Great leaps in soft power

Updated: 2015-02-06 07:40

By Cecily Liu(China Daily Europe)

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The spread of Chinese culture is opening paths as companies go global and creating an eagerness to learn more about the country

Chinese companies are increasingly establishing their footprint overseas as they become globally competitive firms, a development closely aligned with an increasing willingness to share in and accept Chinese culture abroad, experts say.

This trend is being explored in detail at the LSE SU China Development Forum in London on Feb 6-7, organized by the China Development Society of the London School of Economics and Political Science's student union.

Great leaps in soft power

Great leaps in soft power

The LSE SU China Development forum in London explores the trend of Chinese companies expanding operations in the United Kingdom. Photos provided to China Daily

Topics at the forum range from China's domestic issues, like political direction, urbanization, international relations and economic growth, to internationally focused issues including China's soft power and Chinese companies' global expansion.

These issues are not just academic. In the United Kingdom, China's investments and acquisitions in Britain last year were worth more than $3 billion (2.61 billion euros), with big deals involving well-known brands, infrastructure, media, research and property development.

From 2009 to 2013, bilateral trade between China and the UK grew from $39.1 billion to $69.9 billion, a 78.7 percent increase. Over the same period, China-EU trade grew by 37.2 percent.

Zhou Xiaoming, former minister counselor with the economic and commercial office at the Chinese embassy in London, says many Chinese firms that choose to expand in the UK through acquisitions have contributed greatly to the UK economy both by generating growth and creating employment opportunities.

"China has a great market and is looking to upgrade its technology. By acquiring overseas companies with great technologies, they can then invest more capital into these technology firms, help them grow and help them boost sales in China," Zhou says.

One example is the purchase by the Chinese company Zhuzhou CSR Times Electric of a majority share of British company Dynex Semiconductor Ltd, of Lincolnshire, which specializes in a type of semiconductor technology, Zhou says.

In 2008, Zhuzhou CSR Times Electric bought a 75 percent share in Dynex and retained Dynex's management board. With financial support from Zhuzhou CSR Times Electric, Dynex built a 12 million pound ($18 million; 15.9 million euro) research and development center to focus on developing its semiconductor technology.

Another good example of Chinese acquisition creating a win-win situation is Chongqing Machinery and Electric Co's 2010 acquisition of Precision Technologies Group, a manufacturing company headquartered in Manchester, for 20 million pounds.

Neil Jones, group business development director at Precision Technologies Group, says since the acquisition, his team has helped their parent company with their manufacturing processes.

"From a technical perspective, we have a lot of production efficiency expertise to share," Jones says. "Meanwhile our parent company helps to give us increased understanding of the Chinese economy, Chinese market and ways of doing business in China, so as to help our expansion in that market."

Chinese investment abroad is also now increasingly focused on the infrastructure sector, using its expertise and technology accumulated in the domestic market to take on complex infrastructure products overseas.

Two Chinese nuclear power companies have recently reached an agreement to invest in two planned reactors in the UK at Hinkley Point C in Somerset. Led by France's EDF Group, the pair of reactors will cost 14 billion pounds. China General Nuclear Power Group and China National Nuclear Corp are expected to have a combined 30 to 40 percent stake in the consortium, with France's Areva taking another 10 percent.

Another high profile project is the HS2, the UK's high-speed rail network plan that has attracted Chinese interest, although the bidding process for the project has yet to begin. The first phase of construction should last from 2017 to 2026. The first train services will run between London and Birmingham starting in 2026.

"China has great technical expertise in the nuclear and high-speed rail sectors, because we are constantly building such infrastructure in our home market. Doing such projects in the UK market is helpful for our companies to establish a global footprint in the longer term," Zhou says.

Jeff Cao, head of Asia Pacific at London & Partners, a government agency, says Chinese investment in London is becoming increasingly diversified.

"Tech companies, for example, are now coming to London to access talent and reach new markets. Chinese firms are also now increasingly using London as a global pivot to access Western brands and technologies, while the development of London as a hub for renminbi trading has also been helpful," Cao says.

Accompanying China's great outbound trade and investment growth is the spread of Chinese culture abroad, which is a part of China's soft power strategy to help facilitate cross-border understanding between China and the rest of the world.

One example of Chinese soft power abroad is the creation of Confucius Institutes, which are nonprofit Chinese language and cultural organizations affiliated with China's Ministry of Education that usually operate at overseas colleges and universities.

Started in 2004, Confucius Institutes are now a global phenomenon. In the UK alone, there are now 25 Confucius Institutes and more than 100 Confucius Classrooms, which are language-teaching organizations affiliated with secondary schools.

Luo Lisheng, former vice-dean of the School of Humanities and Social Sciences at Tsinghua University in Beijing, says Chinese culture and soft power is an effective factor in China's globalization process.

"Soft power is a useful tool for the Western audience to understand Chinese culture and history, and this increases mutual understanding," says Luo, who is also the China director of the Confucius Institute for Business London, located at the London School of Economics and Political Science.

CIBL, which focuses on teaching Chinese language and culture at businesses and to individuals in the business community, has developed a series of Chinese courses from levels one to six, which are welcomed by UK language learners, especially those in London.

"Increasingly, Western businesses are aware they can do more business with China, so we teach some useful phrases that they can use in their business dealings, such as 'Hello', 'I like Chinese tea', 'thank you', or 'goodbye'. Although these are just simple phrases, they enhance their friendship with their Chinese partners.

"Confucius Institutes play a positive role in spreading Chinese soft power abroad. Firstly, they provide a language-teaching platform; secondly, they act as a bridge between Chinese and Western cultures; thirdly, they act as a window for the West to see China; and lastly, they are a channel for the West to understand Chinese culture and language," Luo says.

Michael Barr, a senior lecturer at Newcastle University, says China can learn from the UK's confidence when making use of soft power. Rather than trying to improve China's image internationally, it should find a distinct identity for itself and share this image with the international community, he says.

"China needs to trust in its people and emerging civil society to take the lead in developing the soft power strategies that will define the country, its values and its wider contribution," Barr says.

Luo adds that Chinese culture is very extensive, comprising many different elements including literature, architecture and the fine arts. These elements then reflect the Chinese way of thinking.

"Confucius Institutes can contribute more in the area of increasing language teaching in the West and running cultural events to help Westerners gain a better understanding of Chinese language and culture," Luo says.

Cao says Chinese culture is increasingly accepted and understood in the UK. "For example, in London, you just need to look at the celebrations that surround Chinese New Year and witness how they have grown over the years and how people from all walks of life go to celebrate the event."

This increasing understanding of Chinese culture in the West helps with business deals, Cao says. "People are not only more and more comfortable doing business with Chinese people, but many also take steps to make visitors feel accepted, too," he says.

cecily.liu@chinadaily.com.cn

( China Daily European Weekly 02/06/2015 page22)