It’s a tough time to be a Chinese entrepreneur in the United States. On one hand, they’re criticized for being too Chinese. On the other, they’re criticized for trying to be more American. Damned if you do, and damned if you don’t. Not a very American way to treat honest businesses if you ask me – but let’s get to that a bit later.
by Chris Pereira
My company assists Chinese companies in positioning themselves effectively in the US market. I witness the challenges that these businesses face first-hand every day, with challenges compounding particularly after the downward spiral of US-China relations following Trump’s initiation of the trade war. I was recently interviewed by Wall Street Journal, South China Morning Post, and many other mainstream English and Chinese media regarding the impact of American policy on Chinese businesses. Many of my recent insights have come from having spent the past 4 months in mainland China and Singapore speaking to clients, partners, and investors. In the coming weeks and months, I will explore the consequences of being labelled as “Chinese” for businesses in the US, the trend of Chinese companies attempting to localize their image and operations, and the importance of equal treatment for all companies operating in the US regardless of their country of origin. So let’s jump in!
Being labeled as “Chinese” can connect a company to geopolitics, even when there is no real connection between the company and the Chinese government. This can be very hazardous for businesses in the US market, particularly in the current environment of heightened geopolitical tensions and tough recessionary business conditions. As a result, we are seeing a growing trend among Chinese companies that are attempting to “de-China” themselves and localize their image and operations. In other words, Chinese companies are attempting to better understand another culture and localize their operations. Sometimes it’s done awkwardly. Sometimes it’s done badly. There are cringeworthy moments. And sometimes mistakes are made. But the attempts are being made, and it’s a good thing that localization is on the minds of Chinese companies – it marks a new era of internationalization and shows Chinese companies are making attempts to integrate overseas.
This strategy is not new and was pioneered by American multinationals after World War II – it’s basic localization and – ironically for the anti-Chinese crowd – it’s a very American thing to do. To be more local, Chinese companies are investing heavily in market research to better understand the local landscape. Based on these insights, they are also hiring more local teams and partners in the US to gain a stronger foothold in terms of relationships. Moreover, some Chinese companies are positioning themselves as being from Hong Kong, Singapore, or even just New York, despite having an official headquarters in China. Sound familiar? It’s an American strategy.
It is important to note that what makes the United States a truly powerful and great place to live and work is the fact that rules here are applied equally to everyone. Regardless of their country of origin, all companies operating in the US have traditionally been subject to the same rules and regulations. It shouldn’t matter where you’re from, or who controls your company. The reason for this is simple: equal rules for all market participants are a foundational element of America’s prosperity and future success. If companies break the rules, they should be punished. If they do not break the rules, they should be able to compete freely without interference from the government. It shouldn’t matter where you’re from.
I believe that “crackdowns” on Chinese companies are not only useless but also erode the trust and foundation of America’s success. Moreover, if the US cracks down specifically on Chinese companies, the smartest Chinese spies would go to the companies that have the least scrutiny, which would be the wholly-owned and operated American companies that are trusted and left mostly unhindered by investigations into “foreign influence.” Therefore, equal treatment for all companies operating in the US is not only fair but also serves national security interests.
Recently, e-commerce giant Shein moved some of its assets to Singapore and its owner applied for Singaporean citizenship. This decoupling from the homeland may become more popular among Chinese businesses as they attempt to change their identity by moving their headquarters and assets to a third country. However, it is important to remember why this is happening – it’s because the US is “cracking down” on Chinese companies. Anyone who truly cares about the prosperity of America would agree that when it comes to bad actors at home and abroad, it does not matter where a company “is from”. What matters is how the company behaves in the US.
Chinese companies face unique challenges in the US market due to geopolitical tensions and tough business conditions. To succeed in this environment, it is essential for Chinese companies to localize their image and operations. However, it is equally essential for all companies operating in the US to be subject to the same rules and regulations as everyone else. Only through equal treatment can the US maintain its foundational element of equal rules for all market participants and ensure its continued prosperity and success.
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This article was first published by LinkedIn .
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