News Corp Fills in Missing Gaps
BEIJING --- The opening of the News Corporation representative office in Beijing in March was self-described as a "milestone in its business development in China", but is causing a lot of confusion among CMM readers who thought representative offices were meant to be opened before you start doing business in China.
As explained in press releases of the opening ceremony, News Corp is already active in the China market with Star TV and Phoenix Satellite TV networks, Golden Mainland Production Co., Ltd and PDN Xinren Information Technology Co., Ltd, a joint venture with the People's Daily.
The reasons News Corp has opened a rep office have much to do with protocol and little to do with direct business. Indeed , rep offices are only liaison bureaux with no rights to conduct business on the mainland. They were created as the forward staging posts for foreign companies trying to enter the China market in the early stages of its economic opening.
The benefits of opening a liaison office when your regional HQ is in Chinese Hongkong and you have already established operating joint-ventures are not obvious, but they are crucial to News Corp.'s continuing "liaison" with the Chinese government on subjects still considered beyond the commercial reach of foreign companies.
As Star TV President Gareth Chang is quoted as saying at the opening, "the development in the media industry in China, including the rapid technological change, make us optimistic about the potential for our business here." What he means is that News Corp is optimistic about the potential for their business in sectors in which they are not yet allowed to participate. If they were allowed, they would open a joint-venture!
Chang went on to say that News Corp is establishing good working relations with government agencies and industry partners at all levels (I wonder how they managed that before the rep office?) and that now is the time to put resources into place to focus on new opportunities with vigor.
From then on, the press release seemed to evolve into the type of rhetoric more often heard coming from the Chinese propaganda chiefs whom News Corp will now be able to legally invite to dinner in Beijing.
Announcing that News Corp plans to co-operate with its Chinese partners to make more films and TV programs in Chinese (the alternative: teaching the Chinese to speak English), Chang went on to re-confirm News Corp.'s commitment to "introducing China to the world through a more objective perspective".
"Currently, people in the west get to know China mainly through programs made by foreigners, whose observation don't always comply with the truth," said Chang. "What we are going to do is to enhance the voice of the Chinese people in the world," he concluded.
With China's own efforts at enhancing their voice in the world suffering a major satellite setback recently, that is a comment rich with irony coming from this new boss of a foreign representative office.