Tuesday, 10 June 2014

China playing a risky game

Recently it was GSK, highlighted by the Chinese for the corruption in promoting their drug sales in China. Not only was GSK caught, something not really denied, but the Chinese Government has a well focused communications strategy too. Using Social Media, the focus on the corrupt foreigners is quickly whipped into a storm with state owned media also joining in with leader writers in papers piling on the pressure.

Before long GSK was in a very bad place and its future in China very bleak. And for what, doing what everyone was doing in a bent market. Now, this is not to excuse them because in business if you take those kinds of risks, then you can't complain too much if you get your comeuppance.

However, GSK was part of a pattern quickly emerging. Now it is the turn of McDonalds to face the test of Chinese media aggression. A woman was sadly beaten to death by a cultist group in broad daylight and now the Chinese Government is pressing to blame McDonalds for not having security in its restaurant. Clearly the real story is the murderous cultists ability to get away in broad daylight - but as ever with China (and many countries) it is easiest to blame the 'corrupt foreigners.'

A pattern is emerging of trying to undermine Western brands and there are several reasons for this.

1) Strong Chinese nationalism is being promoted by the Government as an alternative and control on any wish for democratic change
2) Corruption is openly rife in China, accusing the rest of the world companies of being behind this serves the Chinese Government well to muddy the subject.
3) Western companies seek market share whilst Chinese companies do too, hurting the Western brands domestically will be seen as helping to promote China own corporate base.

There is little that Western companies can seemingly do about this, particularly McDonalds who surely in business in China to serve food and not provide civil security - but it will be very uncomfortable in the boardrooms of any major Western brand-led company who has China growth as their central strategy, knowing they could be next.

Social media in China too is an interesting issue, perhaps for more depth in another post - it certainly is showing all the signs of being able to be as misused as the printing press and camera were too by repressive regimes.


8 comments:

dearieme said...

A pattern is emerging of trying to undermine British brands and there are several reasons for this.

Oops, that must be the USA I was thinking of.

Nick Drew said...

it all speaks to China - or at least the Chinese govt - seeing itself defensively, as being in a position of weakness

(relative to its undeniably colossal strength)

in business, as in diplomacy etc

AndrewZ said...

According to this article the Sultan of Brunei is introducing a harsh new criminal code based on sharia law. You can bet that the local Islamists will be itching to use it against infidels such as Brunei's large Chinese population. You can be equally certain that the local Chinese and/or their relatives in the PRC will then appeal to the mother country to help them.

Now consider Brunei's geographical position and its historic links with Britain (the army still does its jungle training there). Any mistreatment of the Chinese minority in Brunei would give the Chinese government an opportunity to:

(a) Channel nationalist sentiment in a direction that serves its foreign policy needs

(b) Provide a safe outlet for such sentiment – antagonising more traditional targets like Japan and America could lead to dangerous unintended consequences

(c) Extort some concessions from Brunei, such as cheap oil, support for China's territorial claims in the South China Sea, or the use of ports or naval bases that could be used to enforce those claims

(d) Humiliate Britain, the old colonial power, by showing that it can't protect anyone from Chinese demands

Consider this a potential flashpoint that is worth keeping an eye on.

junglebunny said...

Looking at its geographical location, do you not think it rather odd that not one terrorist has ever set foot in the country?

Now why would that be do you think?

dearieme said...

"Humiliate Britain, the old colonial power, by showing that it can't protect anyone from Chinese demands": no humiliation there, old boy. The buggers wanted independence - well they got it. No business of ours.

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