Trade secrets
China's increased international focus could prove perilous for both Hong Kong and Western traders, a UQ thesis warns. A University of Queensland PhD thesis shows Hong Kong firms have become well-meshed within Chinese business networks, particularly within the southern Chinese provinces.
"Hong Kongans also continue to develop and extend their network linkages within China by expanding and/or relocating their activities to emerging mainland economic regions. Hong Kong firms also continue to maintain and develop their established business channels into Western buyer markets," author Dr Michael Trimarchi (pictured below in Brisbane's China Town) says.
"Hong Kong firms, however, appear reluctant to weave Westerners into their Chinese networks. Westerners also appear reluctant to extend their relationship links beyond the immediate actors of engagement in Hong Kong. Such factors not only limit the involvement of Westerners into broader Chinese networks, they also limit Hong Kongans from broader involvement in buyer networks located in Western markets."
Dr Trimarchi said as mainland China continued to develop its international focus, such strategies could prove perilous for Hong Kongans wishing to retain Western market channels, and Westerners who lacked the commitment required to understand and work with the difficulties associated with mainland Chinese production.
"This was a position that both Hong Kongans and Westerners embraced at their own peril," he said. Hong Kong intermediaries and buyers from the West needed to carefully consider how they could consolidate their relationships and network positions. Indeed, it should be the mission imperatus.
Dr Trimarchi?s PhD through UQ?s Business School explored trade interactions between Hong Kong Chinese intermediaries (or traders) who purchased goods from mainland Chinese sellers, and then onsold them to buyers in Western markets.
Dr Trimarchi, a lecturer in marketing and international business at the University of the Sunshine Coast, said there had been little previous research conducted on business relationships between Hong Kong Chinese and mainland Chinese business partners, and Hong Kong Chinese and Western business partners. The thesis included a total of 38 case study interviews (five in mainland China and 33 in Hong Kong).
He said Hong Kong was one of the world's most trade-dependent nations. During the early decades of the Cold War, the People's Republic of China (China) was a leading Marxist-Leninist economy.
"Since the Open Door Policy introduced in 1978, and the market reforms introduced since the 1980s, China has adopted the strategy of 'socialism with Chinese Character'; a form of capitalist-Leninism. Since and before the 1997 'handover' of Hong Kong to China, the main entry point into China has been Hong Kong," Dr Trimarchi said.
An important component of Hong Kong trade included the purchase of products manufactured in mainland China by Hong Kong intermediaries, who then onsold the products to reliable and high-demand buyers located in Western markets.
However, little was known about the complex nature of the relationships taking place within the atmosphere of such focal business interactions. Dr Trimarchi developed an interaction model to study the research problem. Six constructs underpin the model including compatibility, co-operation, co-ordination, complexity, communications and character.
A significant finding was that there was a reluctance for business partners in China to establish close personal ties with non- relatives; including relationships between mainland Chinese and Hong Kong Chinese.
The thesis outlines the implications for Western managers wishing to develop business networks with Hong Kong partners, to source goods produced in mainland China.
This included a framework to assist partner-choice when dealing with Hong Kong traders, and five broad elements to assist Westerners to develop and manage such relationships. Conclusions for the future of the Hong Kong business environment, with relevance for mainland ChinaHong/KongWesterner relationships are also discussed.
The thesis was supervised by Associate Professor Rick Tamaschke of UQ's Business School.
Research team
Dr Michael Trimarchi
Funding
1996 internal research grant,
University of the Sunshine Coast ($3950)
1996 Honorarium, University of Hong Kong (AUD$1000)
1997 internal research grant,
University of the Sunshine Coast ($3600)
11/1997-1/1998 Honorarium, University of Hong Kong (AUD$4000)
Personal funds
MTrimarc@usc.edu.au
