Fellow Communicators: I Am Not Your Tool

In the Hutong

Wishing it Would Rain Again

1711 hrs.

Hey PR, bloggers are not tools to be used

As someone who spends his working days helping companies get better at communications, I empathize with thos legions of folks who have to work with bloggers and the media to help their clients hawk themselves or their products.

At the same time, as a blogger I get really annoyed by the ham-handed efforts many PR people use to deal with me. There is simply no excuse for dealing with journalists or bloggers via form letter or impersonal email blast.

Please, PR folks, before contacting me, read my blog. And please read the article linked above.

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Some Overdue Balance on China and FDI

In the Hutong

Dreaming of a Six-Month Weekend

1556 hrs.

U.S.-China Media Brief

There has been of late no shortage of hand-wringing abuout the changing business climate in China, and some of that angst has targeted the matter of how and where the authorities are allowing foreign companies to invest.

The investment climate is changing, as we should expect as China’s economy and it’s relative position in the world evolves. It also means, as some commentators are apt to forget, that America’s door to Chinese FDI is not as open as  we would like to think.

Steve Dickinson sums up the situation with dispassionate equanimity: 

While potential investors may claim that China’s inward FDI policies are unfair, Steve Dickinson, an international lawyer working in China, argues that these are simply China’s laws and policies, which it has always been very clear on. It is just that these laws do not “fit with [the complainers’] idea of how China should be.”

He’s right, like it or not.

If that is not good enough, then the issue of FDI needs to be raised to the level of a global organization that can do for transnational investment what the WTO and its predecessor organizations did for trade.

But then be prepared to accept a few uncomfortable investments in your own country. 

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SNS Marketing in Asia: It’s Not Just About Kids Anymore

In the Hutong


1518 hrs.

Social networking is expanding its reach into the 35+ market and beyond

Interesting article from Media Magazine in Hong Kong, but am I the only one who thinks that traditional marketing terms like “target market” and “audience” ring hollow and contrived when talking about social media?

If we are really going to change our thinking to catch up with (and start anticipating) the changes tearing through the sinews and bones of the media, marketing, and communications industries, we need a new lexicon.

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On China’s Twitter Clones

Peter’s Tex-Mex
1455 hrs.

ReadWriteWeb offers an excellent overview of China’s micro-blogging landscape, wrapping up with this interesting little buried lede:

“However even if Twitter became available again in China, would it take off with mainstream Chinese Internet users? Kaiser Kuo thinks that it wouldn’t, because of the popularity of currently operational services like Weibo and Taotao. He remarked that although there would be an uptake in the number of users on Twitter, if it was ever to be made available again, Weibo and others will have gained too much momentum by then.”

All of which seems to suggest that NetNanny is an excelent competitive advantage for Chinese web services.

But I think Kaiser would agree with me when I say that Baidu did as well as it did even with Google in the race, that most of the foreign services that came to China and failed did so without blockage being an issue, and that experience has proven that with a very few exceptions, the locals have done a better job creating relevant and nimble offerings than the foreigners have.

More to the point, Twitter and Facebook have a healthy number of Mainland users, blocks notwithstanding. What those services need to figure out is this: why, despite the lesser relevance, the local alternatives, and the technical hurdles involved in using these sites do some Chinese users still use them?

Answer that, and you have found a market. Maybe it is just a niche, but maybe that niche holds the key to a modest but real China opportunity.

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The Google Shuffle and the Hong Kong Twist

Airport Expressway, Inbound
Suffering from Pitch Fever
1241 hrs.

As we all take in the latest wrinkle in the Google vs. China story, a few thoughts. (Full disclosure: I own something like 5 shares of Google, Inc.)

Let Them Have It Both Ways

First, Google’s decision to redirect traffic to Hong Kong carries the faint scent of a company trying to have it both ways. On the one hand, Google would like to take the moral high ground with audiences worldwide, saying that it is no longer under the meaty thumb of Chinese government oversight.  On the other, it wants to be able to tell advertisers and shareholders that the company is still doing business “in” China, albeit from a sort of offshore data haven, and if possible maintain its #2 market position against Baidu. (Clearly, Google isn’t excited about leaving the worlds largest Internet market for a potential global competitor to dominate, or about creating a vacuum that would invite new competitors.) If they can pull this off, more power to them.

Success is not a given, however. In order to convince shareholders, they have to convince advertisers, and in order to convince advertisers, they need to maintain and build their user base. This means that the Hong Kong servers need to be as fast and easy to access as the Google.cn servers were. It also means that the government needs to resist the temptation to block access to the Hong Kong search engine from China. 

Saving Face for Everyone

It is tempting to stop here and simply say “any bets on that one?” But this brings us to my second point. There will be some among China’s policymakers who will be tempted to block the Hong Kong Google service completely. There are better choices that would allow Chinese users and businesses to enjoy Google’s search and SEO capabilities while serving the purposes of the government. 

This is an excellent opportunity to demonstrate strength by exercising restraint. I don’t think unrestricted access to an offshore Chinese language search engine is in the cards. But it would be a simple matter for the central government to treat Google.com.hk the same way they treat Google’s English services. Allow the site to remain accessible, but block searches that use terms the government finds objectionable. A nanny-moderated Chinese Google experience is better than none at all, and it gives China an opportunity to take a little high ground of its own. It would also serve to boost Google’s effort to expand its Hong Kong operations, something Hong Kong would surely like to see, and potentially help position Google as China’s Internet Entrepot. The SAR could sure use a boost, and seeing the central government take a stance that will benefit Hong Kong might help improve sentiment about Beijing on Jardine’s Rock.

It is not a perfect solution, but it is one that would allow both Google and the government – and Hong Kong – to come out of this better off. 

Unanswered Questions

Third, Sergei Brin’s high visibility on this issue raises more questions than it answers. As a child of the Soviet Union, Mr. Brin’s outspokenness on the China matter creates an unspoken (and not entirely accurate) parallel between China and the USSR that seems to bolster Google’s moral position. But it also keeps in the pubic eye a disturbing question: where was Mr. Brin in 2006 when Google made the original decision to operate a local China search engine under the terms spelled out by Chinese regulators? After all, the Hong Kong option was as open to Google in 2006 as it is today. Why did Google come ashore in the first place?

Did Mr. Brin or others strenuously object to the compromise and were overridden? If that is the case, what provoked the sudden change of heart? (And please, do not bring up the gmail hacks issue: that is an issue unrelated to the continued operation of the search engine.) Or was the company naive enough to believe that the reality of operating in China was at odds with its professed beliefs? 

These are not academic questions, nor are they relevant only to Google’s China business: they speak directly to the matter of the company’s corporate governance, and, of wider interest, to the way in which the company balances its moral stance with the temptation of business opportunities. As Google grows more influential and ubiquitous, it needs to make these matters clear to the public and, if necessary, rectify inconsistencies. Those of us who enjoy Google, its services, its software, and its share price want to know whether Google will truly be different as it grows, or whether it will simply become Microsoft-in-the-Cloud.

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Brand Splitting: Don’t Try This At Work

In the Hutong
33 Hours Straight
1501 hrs.

Professor Anil Gupta of INSEAD and Haiyan Wang of The China India Institute get it mostly right when they tell us “How to Avoid Getting Burned in India and China” in BusinessWeek.

The solution they propose: do not tie your fortunes in these mega-markets to a single partner. Spread your business in these two mega countries around two or more partners, gaining in flexibility what you lose in efficiency. You only need to get booted out of a partnership once before you realize that these markets are too important to trust to a single partner. (I’ve used this with clients in the past, and it really does work.)

Where this strategy gets companies into trouble is when it damages the customer experience. They cite Toyota as an excellent example of a company that has gone and built separate partnerships for each part of their vehicle line, which is true.

What they miss is how screwy this makes it to go buy a Toyota in China. Toyota has three separate distributor and dealer chains, but the dealers are all branded the same. Imagine my chagrin when I pulled into my nearest Toyota dealer to talk about a Highlander, to find that all he had were Coaster minibuses. Or when I finally got to the dealer that sold the Highlander and wanted to compare it with a Landcruiser, only to be told that the Landcruiser line was sold by another set of dealers.

What is worse, the poor folks at Toyota have to manage three separate dealer and distributor chains, a problem that caught up with them last year when the company began fielding calls about arrogance, rudeness, and poor service at their dealerships.

The real right answer is to split partnerships around manufacturing, but own the customer experience. Toyota (and Volkswagen) need to wrest control of the dealerships back away from the local partners so they can control that experience at the front end, where their brand means the most.

Forging a partnership with one parter’s sales and marketing department is hard enough. Doing it with three is a terror, and trying to forge all three into a coordinated (I wouldn’t say “unified) whole is asking the impossible, especially when different partners have products that compete for the same markets.

You can split operations, but you should never try to split your brand.

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Debunking Counterfeit Myths: It Ain’t About China

In the Hutong
Figuring out WordPress
1348 hrs.

A thoughtful piece in BusinessWeek, “Debunking Common Myths About Counterfeits” suggests that our peceptions about counterfeits and China may be a little skewed:

Another myth worth busting is the notion that China is responsible for all of the world’s counterfeit problems. Counterfeiting is truly a global problem. According to Research And Markets, China is the top source of counterfeit electronic components; approximately 10% to 40% of electronics goods in China today are believed to be fake. Yet the estimated figure across the Middle East is 20% to 40% and across Eastern Europe, 10% to 40%. Other Asian countries—including Korea, Vietnam, and India—and some South American countries significantly contribute to the overall intellectual-property-infringement problem.

As most of us learned by the time we were seven, the worst possible defense for any offense is “yeah, but they’re doing it, too.” But that is not the intention of the author of the piece. The point is simply that the matter of counterfeits does not begin or end with China, and that a focus on China as the intellectual property rights-violation poster-child can lead to policies that don’t solve the problem.

The counterfeit problem is a trans-national, cross-jurisdictional matter that is confounding law enforcement authorities worldwide because the networks that drive such trade operate beyond traditional jurisdictional boundaries. The persistent belief among both brand owners, many of their attorneys, and the general public is that IPR violations in China would go away if the cops would just do their job. There is some truth in that, but at best it is an oversimplification. Counterfeiting is a global problem, and China is merely a convenient nexus.

An excellent overview of how large the problem of counterfeit goods (and all illicit trade) comes from Moises Naim, longtime editor-in-chief of Foreign Policy magazine, in his readable Illicit: How Smugglers, Traffickers, and Copycats are Hijacking the Global Economy. Naim is nobody’s definition of a “panda hugger.” His editorial in the Decemer 2007 issue of Foreign Policy predicting a dire “Battle of Beijing” during the 2008 Olympics is indicative of his views.

If I expected an anti-Chinese screed when I read Illicit, I was soon disabused. Naim is reasoned, expansive, and decidedly balanced in his coverage of the problem. While not exonerating any government (he notes that often the governments, or select officials, are active participants in these networks), he notes that counterfeiting is a bigger problem today than ever because its practitioners have exploited the openness brought by globalization.

The problem of all illicit trade, he notes, is multinational. The solution must be so as well. The answer is not to chuck globalization or rake the Chinese government and police over the coals when fake Louis Vuitton bags show up in San Francisco, but to globalize the effort against the problem. In fact, by the end of the book, the only question I had left was “how many other China-related issues are we seeing through the veil of a commonly held mythology?”

Our experience with a rising China is teaching us an important lesson: not every China-related business issue need be raised to a bilateral fight with China in the middle. Some demand a new approach that turns the government into a willing ally rather than an enemy. Today, the matter of intellectual property rights is at the head of this list.

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Perspective, Please, on China

In the Hutong
Fixing my Social Network
1125 hrs

A common complaint about reportage on China in the mainstream media is that despite having reporters who are immersed in China and its culture, some of the most prestigious media outlets continue to get the story wrong. Now, it seems, that the guardians of the journalistic craft, the Columbia University Graduate School of Journalism and its prestigious professional periodical, the Columbia Journalism Review, have discovered the problem, and Peterson Fellow Holly Yeager dives into why.

“We’d just note that once a meta-press-narrative gets rolling, it tends to take on a life of its own, for a lot of reasons. Intra-newsroom dynamics play a role. It’s just easier to get a story in the paper that fits the meta-narrative than one that pushes against it. The former are the kinds of stories that, once pitched, make an editor’s head nod up and down like a bobble-head doll.”

Those of us living and working in China have suspected a problem with mainstream coverage of China for years, but have always found it difficult to put our finger on exactly what that was the case. We know the people writing the stories, most of them are as savvy as we are (or more so), and yet still the issue.

Yeager’s post is an excellent start, but I think it needs to go one step further.

Editors are not the final arbiters of an editorial approach to any given story. The vortex is complex, involves the publisher, the advertisers (there really is no perfect “Chinese Wall” in for-profit news organizations – not anymore, anyway), and the perceived attitudes of the readership.

Let’s face it: most of us, most of the time, do not like reading or viewing media that challenges our personal assumptions on any topic. If the case were any different, Al-Jazeera would be America’s leading news source, not CNN or FOX. That does not make us bad, it makes us human. Being uncomfortable, whether physically, mentally, emotionally, or spiritually, is not fun, and most of us prefer comfort.

News media recognize this, and respond accordingly. This does not mean that journalists and editors are required to pander to readers, but it does mean that they can only go so far in challenging our core assumptions before the channel is changed, the paper is tossed, the advertisers lose their target market, and journalists lose their audience.

We should not expect journalists to challenge the preconceived notions of their readership. What those of us with our own “power of the press” need to do is to find another way to begin changing attitudes. Those of us with only our peers and our readers to answer to are actually in a better position to do so. And in the meantime, let’s give our journalist friends a little break.

The Hutong is Moving

Just a quick note to let everyone know that finally, after seven years, Silicon Hutong will be in a place where we can all access the content through a simple “siliconhutong.com” here at WordPress.

In the coming weeks we will be transferring content, and in the meantime will continue to post at our TypePad location.

Let us know what you think!

The Atlantic: Management Secrets of the Grateful Dead

Very interesting treatment of the plans to put the papers of the Grateful Dead at the library of the University of California, Santa Cruz.

I want to believe that the model that the Dead used can form the underpinnings of a new entertainment and media industry, especially here in China. But to me it still sounds like so much snake oil sold by utopian info-libertarians.

I want very badly to be wrong. How cool would it be, after all, if we could discover the future of the media business by plumbing the papers of a legendary rock band

China, the WTO, and Censorship

In the Hutong
Fighting the Hump Day Blues
1616 hrs.

There is a movement afoot to build a case for filing a complaint against China at the World Trade Organization, alleging that China’s efforts to censor the Internet are in violation of the terms of its WTO membership, which Reuters’ Chris Buckley begins to examine here.

As I am not an attorney, I won’t comment on the law involved – I’ll leave it to Dan Harris and Stan Abrams to do that. But the law is not the only issue here. Perhaps more important is whether, even if China were to lose the case, the rest of the world would be willing or able to enforce it.

It is hard to overstate the importance that the Chinese government places on its ability to manage the content to which the broader Chinese public is exposed. The nation’s leaders would undoubtedly see a ruling that strips them of this ability as not only a commercial challenge to the local media industry, but also as a direct attack on their ability to govern the country.

In the face of such a ruling, China would have four potential courses of action:

  • comply, and watch the country flooded with all manner of content, including the salacious and seditious;
  • partially comply, opening up access to more sites but come up with ways to circumvent the ruling;
  • ignore the ruling, continuing to censor but risking sanctions that may provoke a trade war during a difficult economic period; or
  • withdraw from the WTO, replacing it with a series of bi-lateral agreements.

All of these, even the last, are on the table. There are those among China’s leaders who would view the removal of their right of censorship as a major assault on China’s sovereignty. Rather than lose one of their most important means of governance, many would sooner abandon the WTO and return to the old system of bilateral agreements, or, alternately, take the lead in establishing an alternative trading regime.

It is unlikely that the Chinese government would simply stand aside and allow the country to be flooded with everything from separatist advocates to kiddie porn, and the other scenarios would make it difficult or impossible for the ruling to make a significant difference to the commercial prospects of foreign Internet or media companies in China. Surely those planning the complaint must know this.

So the real question must be whether the motives behind this action are, in fact, commercial, or whether the issue of business access is a cover for another agenda. Given the that a commercially satisfactory result in the case is unlikely, and given that the advocates for the complaint that Reuters quotes are free speech organizations, not business groups, this action is in danger of being perceived more as a political assault against the underpinnings of Party rule in China than as a straight commercial dispute, both in Beijing and in Geneva.

If this action is to go forward, and if it is to achieve its stated aims, it must do so with commercial complainants and a very specific commercial objective. To try and accomplish more far-reaching goals with such an action, however well-meaning, risks undermining the legitimacy of the WTO and disrupting the global trading system.

Sailor, Statesman, Scholar, Communicator

In the Hutong
Flying between concalls
1042 hrs.

Take a look at this release about the highest-ranking social networker in the U.S. Armed Forces who actually gets it. (Why is he not at SXSW?) The last paragraph was the hook for me. Strategic connections is where strategic communications really moves into the 21st century. Brilliant.

Insights are stock in trade for Admiral James Stavridis. For the past two decades, Stavridis has been one of the Navy’s most outspoken, erudite, risk-taking, and forward-thinking officers, an expert rifle shot with an MALD and a PhD from Fletcher. Keep an eye on him – he’s wrapping up his naval career with his second major command posting in a row (the first naval officer to serve as Supreme Allied Commander, Europe), but Jim Stavridis is going places.

For fans of the literature on leadership, check out Stavridis’ slim but excellent memoir, Destroyer Captain: Lessons of a First Command.

Beware of Dumb Investors

In the Hutong
Catching up
0916 hrs

Reading a thoughtful article a year after it was originally written might seem folly, but given that I am still running to catch up with my backlog means that I have no choice. And sometimes, that’s a good thing.

Perusing a Martin Wolf (no relation) column in the Financial Times from 8 March 2009 entitled “Seeds of it own destruction” is sobering. As the world’s stock markets were still in their half-year-long nosedive, he noted:

“The proposition that sophisticated modern finance was able to transfer risk to those best able to manage it has failed. The paradigm is, instead, that risk has been transferred to those least able to understand it. As Mr Volcker remarked during a speech last April: ‘Simply stated, the bright new financial system – for all its talented participants, for all its rich rewards – has failed the test of the marketplace.'”

It would be very easy for me to jump on the bandwagon of Main Streeters jumping all over Wall Street and scream for better regulation of the markets. While that may be part of the answer, the other part is an old adage my mom taught me when I first started following her at swap meets in Southern California as a kid:

Caveat emptor. Let the buyer beware.

The more you read through the details of the story of the crash, the more you realize that buyers, driven by greed, willingly bought financial instruments they didn’t understand on the basis the two factors you should never trust when purchasing a financial instrument: past performance and the assurance of salesmen of the security of the asset.

To be sure, there were other factors involved, but it is illustrative that the greatest assurance against having a bubble blow up in your face is a dose of clear-headed thinking.

Which brings us to China.

Chinese enterprises and individuals are being given opportunities to purchase financial instruments about which their only knowledge and understanding comes from the people who are selling said instruments to them. They are buying real estate with the absolute conviction that property prices only go up, they never go down. And they are doing all of this believing that if a crash happened, the government would step in and bail out individual investors.

The buyers are not aware, and this is an implicit danger the government is going to have to address in a broad, systematic manner in a way that doesn’t cause a run for the exits. So the question is, how do you inform a hundred million small investors without completely undermining confidence in the markets? Especially when there is no comparable, successful model that has ever been used elsewhere?

Or, believing that to be an insurmountable challenge, and recognizing the weaknesses underpinning China’s still-developing financial and property industries, do you not even open that can of worms, and instead choose to foot the bill when the air finally leaves the balloon?

This is important. Because if there is a single factor that is more worrisome about China’s economy than its real estate prices, it is the under-informed, over-trusting, investor living in a cloudcuckooland of moral hazard.

Taiwan Discovers Mainland’s Taste for Luxury

In the Hutong, 1247 hrs.

The English language China Post ran an article today entitled “China’s super-rich have craze (sic) for luxuries.”

Ignoring the Chinglish headline (where do they find their editors), the story looked like it was pulled from a college newspaper. Nothing is untrue, but it is shockingly shallow analysis of a meaningful trend by a newspaper that should be able to bring more insight to the matter.

Anyone ever wonder why Taiwan’s newspapers have failed to become “papers of record” in Asia?