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Reporters Notebook: Beijing’s Global Song Falls on Reticent Ears

When it comes to going global, China is a land where talk is cheap. The “One Belt, One Road” campaign has created a frenzy for such global talk among Chinese companies over the last couple of years, with just about anything now getting classified as a part of that initiative even if it was in the works well beforehand.

The fact of the matter is that China went global long ago, at least in one sense, since it manufactures huge amounts of goods that ultimately end up being worn, played with and used in foreign lands. But the reality is that most of those goods are bought by big foreign brands and trading houses that have lots of expertise in marketing and providing support services that Western customers expect.

Then there are Chinese companies, which are very good at building things but often not much else. Some companies are also quite adept at bending the rules – something foreigners rarely do in China for fear of criticism and also potentially getting kicked out of the country. But when it comes to operating abroad, these Chinese companies find themselves in the unfamiliar situation of being on a much more level playing field with their foreign rivals, including similar cost structures and being held to similar operating standards.

I got my latest take on the subject at a Caixin-sponsored luncheon in Davos, where I got to meet the chairman of the recently-listed Deppon, one of China’s top parcel delivery companies. I also got a taste on the subject, so to speak, from a written interview I did with the CEO of Yili, China’s top dairy that also has some global aspirations.

Anyone who knows me will know I’m quite cynical when it comes to Chinese government campaigns, which often can have a certain “flavor of the day” feel about them. A few years ago it was “The China Dream”, and then later it became all about the new Free Trade Zone that was going to revolutionize China’s financial services market from a small area in Shanghai.

The “Belt and Road” initiative, as many call it now, is the latest government campaign to take center stage. It quickly became a part of the everyday vernacular, fueled in no small part by state media that took every opportunity to plaster the campaign’s name all over its pages and websites. Companies big and small, private and state-run, were also quick to jump on the campaign, suddenly declaring their total allegiance to going global.

Never mind that Belt and Road was really meant as an infrastructure-building campaign. Big consumer companies like Yili also suddenly were catching the fever, and announcing their own global campaigns that were rebranded with the Belt and Road name, which was originally meant to refer to countries along the ancient land- and maritime Silk Roads connecting China to the West.

Yili actually did make a somewhat insightful comment in its response to my written questions, with CEO Zhang Jianqiu noting that Chinese companies were entering a new phase where quality would become the new focus rather than just pumping out millions of goods at the lowest possible price. Such a mentality is certainly a fundamental step before any company can seriously consider going out, since reliable products and good supporting services will inevitably be critical in any overseas endeavor, especially in the West.

My lunchtime chat with Deppon Chairman Wilson Cui proved similarly insightful, as he talked about the challenges of going abroad. Nowhere was there any mention of Belt and Road, thank goodness, and instead there was some real thoughtful talk about what an alien landscape overseas markets posed for Chinese companies used to doing things a certain way.

In a way, I found both the Yili and Deppon approaches a nice change from what I see in the papers all the time and at big forums. It’s almost inevitable that Chinese brands will go abroad and find some success, which we’ve already seen from the likes of gadget makers Lenovo and Huawei. But that pair have been at it for more than a decade now, including many slip-ups along the way. Similarly, I expect many of these new worldwide wannabes will require similar amounts of time before they find their own place at the global table.

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