Kimberly Global, a China-Australia business consultancy, has urged Australia’s mining and exploration companies to acknowledge how culture shapes China’s way of doing business, in order to be more certain about attracting Sino project partners and to move clear from recent strained business relations between the two countries. It cautions that the biggest business risk facing these Australian companies looking for Chinese joint venture partners, is that they shy away from business with Sino entities due to perceived doubts about the the country’s culture, history, political, regulatory and economic environments affecting how they conduct their business affairs.
Kimberley Global said the Sino commodities powerhouse remained Australia’s largest trading partner – with both sides keen that there is no impediment to normal business relations.
“The domestic resources sector, particularly the juniors, needs to take some heart from the fact both countries have gone to pains in recent weeks to stress the importance they see in the relationship not only on a bilateral basis, but for a strategic longer term,” Dr Xian Tao from the consultancy said.
“Ignorance, however, should not be used an excuse for failure to secure a Sino joint venture deal. There has been a litany of resources players which have failed to secure a Chinese partner due primarily to a clear lack of understanding of the country and culture into which they ventured.
“Some of these situations reached crisis level – a point damaging to mutual long-term business interests and strategies for both Australia and China. Chinese do conduct business in a different way but not at the expense of the desire for a mutually beneficial outcome – a factor that has been overlooked of late.
“From our experience, the key to understanding the Chinese business climate and to successfully negotiate and secure a Sino-backed joint venture, is to make a better effort to appreciate the history, culture, attitude and philosophy behind those ways of why and how Chinese businesspeople assess and then conclude a partnership deal.”
Dr Tao said Australian miners and explorers also need to appreciate that despite its 5,000 years of history, China is in real terms, a developing and young country with a barely 60-year old modern political, economic and legal system.
“The Chinese Government is helping drive continuous improvements and reforms in bilateral trade and significant changes are evident,” Dr Tao said.
“This is creating opportunities, not barriers, to Australia’s resources participants and I can only encourage those within local exploration and mining ranks who hold possibly outdated views and attitudes towards China, to upgrade their awareness.”
Dr Tao said modern Chinese business people were not dissimilar to their Australian equivalents and shared the same family and professional values. “Any differences can be managed but require an open mind, good communication, allowing sufficient time for each party to undertake their own due diligence and learning Chinese culture so that trust and closer working relationships result.”
She said joint venture partnerships were not a one way road and there remained an obligation on Chinese players in resources to reciprocate and learn to do business in Australia in an environment that better appreciated the Australian way of concluding transactions.
Australian-based Kimberley Global is primarily focused on Australia-China mining business and specialises in linking mining entities in like-minded commodity areas as well as interpretative, translation, business strategies and skills recruitment services.