Common ground

Many Chinese companies, expanding into overseas markets, frequently fret about cultural and social barriers but treat the language gap as trivial.   

However, top executives who have relied on translators to help build their businesses into global forces, are now finding that might not be enough. English proficiency at the top is now a deciding factor in whether a Chinese company can be a truly global organization.

Just ask Huawei Technologies vice-president Guo Ping who had to correct his translator when answering questions from both overseas and Chinese journalists.

At a telecom trade show in Hong Kong in December 2006 the translator was apparently unable to exactly translate Guo's answers from Chinese to English due to scant knowledge off the telecom industry and vocabulary. That pushed Guo to start speaking English for himself.

Many overseas-educated young entrepreneurs - particularly those who founded China's Internet start-ups - can speak almost fluent English. But others born in the 1960s or before, and without overseas educations, have been stumbling with their English.

In fact, Guo, who was born in 1966, is one of the youngest in Huawei's boardroom. Company founder Ren Zhengfei, who was born in 1944, began learning English in 2002 and says English could eventually become the official language of Huawei's boardroom.

In a New Year message to employees, Ren announced Huawei has decided to adopt English as the working language as well as the language for the internal communications platform.

Huawei last year reported $16 billion in contract sales, with 72 percent from outside China. It now employs about 70,000 people with 15,000 working overseas, over half of whom are locals.

English proficiency has been a must for university graduates seeking jobs in Huawei. But now "we are requiring any employee, even the very senior, to take English language tests such as IELTS or TOEIC, as long as there is any link between his responsibility and our overseas businesses", a Huawei spokesperson says. "And everyone has to pass the test within two years."

That means even the 64-year-old Ren might also have to sit for an English language test in order to manage an organization to better compete with larger rivals such as Sweden's Ericsson in which English dominates.

Speaking English

Huawei is no exception. On the wall of a meeting room of Beijing Huaqi Information Digital Technology posts a notice, which reads "You will be fined 50 yuan if you don't speak English".

"We have imposed several fines," says company president Feng Jun.

Huaqi, which makes consumer electronics products including MP3 music players and digital cameras, now generates nearly 20 percent of its sales from overseas. With increasing expansion outside China, Feng found the management team had to reduce reliance on translators to better communicate with foreign clients, partners and even media.

Feng now gives speeches and presentations in English when addressing overseas audience. But just one year ago, like many Chinese, he could barely speak English although he graduated from Tsinghua University, one of China's finest.

Huaqi has been pushing for a sporting marketing blitz by sponsoring Formula One and linking its brand with Olympic-related activities.

Feng says his improved English skills have enabled him to have chances to talk directly with senior Olympic officials including Juan Antonio Samaranch and Jacques Rogge.

The increasing English push at the top of Chinese companies underlines the true globalization of Chinese companies, says Wang Huiyao, vice-chairman of the Western Returned Scholars Association.

Wang's association is a club for the returnees, sometimes called "sea turtles", most of whom are executives of Internet start-ups such as Charles Zhang, founder of NASDAQ-listed Sohu.com.

A good command of English has played a major role in the boom of Internet start-ups in China as that has provided executives better access to the overseas venture capitalists and stock markets.

But for many home-grown entrepreneurs, it's only now that they realize "English is the global language of business", says Wang. "They are realizing proficiency in English, the global language of English, is a must not only for managers dealing with overseas businesses. That is also a must for those at the top. Now they are treating it as a compulsory course and are making up the missed lessons."

The lackluster example of Chinese home appliance giant TCL is a case in point. TCL acquired the television and mobile phone businesses of France's Thomson and Alcatel in 2004. So far TCL's ailing European operations have yet to see a major turnaround, making the company a failure case for globalization in the textbooks of many business schools.

There are many explanations for its setback such as underestimating potential risks as well as the cultural conflicts.

But insiders say the language barrier, created by a lack of English-speaking executives at the top, also played a part.

Unlike TCL, "Lenovo's decision to relocate its headquarters from Beijing to New York after its acquisition of IBM's PC-making business is pushing the management team to speak English as the common language to increase efficiency in communications and decision-making," says Wang.

Many non-Chinese sit in Lenovo's boardroom, including CEO Bill Amelio, who formerly ran Dell's Asia-Pacific operations.

Amelio, according to an Economist story a year ago, "can barely manage a word of Mandarin". But that has not been a barrier as Lenovo Chairman Yang Yuanqing - once barely conversant in English - can now "crack jokes in his adopted tongue".

"What impressed me most is that Yang is interviewed by foreign media in English such as CNBC (without a translator's help)," Wang says.

Yet, speaking English was a major challenge for Yang before the deal with IBM. A Business Week report says Yang then "hired a tutor, watched CNN obsessively, and went from halting to conversant within a year".

"In many cases, relying on translators, executives would have no difficulty in communications with English speakers," says Wang. "But in the business world you need to make friends which could eventually benefit your business. You could hardly do that if you want to have a heart-to-heart talk with someone who speaks a different language. It's even harder if you want to understand something subtle.

"In many ways, an English-speaking executive at the top could be an image ambassador for a Chinese company which wants to get the global spotlight," says Wang.

China Mobile chairman Wang Jianzhou, who was born in 1948 and learned English himself, now can speak it without hesitation. In recent years he started to actively speak to foreign media and at international forums. That has not only promoted China Mobile brand but also helped Wang make a lot of friends including Goldman Sachs CEO LIoyd Blankfein, British Telecom CEO Ben Verwaayen, former Motorola CEO Ed Zander, Deloitte chairman William Parrett as well as Dell chairman Michael Dell. These companies are already or could become China Mobile's partners.

In the past, "a lack of English skills have led to an absence of many Chinese home-grown entrepreneurs (except those working in the Internet sector and financial institutions) in international forums and occasions, which in fact has thwarted their overseas expansion drive," says Wang Huiyao. "Now it's set to change."

(China Daily 03/10/2008 page7)