US Survey Highlights China PR Shortfall
A new survey on American views about China’s overseas investment is showing just how difficult the road will be for Chinese firms as they seek to gain acceptance in the west. Perhaps not coincidentally, results of the survey by a consulting arm of global advertising giant WPP (London: WPP) were released just a day after the announcement of China’s biggest M&A deal to date in the US. The deal that would see Chinese meat processor Shuanghui International buy leading pork products maker Smithfield Foods (NYSE: SFD) for $4.7 billion drew negative comments almost as soon as it was announced, with at least one US politician and a major trade union calling for a thorough regulatory review. (previous post) Let’s take a look at this new survey from Hill+Knowlton Strategies, which I’ll admit is a bit incomplete because we don’t have any good comparisons with previous similar surveys. According to the survey conducted in May, 51 percent of Americans asked to choose among a list of countries said that China poses the biggest threat to the US economy. (survey results announcement)
The survey further found that 37 percent of respondents believed closer ties with China would be harmful to the US economy, while only 30 percent thought such ties would be beneficial. It also found that 34 percent of Americans said they were uncomfortable with any investment by Chinese firms into their American counterparts.
So, what do I make of these results? The 51 percent of people who worry about an economic threat from China is at once both worrisome but also perhaps a good thing. After all, it’s always good to have strong economic rivals, which creates competition and keeps industries and economies healthy and vibrant. In this case China has simply replaced Japan, which many Americans previously saw as the chief economic rival to the US in the 1980s and early 1990s.
The 37 percent of people who believe that closer ties with China would be bad also isn’t too alarming, since it represents just a third of all Americans. And the survey also points out that nearly an equal number of Americans believe closer ties would be good. Likewise, the 34 percent of Americans who oppose any M&A of US companies by Chinese peers also seems like a high but not alarming number.
Again, it’s hard to interpret too much from these numbers without results from similar surveys in previous years to determine how sentiment is trending. I suspect that despite these somewhat negative findings, the broader trends may actually be more positive since skepticism towards China was almost certainly higher just a decade ago.
What this report does seem to show is that regardless of any progress in recent years, a significant amount of skepticism remains in the US about China’s global aspirations. That skepticism has allowed US politicians to engage in China bashing with little fear of negative backlash, creating a win-win proposition. The skepticism has also helped to support the Obama administration with its recent decisions to ban the import of Chinese telecoms equipment and place punitive anti-dumping tariffs on imported Chinese solar cells.
My own view is that the lingering American skepticism is largely the result of poor public relations by Beijing despite more positive efforts by individual Chinese companies. Beijing seldom takes proactive steps to promote a more positive image of its global intentions, preferring instead to usually react with anger and caution to anything that happens outside its borders. This survey and others like it should signal to China’s business leaders that they need to lobby Beijing to engage in more forward-looking, positive PR. Such efforts could eventually convince more Americans and westerners in general that Chinese companies are most interested in doing business and aren’t simply arms of Beijing with hidden political agendas.
Bottom line: A new survey shows China needs to boost its PR efforts to convince Americans that its companies aren’t arms of Beijing with political agendas.
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