A Chinese billionaire's bid to purchase 300 square kilometers of land in Iceland has ended with the local government rejecting the deal, citing technical reasons such as the company directors needing to be permanent residents for at least five years.
Huang Nubo, head of Beijing Zhongkun Investment Group, complained to the media that his business deal, a $200 million project aimed at building a tourist resort, had been a victim of political prejudice against Chinese expansion.
It is hard to deny that a bid to acquire 0.3 percent of a country's total land will unavoidably draw suspicions and criticism from local people and authorities. Especially at a time when Chinese companies have been going all out to seek overseas business opportunities, Huang may have become one of the Chinese entrepreneurs who were blocked for political concerns ranging from security or protecting local businesses.
However, it is also worth looking back at the Chinese companies themselves. Are they fully ready to take on the world market? Do they acquaint themselves well with the foreign country's local laws and business requirements? Are they trying to take shady business practices abroad that seemingly cause no trouble in China? And finally, are they ready to overcome misunderstandings and disputes with local authorities before they can eventually settle down?
Chinese businesses have been gaining large ground in overseas markets in recent years, in both developing and developed countries. Made-in-China brands are often quality goods, but Chinese companies are not generally respected overseas.
It is true that some countries, such as the United States, have been particularly paranoid about Chinese companies when it comes to business acquisitions or large transactions involving Chinese investment, just as they did when Japanese companies tried to enter the US in the 1980s. Chinese telecom equipment giant Huawei, for example, has met with resistance from US politicians for years for "security" reasons.
Political concerns aside, the behavior of Chinese companies at home does not project their image overseas in a favorable way. Repeated scandals about product safety and business ethics are enough for overseas consumers and authorities to worry.
When even domestic consumers are worried about the reliability of daily commodities and find themselves at a disadvantage when seeking to defend their rights against the corporations, it is clear Chinese companies still have a long way to go before they can win the trust of foreign markets.
One failure or two are not major problems. For Chinese companies that eye solid business expansion, it is a chance to hone their survival skills and learn to do business in a more mature way.