PR strategy better than costly 'cure?
By Xiao Dai (China Daily)
Updated: 2004-04-20 10:02

Prevention often makes more economic sense than having to resort to a costly cure.

And this rule certainly holds true for Chinese companies suffering from rising trade conflicts.

China comes up at least weekly and sometimes two or three times a week during the United States International Trade Commission anti-dumping hearings.

And one out of every seven anti-dumping cases since the 1990s has involved Chinese products.

World Trade Organization (WTO) records show that Chinese exports have been the subject of 308 anti-dumping charges mainly from the United States and the European Union since the organization was founded in 1995. And this is not confined to one sector, with everything from textiles, steel, televisions and bicycles to power-saving lights, toys and lighters having charges leveled against them.

China has already become the No 1 victim of anti-dumping charges and investigations undertaken by more than 30 economies, with estimated losses coming to the tune of US$80 billion.

But Chinese manufacturers are much better prepared when faced with this threat today, spending masses of money to hire lawyers rather than having high anti-dumping duties slapped on them.

But more could still be done even before these cases arise.

Zheng Yannong, executive vice-president of the China International Public Relations Association, said that building up a good public relations profile before a trade case is more economical than turning it into a lawsuit.

But he added that, since the causes of international conflicts differ, a variety of measures should be taken to solve them.

Lawsuits and negotiations involving government representatives are the most common methods.

But lawsuits are very costly and do little for the company's reputation, Zheng said.

"Public relations builds a positive enterprise image through brand-building and communication helping to influence public opinion," he added.

Jeff Smith, managing director of Hill & Knowlton (China), a major international PR company, said public relations is a vital weapon in trade conflicts, as the decision to impose trade restrictions is often more political than economic.

"There are a myriad of stakeholders who all influence government decisions in this regard, not just the rules," Smith said.

Trade actions do not materialize overnight, he said. Many obvious signs are available to predict when a simple disagreement can transform itself into trade action.

"Recognizing and dealing with these signs early can mean the difference between success and failure in any trade conflict," Smith said.

"Governments do not make trade decisions in a vacuum. Identifying potential stakeholder groups is the first step in neutralizing enemies and motivating friends to take action on your behalf," he said.

After finding the target audience, companies involved in a trade conflict should find the right message to deliver, Smith added.

"Messages on trade issues are often emotional rather than rational. It is essential that your messages are designed to motivate target audiences to take the action desired."

All messages must be consistent but adapted to suit the desired audience, Smith said, and they must be formulated in a way as to blend in with the target audiences' agenda if they are to be successful.

Choosing the correct channel of communication is also a decisive factor, Smith said.

"There are many ways to deliver messages and finding the most effective channel that allows the message to be received and understood is essential for effective communications," he said.

Li Hong, managing director of Fleishman-Hillard International Communications (China), another major international PR company, said people often misunderstand the fact that what is referred to as "government relations" by PR companies as relations between the governments, which they are in fact relations between enterprises and governments.

In developed countries, especially in their capitals, there are many government relations lobbyists, Li said.

These people often boast a strong background and skills and are usually lawyers, industry veterans and former government officials, Li said.

"It is important for Chinese industries to communicate with them and make them speak for you," Li said.

The local industrial organizations may step further by establishing their fixed lobbying groups in foreign policy-making centres, Li said.

Manufacturing associations, importers associations and trade unions should be encouraged to conduct an active dialogue and deepen mutual understanding, Li said.

The Chinese manufacturing industries, including the textile sector, should regularly link up with the US Government, industries, media and interest groups.

"So when a problem arises, it will be able to know these people's positions and viewpoints quickly," Li said.

Chinese companies also should spend more in foreign countries to give full exposure to their brands, so as to make the US consumers become increasingly reliant on Chinese products, he said.

When US consumers think that buying cheaper Chinese products will cost them their jobs, they would rather buy more expensive items from other countries.

At the same time, it is also easy for the US Government to take such measures as increasing tariffs or limiting imports of Chinese products, Li said.

Close