Tackling the cultural divide is a key to Asian economic success

A largely intangible part of the WA Government's new Asian Engagement Strategy may prove to be the key to its success.

Cannings Purple 10 Sep 2019
3 mins
WA's Asian Engagement Strategy

The WA Government should be congratulated on its recent announcement of the State’s first Asian Engagement Strategy.

The Government’s media release provided plenty of statistics that illustrate why this strategy is so important – including the more than 500 per cent increase in WA exports to Asia between 2014 and 2018 (to a massive $129 billion) and the fact Asia will represent half the global economy by 2050 and have 60 per cent of the world’s middle class citizens by 2030.

But amid all the details in the strategy, there was one particular component that stood out to me. It is a pledge to:

“Support Asia literacy and capability with a commitment to Asian language capabilities, socio-cultural and institutional literacy that is required for long-term engagement and success in Asian markets.”

One of the biggest deal-breakers for any form of transaction is when one of the partners doesn’t understand where the other is coming from (and/or doesn’t try to understand). In my experience this has often been an issue for WA businesses seeking to interact with the Asian market, particularly China.

Jakarta is closer to Perth than Melbourne. Kuala Lumpur isn’t really much further away than Brisbane. You can fly direct from Perth to Guangzhou in eight hours and from Perth to Tokyo in less than 10.

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Our Asian neighbours are, geographically, right at our doorstep. And yet, generally speaking, there remains a gulf in understanding between many West Australians businesses (and business people) and some of our key trading partners when it comes to cultural awareness, knowledge of business and social customs and, of course, language and communications.

As a case in point, when the Australia-China Relations Institute published a 2016 report entitled Building Chinese Language Capacity in Australia¸ it noted measurable progress in closing the language gap since 2008. Yet it also found that in 2014 there were still only 25 WA secondary schools teaching Chinese across the government, independent and Catholic sectors – and just 60 WA students studying Chinese in Year 12.

Presumably progress to close the gap has continued but it’s worth reflecting that at the time of the statistics quoted in the report, WA’s exports to China were already worth $24 billion a year.

On the flipside, I’ve also observed WA business people become so fixated on how different their Asian transaction partners might be that they do not treat them as normal people. Chances are, the person sitting on the other side of the table shares quite a bit in common with you.

There is also a common misunderstanding surrounding the availability of funds and the timeframes in which Asian investors are seeking returns. Asian investors need to make strong financial returns in timeframes no different to serious Western investors. Performance is closely monitored.

In conclusion, I agree wholeheartedly with Asian Engagement Minister Peter Tinley’s comments that WA’s future prosperity is inherently linked to its engagement with Asia.

The McGowan Government is right to seek to maximise investment and trade opportunities, commit to working closely with the State’s Asian community and offer businesses access to direct advice and business and trade networks.

In many of these target areas the Government has detailed tangible actions to achieve tangible results. But by opting to also focus on something largely intangible – the cultural divide – the Government will ensure its Asian Engagement Strategy, and WA’s economy, has the best possible chance of success.

Keith Jones is the Chairman of Cannings Purple and an expert on Australia-China relations – having established and led the China Services Group for Deloitte in Australia. He has nearly 40 years of experience providing expert advice and management consulting to industry leaders across Australia.

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