The violent protests in Tibet since March signaled the beginning of what could be the most controversial Olympics in history. The President of France has not ruled out the option of boycotting the opening ceremonies. US President George Bush called President Hu Jintao of China to express concerns over the crackdown. As alarming as the turbulence may sound now, the political noise is expected to gain momentum worldwide until the Olympics start in August.
Internationally, no country will boycott the Olympics because the political price is too high for many politicians. Domestically, the majority of Chinese support the crackdown, not because of ignorance as suggested by international media, but because of “face.” Putting on the best Olympics is much more important than freedom for Tibetans.
Although China seems to be holding up politically during the Tibet crisis, it is losing the war of public opinion due to perceived lack of credibility. The Chinese government-controlled media seems to carry little weight in global public opinion. The censorship of CNN in hotels and the expulsion of journalists and tourists out of Tibet further damage its image. Without credibility, public opinion judges the Chinese government negatively no matter what it says.
Even if many people believe international media is somewhat biased, many still side with the West. Although the world is focusing on Tibet and the Olympics now, the current crisis barely scratches the surface of a much deeper problem—that of “Brand China.”
“Brand China” permeates politics, society and business. In politics, China is under attack on human rights, from Darfur to Tibet. Steven Spielberg resigned from his advisory role in the Olympics Opening Ceremonies because of China’s role in Darfur.
In society, Chinese citizens protest against the misdeeds of local governments every year. In business, product safety changed the China brand from being cheap to being poisonous. When Chinese toothpaste was found to be unsafe, the US Food and Drug Administration advised consumers to discard all toothpaste made in China, regardless of brand.This was a direct attack on China as a country. Every tiny mishap in China has been magnified under the spotlight because the world expects China to behave like a superpower. Unfortunately, China doesn’t appear ready to be a superpower, particularly in building, as a country, a trusted brand.
Trust is a big obstacle in doing business in China. Finding a vendor to provide quality service consistently, hiring a manager who is loyal to the company, buying from suppliers who are compliant with environmental, labor, and safety standards, all of these are complex tasks in China.
Lack of trust is the most costly item of your business, even if it is not reflected in your financial statements. Labor cost may seem low in China, but the cost of doing business in a “low-trust” environment may just make up the difference. The hidden cost usually manifests itself in terms of delays, controls, monitoring problems, and the worst of all, brand damage. Mattel’s CEO learned this lesson the hard way when he apologized to the whole world on CNN about having to recall 20 million toys made in China.
How can you do it right? First, build in at least 25% buffer of time and money on your most conservative budget. Nothing goes as planned in China. Second, structure long-term incentives for partners and employees. Always assume that self-interest trumps integrity. Third, never take your eyes off your business.
There is a long way to go to build a trustworthy “Brand China.” When I asked my students which country in Asia has the most trustworthy managers, almost all of them said, “Singapore.” The respondents were all Chinese. It looks like even the Chinese don’t trust the Chinese.
print ed: 05/08