Article for translators: Going local in China

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Going local in China

By TOIN Corp.

www.to-in.com

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An Insider’s View From TOIN

Clientside News recently interviewed Shinichi Kojima, Country Manager of TOIN China, to get an insider’s perspective on how China and the general emergence of Asia is impacting the localization industry.

CSN: In 2006, the Asian and China markets were exploding. How has rapid growth changed the landscape?

SK: With all the interest, one trend is that global companies are treating Asia and China not as a special situation, but more as an integral part of their plans. China is a player as a source of labor and intellectual capital and, more importantly for the future, it is a rapidly growing consumer market.

Also, our industry and our clients will need to view China as something beyond the world’s production factory. Labor costs are getting higher, and I think we will see the Yuan get stronger. The city of Shanghai, for example, is changing its inducement strategy to attract knowledgebased service industries, instead of manufacturing.

Plus, the Chinese government is discussing ending preferential treatment of foreign companies to protect Chinese businesses. In fact, we will continue to see Chinese companies make a push to compete internationally with their own brands. You might recall that Chinese automakers Geely and Changfeng made a good impression exhibiting their own cars at the Detroit Auto Show this year and last.

For localization firms, I think these trends have created an impetus to act globally, like our clients. For instance, our company has developed a presence in China and also recently created TOIN USA, to mirror the global structure of our clients and to create back-and-forth services among China, North America, and beyond, since that is required by the flow of trade.

The Chinese languages are relatively inexpensive, often less expensive than European languages, because the cost of labor is cheaper, but since the demand exceeds supply, the cost of Chinese is getting higher. Japanese has been expensive because the cost of labor is already high, but Western companies are less willing to treat Japanese as a special case, and they want pricing to fall in line with other languages. Innovative localization firms will need to build capacity, search out talent in competitive labor markets and make greater use of translation technologies, among other strategies, to get an edge.

CSN: The focus on China has cast a shadow on other parts of the region. What should we keep in mind about other emerging Asian countries?

SK: With economic growth rates topping 10 percent annually, clearly China is a flashpoint, but many other Asian countries offer growth and opportunity. India’s economy is booming. Many companies are looking beyond China to Southeast Asia and, in particular, to Vietnam, a new WTO inductee, for more competitive labor markets.

CSN: With all the fervor for expansion into Asia, it’s hard to know what is hype and what is real; what are some overstated and understated conditions that impact clients?

SK: Working in emerging markets is exciting. Growth opportunities combined with the feeling of really building something can be tremendous. But success is not guaranteed. The stakes are high, just like anywhere else, and businesses that wish to expand into Asian markets will experience hardships, obstacles, and ups and downs. In China, there are industry sectors that now present serious barriers to entry, because foreign companies have already invested so much over long periods of time to establish market share. Many companies will look for new opportunities beyond the major Eastern Seaboard markets.

In many ways, China still is a special case, even if multinational companies do not wish to see it this way. Walking down the street in Shanghai, it is easy for one to succumb to the illusion of being in a cutting-edge capitalist city. But the reality is something else. Culturally, westerners will probably feel a much greater gap doing business in China than they do in Japan. One must always keep in mind that China is a communist country with a government that has the authority to change laws and regulations overnight—literally. There is no such thing as private property anywhere in China. Real estate is owned either by the government or the community. For example, all the high rise buildings in China are built with leases. And you should never underestimate the power of local government offices.

CSN: Some North American clients are fearful of entering Asian markets from a cultural standpoint, a technology standpoint, and an implementation standpoint. They feel the need to have a presence, but lack the knowledge base that gives them the confidence to jump head first into this market. What are some of the emerging solutions to help them launch into an Asian expansion plan with confidence?

SK: The irony of this question makes me smile, because in the eyes of some Asian companies, North American and European markets seem daunting. Obviously, we believe localization firms that offer clients specialized expertise in unfamiliar markets are part of the foundation for success. We have the cultural, technical, and procedural knowledge to act as the facilitator. As far as emerging solutions, I think this goes back to the idea of clients making Asian localization a more integral part, instead of treating it as an afterthought. This creates the opportunity to build Asian localization into the overall plan, benefiting from efficiency and cost savings.

CSN: What are the biggest mistakes companies make as they launch into the Asian market?

SK: As I have mentioned, I think there are common misconceptions and assumptions about Asian countries, China in particular, that can lead to mistakes or pitfalls. It has to do with Western companies having expectations that are too lofty, and having a picture of the region that is not always accurate. These are cultures and economies that are in flux, and good business requires fresh information, whether you are looking to sell products or services in these markets or whether you are looking for labor solutions.

On that note, certainly you do not want to go to Asia solely because the cost of labor is cheaper. This is true for any market, but in Asia you really have to understand the local market and consider the benefits for the local people. If you are extending your business into China, you have to put effort into understanding the Chinese culture, respecting their way of thinking, and considering the pros and cons of globalization, not just for your company, but also for the local people and economy. This is also true when you extend your business to other Asian countries like Japan or Singapore.

CSN: As we kick off a new year, and if you were able to look into your crystal ball of the region, what are some future trends the industry should be aware of, and how should clients adjust their existing approach or plan to capitalize on these trends?

SK: The Chinese economy appears to have every chance of continuing to grow at a high rate in the near future. There will be significant shifts away from manufacturing to knowledge-based service industries. Companies will look more to marketing products and services in China, rather than seeking cheap labor. Look at the expansion of General Motors, for instance, which has a healthier business selling cars in China than in the United States right now. Plus, we will see more Chinese brands outside China.

China’s success is beginning to create a class of people with more expendable income. For example, those who can afford it will spend a lot of money for their child’s education, due to the one-child policy. On the other hand, some experts point out that the next generation of labor might be too spoiled, due to this policy.

Plus, I think the consumer market will continue to expand within China, reaching the inlands.

This all sounds very positive, but again it is critical to understand the social and political context with its inherent tensions and contradictions. Conflicts could arise within China between the winners and losers in the new economy. And the dichotomy between the communist government and the forces of capitalism is ever present.

For more information on TOIN or this article, please visit www.to-in.com.

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