From 12 to 14 June, the Flanders-China Chamber of Commerce took part at the FIT Export Fair in Brussels and organised a China Business Awareness Workshop.

Not only differences in language, but also in corporate culture often present a difficult barrier for business people in both countries. According to a study by the Business School of the University of Science & Technology in Hong Kong, the biggest obstacle for Western business people in China is intercultural.

Communication is a process of information exchange which requires that the parties who are communicating understand each other’s system of symbols, gestures and behavior.

• In this China Business Awareness Workshop participants learned how to communicate efficiently with China. They became aware of the visible and invisible differences between China and Flanders.
• Participants got a general China insight, and a more profound view of the Chinese generations through which they will be able to better position and evaluate their Chinese customer, consumer, entrepreneur – who are all products of recent Chinese history.
• Participants learned to empathize with the socio-cultural context of the ethnic Chinese. They got an insight in Chinese corporate culture and learned to handle specific problems linked to Chinese traditions.

Following an introduction by Gwenn Sonck, Executive Director, Flanders-China Chamber of Commerce, Wim Polet, Managing Director, Chinainkling spoke about ‘China Business Awareness’. A Q&A session concluded the event.

About the speaker:
Wim Polet is a sinologist who first visited in China in 1984. He worked and lived in China and at present is commuting between Flanders and China. Since 1999 he is focussing on “Efficient communication with China’ at China Inkling Cross-cultural Dynamics (www.chinainkling.com)

The Flanders-China Chamber of Commerce and the Province of East Flanders organized a seminar focused on ‘Belgian Customs and its activities in China’. This event took place on 7 June 2018 at the Province House in Ghent.
Following a word of welcome by Ms. Astrid Vliegbergh, Director Economy and External Relations of the Province of East Flanders Government and an introduction by Ms. Gwenn Sonck, Executive Director, Flanders-China Chamber of Commerce, Mr. Eddy De Cuyper, Counselor, Customs Attaché, Embassy of Belgium in China, gave a presentation on procedures and regulations of the Chinese customs and other institutions, which are related to import or export. Mr. Leslie Lambregts, Director of International Affairs, FAVV, gave a speech on the support given from FAVV to local companies when exporting to China.

A Q&A session and networking drink concluded the event.

A new financial hub is rising in Shanghai, aiming to rival those in London and New York. Twelve kilometers south of Shanghai’s existing financial hub of Lujiazui, workers are putting the finishing touches to a glitzy-looking office tower designed by American developer Tishman Speyer. The tower will be part of “the second Lujiazui”. Called Qiantan, the gleaming new area is aimed at appealing to multinational and financial firms, especially, looking for an alternative for costlier and crowded Lujiazui. Of the 1.65 million square meters of new office space planned in Pudong, across the Huangpu River from the city’s historic Bund, over the next five years, more than half is earmarked for Qiantan, according to Colliers International. In contrast, the core Lujiazui area will supply just 310,000 square meters.

In the heart of Qiantan, four overseas developers – Tishman Speyer, Swire Properties, Hongkong Land and Shun Tak Holdings – have already formed partnerships with the biggest landlord, the Shanghai government-owned Lujiazui Group to create mixed-used complexes.The first developer to break ground in Qiantan was Tishman Speyer which built Crystal Plaza. U.S. conglomerate United Technologies and medical equipment maker Medtronic, and Germany’s Covestro are expected to become tenants of the office part of the bustling new commercial complex.

“Our target tenants include high-end financial and ancillary services, and advanced manufacturing and technology firms. We are negotiating leases with medical, auto and other manufacturing companies from the U.S., Europe and the Middle East,” said Wilson Chen, Tishman Speyer China’s Chief Investment Officer, declining to specify any names, however. He said Lujiazui Group undertook the planning and development of the site, while Tishman Speyer was responsible for its design, securing global tenants, and managing the assets. The 2.8 square kilometer Qiantan area is connected by three metro lines, sits next to the Oriental Sports Center, and is near the former World Expo 2010 site.

“Lujiazui’s issue is the lack of amenities. Outside of working hours there is relatively little reason to go there,” said James Macdonald, Senior director of Savills China Research. “But with residential communities and retail space, Qiantan will be a vibrant community that is live 24/7,” the South China Morning Post reports.

The ZTE case has exposed years of negligence and should ring alarm bells about what rigorous compliance really means at Chinese companies hoping to expand overseas, say several Chinese business academics. Many companies fail to uphold the core tenet of corporate governance – which is the “spirit of contract and compliance”, said Gao Minghua, Director of the Corporate Governance and Enterprise Development Research Center at Beijing Normal University.

“Breaking a promise is a big taboo in international society, where laws and rules are stressed and any violation shall be punished accordingly,” said Gao, adding that the ZTE incident exposes deeper roots of the “Chinese way of doing business” which can involve behind-the-scenes communications and bargaining with authorities.

U.S. Commerce Secretary Wilbur Ross announced last week an end to sanctions against ZTE, in an agreement that includes a USD1 billion penalty for the Chinese telecom equipment maker and the installation of a U.S.-selected compliance team at the company. However, the U.S. Congress could still block the agreement.

The U.S. Commerce Department banned sales by U.S. companies to ZTE in April after it was found to have breached the terms of a previous settlement, by paying full bonuses to employees who engaged in the illegal sales of equipment to Iran, failing to issue letters of reprimand to those employees, and then lying about it to U.S. authorities.
“While compliance committees report to the board in international practice, they reported to the President in ZTE’s case, who did not have a grasp on up-to-date information,” said Gao, adding that the Committee should be responsible for maintaining proprietary compliance knowledge, keeping track of compliance requirements and informing decision-making departments on a regular basis. “It is the mentality of people that needs fixing first,” said Gao. “Ill-formed corporate governance is a major issue faced by Chinese companies.”

These comments were echoed by Deng Ziliang, Associate Professor of Business at Renmin University of China, who pointed out that Chinese firms hoping to expand globally should examine if there are any legal and regulatory gaps first. “Chinese companies should have a compliance team with ample staff and expertise to reduce the risk,” said Deng. “It’s obvious that they still have a long way to go.” “Hi-tech firms and those with government backing” should be especially aware of compliance risks, added Deng, as reported by the South China Morning Post.

“In ZTE’s case, company management was aware of the regulations and violated them anyway,” said Liu Wenyuan, Compliance Officer of Beijing-based corporate consultancy firm Key Finder. “While it’s sometimes common in China for companies that don’t obey rules to outdo those that do, it won’t end well to apply these practices overseas,” he added.

Chinese tech companies are deploying their cloud services overseas, and moving up the sector’s global rankings as they do so. According to Charlie Dai, Principal Analyst at consultancy Forrester, there are two key drivers behind their bid to tap into global markets – to better serve Chinese customers’ globalization strategies and to extend their own digital territories. “They could replicate their Chinese market successes in global regions, just as Amazon Web Services and Microsoft are doing in China,” he said.

According to Gartner Research Director Kevin Ji, cloud computing is essentially about economies of scale for service providers. Expanding their coverage lowers average costs and pushes forward global infrastructure delivery. To date, only a handful of Chinese players, including Alibaba Group, Tencent and Huawei Technologies, have appeared as emerging forces in a market currently dominated by Western competitors led by Amazon.com and Microsoft, he said. “Only Alibaba Cloud, Tencent Cloud and Huawei Cloud have straightforward globalization strategies, each with a distinctive approach,” Ji said.

The cloud computing arm of Tencent announced in March the opening of four new data centers to enhance its international cloud computing presence. The new centers offer a range of solutions including storage, cloud security, big data, and artificial intelligence (AI).

“Globalization is an important part of Tencent Cloud’s strategy,” said Qiu Yuepeng, Vice president of Tencent and President of Tencent Cloud. “By offering our advanced cloud computing infrastructure across the globe, we can not only share Tencent Cloud’s technology and expand our portfolio of industry solutions, but also lower costs and increase efficiency across a variety of industries.” According to Tencent, its new data center in Hong Kong serves as Tencent Cloud’s second financial sector-focused facility in the city. Two new data centers in the United States – in Silicon Valley and Virginia – ensure coverage across the country’s east and west coasts. The fourth new data center, in Mumbai, India, will serve as a core hub for Tencent Cloud in South Asia, boosting its total number of available cloud computing zones to 42.

Alibaba’s cloud computing unit launched its first data center in Indonesia in March, aiming to address the growing demand for reliable and scalable cloud services among the country’s small and medium-sized enterprises. Alibaba Cloud has so far entered 18 countries and regions. Its latest push saw the company’s cloud services extend to Turkey in April through a partnership with e-Glober, an Istanbul-based business-to-business (B2B) services provider. Alibaba is banking on Asia and the Middle East to better tap into the Belt and Road Initiative, whereas Tencent is more closely following the steps of its clients.

Huawei’s strength lies in its ties with leading foreign telecom operators, such as Deutsche Telekom, Orange and Telefonica, helping them to build their public cloud capability using Huawei technology. With only a few years of development, some Chinese companies in the sector have started to climb the global rankings. A Gartner report released last year highlighted Alibaba’s high potential, ranking it No 4 globally for “Ability to Execute”, ahead of IBM and Oracle Systems. But Kevin Ji of Gartner said that despite their rapid development, Chinese companies still lack genuine technological breakthroughs and innovation, meaning they have very little in the way of unique differentiation compared with other providers, the China Daily reports.