China will stay open for international business - Tom Doctoroff

Tom Doctoroff

Worries are mounting about China´s international stance, and increased difficulties foreign companies and organization experiences in the country. But China is unlikely to follow a course to isolationism and will act pragmatic, writes China veteran Tom Doctoroff in the Huffington Post.

Tom Doctoroff:

Despite recent belligerence, China has rejected isolationism. It has assiduously pursued leadership roles in multinational organizations such as the World Health Organization, the G20, the World Economic Forum and, most recently, the International Monetary Fund. The “One Belt, One Road” is development strategy and framework proposed by President Xi that focuses on connectivity and cooperation among countries primarily between the the PRC and Eurasia.

In return, many overseas companies, from mobile phone and auto manufacturers to airlines and hotels, have achieved sustainable profits and broad scale in the mainland market. Compared to Japan, regulatory hurdles are simpler, although still opaque and, according to the America Chamber of Commerce, becoming more onerous since 2013. Still, on the street and in the lanes, foreigners’ are surprised by the friendliness and openness of ordinary Chinese. Eyes are bright, thirsty for knowledge.

However, multinational engagement - economic, political or social - is über-practical and sharp-edged. Joint ventures are meticulously negotiated; contracts demand technology transfer to domestic partners. Affairs between foreigners and locals are rooted in material gain, not romantic satisfaction. Casual chats are English practice; American Chamber of Commerce “mixers” are for networking, not finding friends.

The pragmatism inherent in China’s broadened worldview is reflected by a new passion for travel. According to the Chinese Tourism Authority, outbound departures reached 120 million in 2015, up thirteen percent year-on-year. Despite limited incomes, figures will continue to skyrocket. But the Chinese do not travel to discover cultural riches. Expensive hotels and restaurants are unnecessary extravagances, indulgences that yield no return. The real motivation is buying luxury brands. According Global Refund, a company specializing in tax-free shopping for tourists, in 2015, the Chinese account for fifteen percent of all luxury items purchased in France but less than two percent of its visitors. Trips to Paris and London are expensive but they are not sunk costs; they are status investments. They reinforce identification with a sophisticated middle class lifestyle. Today’s Chinese “collect destinations” and post them on micro-blogs as ego puppy uppers and use social network platform to convert “experience” into social currency.

More in the Huffington Post.

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