Just as western companies feel unacclimatized to Chinese markets, Chinese companies also come across troubles when trying to enter western markets. Huawei and ZTE were challenged with security concerns when they were applying for US market entry permission. I watched the hearing before the Congress on Youtube, which lasted for more than three hours and raised many interesting questions.
One question that challenged both companies was the role of Party Committee in their companies. The CCP Committee is an interesting organization in the sense that there isn't a clear definition of its role but its impact is everywhere. On the face of it, it does not interfere the operations or decision-making process of companies, but you absolutely don't want to go against it. The existence of Party Committee doesn't imply that the Party has direct control over it - almost every organization has a Party Committee; but it also doesn't mean that the company can be independent of the influence from the Party. The Party Committee system has been firmly established as a legacy from 1989, and is one of the most silly systems in China. Obviously the US Congress found it ridiculous to have a Party Committee in a company while keeping its independence and was very concerned about the components of the Committee. If I were the US Congress, I would not worry that much about this Party Committee thing, but might want to investigate further on their connection with PLA.
Another question also reflects the deep distrust of the US on Chinese companies. Huawei and ZTE were questioned if they would provide information to the Chinese government at the cost of their clients' benefits. Both companies promised not to do so. But the chairman sniffed at it and said, "even if that will put you in jail?" Even I can't buy their answers. Yahoo!, an American company, had to sell its clients' information to Chinese government to legitimize its operations in China, let alone Chinese companies: how can their US branch continue to work when the parent company gets in trouble? Not every company can be Google, and it's simply too costly for Huawei and ZTE to give up their Chinese market share.
This is my first time to watch Chinese companies receiving hearings in the US Congress, and I think this will provide a big lesson for their Chinese fellows. The difference in market and corporate-government relations between the US and China can produce huge barriers for companies on each side. Now the security concerns stopped Huawei and ZTE from expanding into the US market, and next time other issues may be raised against Chinese companies. To overcome the obstacles, fundamental internal reforms will be required to adapt Chinese companies to free markets; and the relationship between government and market in China has to be reformed as well.
Before any big change takes place, there is one thing that Chinese companies can do to assuage the conflicts between different systems: find better spokesmen. Both the hearing looked so miserable partly because of the deep-rooted difference between China and the US, but partly due to the way these two spokesmen handled the questions. Both of them, I believe, are high-level officials in the company, and they are too familiar with dealing with Chinese officials, and are very good at empty talks. However it doesn't work in the US: the Congress kept urging them to answer questions, providing details instead of talking "principles". Also, they may want to improve their English and know more about the US culture, which will help them better answer the questions as well.
Anyway, I'm proud to see Chinese companies making progress in exploring international markets. Learning by doing, and the growing pains will be beneficial in the future. This hearing will be historical.
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