Doing business in China: Politics is still in command

February 12, 2018 16:52
Mercedes Benz's use of a quotation from the Dalai Lama triggered a firestorm among Chinese people who view him as a Tibet “separatist” rather than a fount of wisdom. Photo: Reuters/EJI

People love quotes, especially inspirational ones. Chairman Mao Zedong’s words, “The Chinese people have stood up,” spoken in 1949 after the communist triumph in the civil war, still resonates among many, even if they don’t remember exactly where and when the words were spoken.

So popular are sayings that America’s Chinese restaurants serve “fortune cookies” with Oriental wisdom printed on a tiny slip of paper hidden inside a sugary cookie. These are one-liners, often humorous, such as “Confucius say, Man who jumps off Empire State Building is leaping to a conclusion.”

Such is the demand for quotations that there are websites that provide quotes for all occasions, from Confucius, Abraham Lincoln and, not surprisingly, the Dalai Lama.

Some of the 82-year-old Tibetan monk’s aphorisms sound like candidates for fortune cookies, such as “In order to carry a positive action we must develop here a positive vision.”

Companies, too, seek quotes to burnish their image and to sell their products. On Feb. 5, Mercedes Benz posted an advertisement on Instagram with the quote: “Look at situations from all angles, and you will become more open.” Below a picture of a white Mercedes Benz on a beach was the line, “Start your week with a fresh perspective on life from the Dalai Lama.”

The quotation, an injunction to study situations carefully before taking action, was innocuous. But the mere mention of the Dalai Lama triggered a firestorm among Chinese people who view him as a pro-independence Tibet “separatist” rather than a thinker who is the fount of wisdom.

Mercedes-Benz the next day issued an abject apology, saying that its post had contained an “extremely wrong message”.

“We will promptly take steps to deepen our understanding of Chinese culture and values,” the apology said, “to help standardize our actions to ensure this sort of issue doesn’t happen again.”

On Feb. 9, the People’s Daily online published a commentary that called Mercedes-Benz an “enemy of the Chinese people”.

“Holding the smelly feet of the Dalai Lama makes you the enemy of the Chinese people,” the editorial writer said.

Daimler isn’t the only foreign company to get into political trouble in China in recent weeks. Last month, Delta Air Lines, the Spanish apparel maker Zara, and Marriott International all had to apologize. They had listed Hong Kong and Taiwan as countries. Taiwan is self-ruled, albeit claimed by China as a province. But Hong Kong is definitely part of China.

It seems that these foreign companies neglected to do basic market research. Where Daimler was concerned, the company evidently had no idea that the Dalai Lama, while highly respected outside of China, is likened to the devil within China.

The company no doubt thought that it was quoting a revered figure whose image would help sales in China. It had no idea that it would have the very opposite effect.

But the fact that potential Chinese buyers of the Mercedes Benz reacted so emotionally to the name of the Dalai Lama – not to the content of what he said – shows how difficult it is to do business in China, and how business and politics cannot be separated, because to the Communist Party everything is political.

It is true that China, when convenient, says it separates politics and economics but, as Mao used to say, they need to put politics in command.

This is not a new strategy. Last year, China imposed economic sanctions on South Korea in an attempt to pressure it not to install the Thaad anti-missile system, which China saw as a threat to its own security.

Five years ago, at the height of a territorial dispute, anti-Japanese riots broke out across China and cars were overturned on the streets and burned. China suspended exports of rare earth to Japan – another sign that in economic dealings, ultimately politics is in control.

For a while, Japanese companies signaled that they could not do business under such conditions. Some diverted investments to Southeast Asia. But ultimately, the attraction of the Chinese market was such that most Japanese companies realized they couldn’t just up stakes and leave. And the Chinese know this too.

The People’s Daily commentary on Mercedes says it all: “To do business in China, don’t be an enemy of the Chinese people.”

Foreign companies that want to do business have little choice but to be sensitive to China’s political sensitivities. To prevent themselves from being labeled enemies of the Chinese people, these companies must constantly update themselves on China’s current list of enemies and act accordingly.

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Frank Ching opened The Wall Street Journal’s Bureau in China in 1979. He is now a Hong Kong-based writer on Chinese affairs.