How to Lure Chinese Investors
Are the Chinese buying this?
I posted about a month back about how the United States and Hawaii are doing at attracting investors from China. Not very well, apparently.
Forbes published an article this week by Janet Carmosky, CEO and editor-in-chief of The China Business Network, in which Carmosky provides her ideas on attracting the Chinese. Carmosky uses a somewhat psychological approach to what Chinese investors are looking for that may have implications for how companies, states or cities market themselves in China. Let’s compare her ideas with how most American state officials go about investment promotion.
The typical state or city creates glossy brochures and videos that say how nice their community is, how business friendly they are (even if they are not), and they all (except Alaska and Hawaii) show a map of the United States with concentric circles showing how close every other part of the United States is to their location. Most states don’t get much more detailed than that, though there are some good exceptions, such as the Carolinas, which have done an exceptional job of targeting specific industries and even individual companies. Instead of the general stuff, you need research that focuses on the interests and needs of specific potential investors. That means you have to know your target and look at the world through their eyes to successfully sell them on plunking down cash in your state or city. I’ll never forget a Gulf Coast city that sent an investment mission to Taiwan, but had not looked at themselves through Taiwanese glasses. They touted that their port has three (count ‘em, three!) container cranes. The Taiwanese were glancing out the windows at possibly several hundred container cranes in the port of Kaohsiung. Unimpressed.
Carmosky’s idea is that, not only do you have to do the research and target your investors, you need to tell the Chinese exactly what it is they should do in your city or state. She approaches it from differences between American and Chinese views on how wealth is accumulated. The Western concept is that entrepreneurship comes from the individual, from the bottom up. We get the idea, then we figure out how we can do it, then we tell everybody else about it, using external communication to seek buy-in. In China, most ideas are top-down in origin. The center decides what needs to be done, then business figures out how to do it. Communications, except for propaganda, are kept internal. The Chinese, says Carmosky, are programmed to accept propaganda as an instruction for what needs to be done.
While Americans are out selling their ideas, Chinese tend to wait for an instruction on what they should do. Her conclusion is that U.S. investment promoters need to stop selling ideas (my city is nice, my state is close to big markets) and start giving instructions: you need to invest in a new plant in my state, and here is a plan for doing it that has the full support of my government (and also academics, if you can get them). Back that up with details and help to get a project done.
Counter to Western thinking, but she may have a point. It’s also the old concept of making it easiest for your customer to do what you want.
****************************
Following up on my earlier post, I have heard from a realtor friend that a private “investment mission” of Chinese real estate buyers recently purchased about a dozen properties in Honolulu’s ritzy Kahala neighborhood. I haven’t confirmed it yet. I do know there is a Japanese property owner in Kahala who is selling several properties.
