanghai in the late 1990s. It is all about connections and relationships, but in a much more meaningful and holistic way than those words describe, and certainly very different to other countries. However it does play to the way Kiwis tend to be able to develop relationships, assuming we are willing to invest time and not appear in a rush to close that first deal.

Guanxi is a very important part of doing business, with much time spent developing a good understanding of each party and its motivations. But Chinese companies and technology companies based in China alike are also starting to work at 21st century pace, so while relationship is important, so is New Zealand companies having intellectual property to bring to the table, and the ability to scale. And we certainly do when you look at the companies represented on our first mission, many with world-leading capability:

* Wireless technology and consulting (from Tomizone);
* Specialised low frequency microwave radio solutions (4RF);
* Telecommunications applications platforms (Open Cloud);
* Health information integration (Orion Health);
* Mobile management and mobile training (Mobile Mentor);
* IT support services (Datacom);
* Mobile networks (2degrees);
* Information management and search capability (Pingar);
* Software solutions for telecommunications providers (Mobilis Networks);
* GPS based navigation solutions (Navman Wireless);
* Network management and payment card security (Mako Networks).

The Free Trade Agreement has created a unique advantage for New Zealand. And the Chinese Government and companies are committed to demonstrating the agreement is effective, that they respect intellectual property, and are keen to do business. Working with Chinese companies is not just about access to their domestic market. In the hi-tech sector many companies are potentially global distribution partners, and have scaled rapidly.

Interestingly the Chinese see the FTA as the only latest milestone in a long and positive relationship with New Zealand that dates back to immigration in the 19th century, and of course Rewi Alley, one of the most iconic foreign characters in the history of the Chinese Communist Party.

Other significant milestones were the opening of diplomatic relations by Prime Minister Norman Kirk in 1972, and the role played by Mike Moore when as World Trade Organisation Secretary-General he oversaw their membership to the multi-lateral body.

The business environment in China is still demanding. Formal business is often conducted in Mandarin, and many firms are hierarchical, so NZ companies have to be prepared to be patient and well-prepared.

Some on our mission had been engaged in the market for some time, and having Mr Joyce present was an important potential circuit breaker for securing access to senior Chinese executives who could make decisions and drive timeframes.

When you consider China Mobile has 500,000 people and 750,000 livestock connected to their network, you get a sense of the scale of both the opportunity and the company you are dealing with. We gained access to the highest level of the company, being hosted by their chairman, Wang Jianzhou, who proved a welcoming host and determined to facilitate business for our companies with China Mobile.

Chinese cities are dynamic, with Shanghai in particular being exciting and incredibly innovative as it reprises its role as one of the great trading cities of the world. Be prepared for some of the best restaurants in the world - look out for the sea cucumber and other traditional culinary delights.

Our next step is to head back to China mid-year, with some members of our original mission joined by a new cohort. We look forward to building our China export community and truly capitalising on the opportunity to build significant trade opportunities.

- Brett O'Riley is chief executive of the NZICT Group. brett.oriley@ict.org.nz; www.ict.org.nz.