English

4

May 2013

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CHINA’S MIGRANTS ARE ‘KEY TO UK BUSINESS SUCCESS IN CHINA’

Cultural exchange: Professor Xiaohui Liu says that marketing

in China is about connections and relationships.

Image:

Loughborough University

If enterprising UK companies want to get a foothold in China, they need to employ Chinese migrants in key positions.

That is one recommendation from a respected academic working in the UK, Professor Xiaohui Liu, as a result of her research into the knowledge transfer between companies in China and the United Kingdom.

Professor Liu – from Loughborough University, central England – found that Chinese people who are educated in the west and employed as executives or managers by major UK firms are “the key to success” in China’s burgeoning market.

In research funded by the British Academy, Professor Liu interviewed 12 Chinese migrants in the UK and eight of their counterparts in China with whom they did business. Data was collected through interviews and observations.

She said that the Chinese personnel all regarded themselves as “special” because they were viewed as “insiders” by the British and the Chinese, and acted as a bridge between the two cultures.

Professor Liu is writing a paper called: It does not matter which language they speak – Chinese migrants and inter-firm knowledge transfer between the UK and China.

Her findings are important at a time when human mobility has increased dramatically, with the number of international migrants rising from 75 million in 1960 to 214 million people in 2010.

Professor Liu, who is from Loughborough University’s School of Business & Economics and an expert on knowledge flows and human mobility, said: “We interviewed 12 Chinese migrants in the UK, people who work for the UK companies. We wanted to look at their role in knowledge transfer between UK firms and Chinese firms.”

“They are a special group because they are bilingual and have a bicultural background. They act as a link between British and Chinese firms. They are the ones who pave the way in how to do business with British and Chinese people.”

“They are considered as insiders by both sides. They have the UK company’s identity, but once they get to China the Chinese say ‘you are one of our own, so I can talk to you’. Twenty people all said the same thing. They feel important because they can make things happen,” she added.

Professor Liu said migrants from China are vital to UK businesses that want to capture a big slice of the growing Chinese market because they are accepted back home.

She continued: “There are quite a lot of barriers between British culture and Chinese culture. The Chinese people do not understand how the British people behave and do business.

“The British have difficulty in understanding how the Chinese behave when they say, ‘Oh it’s nice’ and nod their heads, and six months later say, ‘I did not agree anything’. It’s just politeness.”

“If British companies want to grow business in China or attract Chinese firms to the UK, they are the key. And if they do it with Chinese people they can do it with Indian people and African people.” These findings can be generalised. Everything is global.

“In the past we sold and bought goods. But now people move around. My research is with highly skilled migrants who are educated in the west, are bilingual and operate in two systems. They are very important, important for China, important for the UK.”

Professor Liu has also been involved in a joint project with Professor Jiangyong Lu, of Peking University, which gives an insight into why returnee-led companies and local Chinese companies in Zhongguancun Science Park – China’s Silicon Valley – perform differently.

She found that while the companies led by Chinese people who had been educated and trained in the west were strong on innovation, they were out-performed financially by companies led by local entrepreneurs who were better at marketing.

Professor Liu added: “Marketing in China is not like marketing in the west. It’s more about connections and relationships. In China we call it guanxi. They face institutional barriers when they want to commercialise their technology or innovation. It’s not enough if you only try to create patents and technology if you don’t have the capability to commercialise it.”

She believes that China’s government should provide support to returnees to help them turn new ideas and innovation into a successful business.

By Richard Maino