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28 November 2012 | PR 12/214

Chinese migrants key to British firms’ success in China, says Loughborough academic

Professor Xiaohui Liu

Professor Xiaohui Liu.

A Loughborough academic says British firms need to employ Chinese migrants in key positions if they want to get a foothold in China.

Professor Xiaohui Liu’s recommendations are a result of her research into the knowledge transfer between UK and Chinese firms.

She discovered that Chinese people who are educated in the west and employed as executives/managers  by major British firms are the key to success in the burgeoning Chinese market.

In research funded by the British Academy, Professor Liu interviewed 12 Chinese migrants in the UK and eight of their counterparts in China who they did business with. Data was collected through interviews and observations.

She says they all regarded themselves as ‘special’ because they were viewed as ‘insiders’ by both the British and the Chinese and acted as a bridge between the two cultures.

Professor Liu is writing a paper called, ‘It does not matter which language they speak – Chinese migrants and inter-firm knowledge transfer between the UK and China’.

Her findings are important at a time when human mobility has increased dramatically, the number of international migrants rocketing from 75 million in 1960 to 214 million in 2010.

Professor Liu, who is from the School of Business and Economics and an expert on knowledge flows and human mobility, said: “We interviewed 12 Chinese migrants in the UK, people who work for UK companies.

“We wanted to look at their role in knowledge transfer between UK firms and Chinese firms.

“They are a special group because they are bilingual and have a bicultural background.

“They act as a link between British and Chinese firms. They are the ones who pave the way in how to do business with British and Chinese people.

“They are considered as insiders by both sides. They have the UK company’s identity, but once they get to China the Chinese say ‘you are one of our own, so I can talk to you.’

“Twenty people all said the same thing. They feel important because they can make things happen.”

Professor Liu said the Chinese migrants were vital to British businesses who want to capture a big slice of the growing Chinese market because they are accepted back home.

She said: “There are quite a lot of barriers between British culture and Chinese culture.

“The Chinese people do not understand how the British people behave and do business.

“The British have difficulty in understanding how the Chinese behave when they say, ‘oh it’s nice’ and nod their heads, and six months later say, ‘I did not agree anything.’ It’s just politeness.

“If British companies want to grow business in China or attract Chinese firms to the UK, they are the key.

“And if they do it with Chinese people they can do it with Indian people and African people. These findings can be generalised. Everything is global.

“In the past we sold and bought goods. But now people move around. My research is with highly skilled migrants who are educated in the West, are bilingual and operate in two systems.

“They are very important, important for China, important for the UK.”

Professor Liu has also been involved in a joint project with Prof Jiangyong Lu, of Peking University, which gives an insight into why returnee-led firms and local Chinese firms in Zhongguancun Science Park - China’s Silicon Valley – perform differently.

She found that while the firms led by Chinese people who had been educated and trained in the west were strong on innovation, they were out-performed financially by firms led by local entrepreneurs who were better at marketing

The project was called, “Return migrants and international knowledge flows: China and the UK”.

She said: “Marketing in China is not like marketing in the West. It’s more about connections, and relationships. In China we call it Guanxi.

“They face institutional barriers when they want to commercialise their technology or innovation. It’s not enough if you only try to create patents and technology if you don’t have the capability to commercialise it.”

She said the Chinese government should provide support to returnees to help them turn new ideas and innovation into a successful business.

However, Professor Liu also found that subsidiaries of foreign firms, including major British companies, fared well with returnees in key positions because they acted as a bridge between the two cultures.

Professor Liu gave a keynote speech at the International Forum on Innovation Oriented Economics in Chongqing, China, and she was also interviewed by the Chongqing Business newspaper about her research.

She also gave a talk at the Institute of Social Economic Research, Peking University, and at the Management School, Beijing Institute of Technology.

−ENDS−

For all media enquiries contact:

Chris Goddard
Public Relations Officer
Loughborough University
T: 01509 223491
E: C.J.Goddard@lboro.ac.uk 

Notes for editors:

Loughborough is one of the country’s leading universities, with an international reputation for research that matters, excellence in teaching, strong links with industry, and unrivalled achievement in sport and its underpinning academic disciplines.

It was awarded the coveted Sunday Times University of the Year 2008-09 title, and is consistently ranked in the top twenty of UK universities in national newspaper league tables. In the 2011 National Student Survey, Loughborough was voted one of the top universities in the UK, and has topped the Times Higher Education league for the Best Student Experience in England every year since the poll's inception in 2006. In recognition of its contribution to the sector, the University has been awarded six Queen's Anniversary Prizes.

It is a member of the 1994 Group of 12 leading research-intensive universities. The Group was established in 1994 to promote excellence in university research and teaching. Each member undertakes diverse and high-quality research, while ensuring excellent levels of teaching and student experience.

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