Exclusive Interview on Sino-German Business Relationship with Simon Frank
Perception of each other's culture
What is the public perception of the Chinese Belt and Road Initiative in Germany in your personal view?
The concept of the Chinese Belt and Road Initiative is promising. Nevertheless, this initiative is the creation of globalisation. In fact, the EU has not signed any infrastructure deals with China as a result of this Initiative. Despite the fact that I advocate the Belt and Road Initiative, I am still uncertain with regards to the EU participation in implementing and funding of these belt and Road Projects. I have noticed that German entrepreneurs still hold scepticism towards this initiative, as it is mostly biased to the Chinese, in my perspective, this initiative has not created a win-win outcome that would attract Germans or other foreign firms.
Chinese entrepreneurs should thus be ready to co-operate with German businesses on prospective Belt and Road projects to win over Germans’ trust in this initiative, instead of dominating them. As Germans, we should not seek the ways to compete against these Chinese businesses; instead, we should learn to cooperate with them; I am not only speaking about economic partnership but also partnership that concerns social, cultural and environmental prospects.
It is usually difficult for the European entrepreneurs to figure out who is in charge of what and how decisions will be made in the Chinese business administration, especially, in comparison to the transparent European way that the European administrations have.
What do you think are the typical business practices and traditions German entrepreneurs can learn from their Chinese counterparts?
First of all, I would like to point out that the typical business practices and traditions should not be sought from the metropolitan cities such as Beijing, Shanghai and Shenzhen; that is to say, London is not representative of how British businesses operate in the whole of the United Kingdom. Therefore, I would advise German entrepreneurs to travel around China and figure out the subtle varieties in business practices and traditions in different parts of China. Second, I have learnt that Chinese employers appear to be more caring for their employees than Germans do. I have noticed that some Chinese employers would occasionally bring their chauffeurs to dine with them on their business trips, and even invite their employees including their families back to their houses for social gatherings. I have found that dining out is a big part of the Chinese business social occasion; many issues can be negotiated and resolved over the dining table. Finally, the Chinese boss has a much more authoritarian leadership style than the German counterpart. There is a top-down decision-making process instead of being discussed and addressed among the relevant team members.
What do you think are the typical business practices and traditions Chinese entrepreneurs can learn from their German counterparts?
I once had a Chinese business partner looking for a German toothpaste supplier. He was eager to reach a substantial business deal out of the first few meetings with the German Supplier. Although the German supplier was not yet ready to amend the business terms, he expected the German side to be more flexible with his demands and offer him more discounts than agreed on the contract. Consequently, both parties did not get what they want. In this scenario, we have noticed that German entrepreneurs are more determined to comply with initial conditions of the deals and are more patient before making any contract amendments. Hence, I suggest that Chinese entrepreneurs should set attainable goals at each stage of the bilateral business negotiation and avoid rushing to an unachievable plan that would break the whole deal.
Do you think there has been a lack of intermediary institutions that assist Chinese-German trade negotiations and exchanges?
Most of the institutions that facilitate Chinese-German bilateral trade negotiations and other exchange programmes have not been effective based on my own experience. Many Chinese-German intermediary institutions are sadly driven by economic gains at the moment. In my opinion, we should also broaden the scope of these institutions’ purpose; these institutions should also cover exchanges in Eco-friendly construction, culture and education, and they should also help address societal issues such as the civil rights. Furthermore, these intermediary institutions should mainly come from the private sector, as most state-led intermediary institutions are less economically efficient than the private intermediary institutions. However, we should not ignore that Chinese state-led intermediary institutions tend to have more economic power and wider business networks than that of the private intermediary institutions. Speaking of Chinese-German educational exchange, I think we should establish the Erasmus programme that allows more German students to study in China and vice versa. I think it is time we had better recognition of the educational differences in both countries. On the one hand, the German primary schools can learn from the teaching syllabus in Mathematics and Sciences. On the other hand, the Chinese primary schools should learn from the German teaching methods that prioritise self-learning, team-building and innovation.
What political agreements do you hope both China and Germany can reach collectively in the future?
View of yourself
It is puzzling for me to figure out what is the socialism with Chinese characteristics because if I were to define German polity broadly, I would look at the separation of power in our political system and the representative democracy. Nevertheless, we should not judge which unique political system is better. Instead, we should focus on the international agreements that both countries can agree on in the future. It would be significant progress that if both countries found more common positions on a global stage and collectively uphold the international initiatives such as the Paris climate agreement. However, I suggest that Chinese should begin to actively address the problem in the excessive use of pesticide and nitrogen fertilisers in China, and the air pollution generated by the coal mining sites in the northeast of China. Nonetheless, I have recently read that China has banned the waste imports from Europe in 2017; it is undoubtedly good news, and it is time we should implement more recycling strategies in Europe to accommodate it.
Please tell me one problem that has discouraged more German or foreign businesses from settling in China based on your experience? What is the role that Frank Enterprise GmbH plays in adapting to this issue in China?
Handling the problem
The first problem that Chinese should start resolving is the online social and information barriers in China. I find it frustrating that this barrier blocks me from communicating with my German business partners on Facebook and opening specific web pages on Baidu. In my opinion, Chinese should offer more convenient social and online platforms that allow us to connect with our home countries. I understand that we cannot root out the communication barrier in the short term, but I think it is vital that both Chinese and German should come together and discuss these issues openly, even if it means we have got many more questions to negotiate. My company [Frank Enterprise GmbH] will be the "bridge-builder" to resolve these issues. Having a Chinese family from my wife's side as well as my local business partners allows me to accommodate the interests and differences of both parties. Our mission is to provide both German and Chinese businesses with tailored advice to business integration in the German or Chinese markets. However, I acknowledge that it is a challenging task to help German enterprises integrate in China and vice versa, but we are patient enough and determined enough to address differences and overcome barriers incurred from China-German trade negotiations and bilateral exchange programmes.
What advice will Frank Enterprise GmbH give to the foreign businesses seeking to deal with their Chinese counterparts?
My first advice is to change our conventional business attitude towards Chinese businesses; we should learn to humble ourselves so that Chinese would more likely open up to you. My second advice is showing the willingness to get to know more about our Chinese business partners. Chinese businesses would favour foreign companies who have already developed a good personal relationship with them, and truly understand what they need. To achieve this positive relationship, we should communicate with our Chinese counterparts on a regular basis, and even remember to pass on our greetings to them on festive occasions such as the Chinese New Year.
Simon Frank is the Chief Executive Officer and Founder of Frank Enterprise GmbH
Richard Wang is the interviewer and he is the third-year Economics and Politics undergraduate at the University of York.
The sources of the images
Credits to Young Liu
Ost trifft West. Available at :https://nastyhobbit.org/forum/pics/germany-vs-china/