Caixin
Jan 16, 2018 07:08 PM
DOING BUSINESS IN CHINA

Marriott Map Snafu Offers Chinese Geography Lesson for Foreigners

This week we turn our attention from the ABCs of doing business in China to a geography lesson that offers some equal insight on complexities the market can sometimes present. In this case the Chinese geography at the root of this latest scandal is of a variety that’s quite unique to a market that can be quite lucrative but also equally unusual.

The scandal began when global hotel giant Marriott was “outed” last week for implying in some of its marketing materials that Tibet, Taiwan, Hong Kong and Macau were somehow different countries from China. That discovery, made by some chatty netizens, was quickly followed by similar “outings” for other multinationals with big Chinese operations, including U.S. airline Delta and Spanish fast fashion clothing chain Zara.

For those less schooled in Chinese history, I’ll give a quick history lesson that’s key to understanding this uniquely made-in-China scandal. Hong Kong and Macau are former European colonies, one once belonging to Britain and the other to Portugal, that were returned to Chinese rule with high degrees of autonomy in 1997 and 1999, respectively. As such, both are often considered separate markets for everything from companies selling products to membership in global organizations.

Meantime, Tibet has its own distinct ethnic group, the Tibetans, though the region has been overseen by China’s central government for centuries and is now part of the modern country. Last but not least there’s Taiwan, which is separately administered following a split during the Chinese civil war of the 1930s and 1940s, but is still generally considered part of China under a “one China policy” promoted by Beijing and accepted by most other countries.

Such complex geography is particularly sensitive within China, even though such subtleties are often lost on foreign companies from distant lands using boilerplate templates for their websites and marketing materials. Marriott was one of those, and was exposed for referring to Tibet, Taiwan, Hong Kong and Macau as “countries” on a recent customer survey.

Such wording is relatively common throughout the world for separately administered areas such as Guam and Puerto Rico, for example, which are part of the U.S. but are often considered separate from the 50 states that make up the main American market. It’s worth pointing out that savvier companies typically use the wording “country/region” in their templates to cover such exceptions.

Out of the loop

Marriott was apparently not one of those when it sent its customers a survey where it used Tibet, Taiwan, Hong Kong and Macau as choices from a list of “countries”. Many Westerners like myself would see this as a minor slip-up, since none of us really thinks Marriott was trying to make a political statement with its word choice. But some Chinese saw things differently, and expressed outrage at the labeling.

More online sleuthing revealed that Delta and Zara were guilty of using similar wording on their websites. In the end all three companies issued apologies, which has become standard fare for any international company that comes under such scrutiny in China. As punishment, Marriott’s China website was taken offline for a week, which couldn’t have been good for business. And lest anyone else squeak by unnoticed, the nation’s aviation regulator issued a notice calling on all foreign airlines to check their websites for similar transgressions and make necessary rectifications.

For me, this kind of scandal nicely illustrates a major theme of doing business in China, namely that this is a land of gray areas. Some Chinese netizens even noted in their original Marriott complaints that it was common for Hong Kong, Macau and Taiwan to get listed as countries on some foreign websites, and they were particularly upset this time because Tibet had also been included on the list.

All of this goes to show that many times foreigners and Chinese alike do things that fall into gray areas in terms of legality, knowing they can plead ignorance and offer an apology if exposed. Geography and other sensitive areas like the media are full of such gray areas, and land use is another that can cause similar problems. One of my contacts once advised that in such instances it’s often best to just go ahead and do something, even when it falls into such a gray area, and then apologize later if and when you get caught.

Another contact pointed out that Chinese geography is more clear-cut than some issues, and anyone who did their homework would probably have realized the perils of labeling Hong Kong, Taiwan, Macau and Tibet as countries. Yet another contact said that on setting up his company’s website several years ago, he was careful to ensure Taiwan was included in China on their maps in order to clear the country’s internet content provider’s requirements.

Obviously such subtleties may sometimes fall through the cracks, and even Chinese government agencies may become lax on some of these issues until they are called out by individual citizens or media reports. After that happens, regulators really have no choice but to sound a strict and castigating tone, including demands for apologies and rectification, as well as minor slaps on the wrist through measures such as temporary closure of a website.

At the end of the day, every company should really do some spade work to uncover local sensitivities before going into a new market. China may have more such sensitivities than other countries, but it’s certainly not unique. What’s more unique is the nature of China’s sensitivities, and also the notion that such issues can often be overlooked for years before they suddenly become issues after being exposed. Even when that happens, consequences are usually relatively limited if the offender offers an immediate apology and can take quick remedial action.

Doug Young has lived in Greater China for two decades, including a 10-year stint at Reuters, where he led China corporate news coverage. Send your questions or comments to DougYoung@caixin.com

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