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China: the view from Ground Zero

China General Interest

NZCTA Executive Committee member and entrepreneur / consultant, Chris Lipscombe, takes China Now readers on a guided tour of his journey to found Ground Zero, a New Zealand consulting company with China-business expertise.

Back in 2000, when I chose the name Ground Zero for my consulting company, the phrase was a reasonably innocuous description for ‘starting from first principles, or square one.’ I was then the co-owner of a Wellington-based graphic design – we liked to say ‘visual communications’ – company, and Ground Zero was our vehicle for providing strategic marketing services to clients who already had design partners or who did not necessarily want our design services.

One year on, Ground Zero had come to mean a smoking hole in the ground in the middle of Manhattan. Not an auspicious start for a new consulting company, one might have thought. A year later, I had sold out my interests in the design company and was working under the name Ground Zero for clients in Australia, United States, Singapore and Dubai. Despite some awkward moments explaining my choice of company name to US contacts, I was starting to see a future in providing international consulting services from a New Zealand base.

During the period 2003-8 I worked as a General Manager for Wellington’s regional economic development agency, Positively Wellington Business, or PWB for short. Ground Zero continued to provide strategic marketing services to local clients, but through PWB I was starting to explore offshore market opportunities for Wellington’s creative content and ICT companies, especially in Singapore.

New Zealand and Singapore had entered into a Closer Economic Partnership, commonly known as the CEP, in 2001, and it was widely assumed that the agreement would open up opportunities for trade in goods, services and investment for businesses in both countries. Through collaboration on the design and delivery of interactive museum and other visitor experiences under the umbrella brand Creative Capital, a number of Wellington-based companies hoped to find in Singapore the clients, partners and contacts that would provide the base for expansion into the growing markets of Asia.

PWB provided significant support for Creative Capital, and in 2002 backed its pitch for the display and interactive components of the prestigious Singapore History Museum project. The pitch was unsuccessful, and in retrospect was the turning point in Creative Capital’s venture into Asia.

Despite winning a number of high-profile projects and earning almost $7 million NZD for participating businesses over the period 2002-3, the Singapore experiment was at best a qualified success. One or two member companies were able to establish themselves as successful providers of museum and visitor experiences in the region, but Creative Capital soon imploded under the financial and other pressures created by an under-resourced international expansion strategy.

Among the lessons I learnt from this experience was the need for advance planning and careful alignment of business and government activity in order to ensure business success in offshore markets. New Zealand companies and the agencies that supported them at a local and national level had not been ready to take full advantage of the CEP between New Zealand and Singapore. This would have to change.

As part of the Singapore experiment I had evaluated market opportunities for creative and content and ICT companies amongst the other ‘Asian tigers’ – Hong Kong, Taiwan and South Korea, and together with Singapore sometimes also referred to as ‘China’s four little dragons.’ Along with Japan, the world’s second largest economy after the United States, and the People’s Republic of China, the world’s fastest growing economy, these were the markets that seemed to hold the most promise for an Asian expansion strategy.

In 2004, I made my first visit to China. I met with business and government representatives in the Hong Kong Special Administrative Region (HKSAR), in the great metropolitan cities of Beijing and Shanghai, and in the more provincial (but no less bustling and prosperous) cities of Xiamen and Fuzhou. I was fortunate to be visiting China right at the start of the Free Trade Agreement discussions between China and New Zealand. Well in advance of agreement being reached, I realised we had an opportunity to lay the groundwork for building successful business partnerships across our two countries.

Over the next four years and fifteen rounds of FTA discussions between China and New Zealand officials, I took dozens of Wellington businesses into China. Using government, sister city and business association contacts, I introduced these businesses to potential suppliers, customers and partners. By the time the China-NZ FTA was announced in 2008, these businesses had their own networks and in some instances local agents and employees set up and ready to go. Wellington’s regional economic development agency, now called Grow Wellington, had also formed alliances with its counterparts in China and elsewhere in the region focussed particularly on support for the digital content industry.

These networks continue to provide significant value to businesses looking to enter markets in North Asia. I now work through my company Ground Zero to provide strategic planning and business facilitation services to clients in New Zealand, as well as raising capital offshore for ICT, digital content and education companies. Through matching North Asian-based investors and local companies with potential for growth, I can provide a viable pathway for companies to succeed in the global marketplace.

NZCTA’s recent agreement with KEA to work together on mutual interests in China is a splendid example of the potential of networks to generate business opportunities for New Zealand companies. According to the media release, KEA, formed in 2001, leverages the knowledge and contacts of talented New Zealanders around the world. KEA China was formed in 2005 to build on the fast growing relationship between China and New Zealand in trade, investment, education, tourism and migration.

The first fruit of the NZCTA-KEA relationship is likely to be the formation of a KEA chapter in Xiamen, to be announced during the China International Fair for Investment and Trade (CIFIT) held annually in September. Ground Zero will participate in a trade and business delegation to Xiamen, to coincide with the Fair, and I will be there wearing a couple of hats. My presence as Deputy Chair of the Wellington-Xiamen Association reflects the strong relationship between Wellington and Xiamen, and the commitment by both municipal governments to the furthering of business, cultural and educational interactions between our two cities. As NZCTA Executive Member, I also want to support the business activities of KEA members based in Xiamen, and promote linkages between KEA and NZCTA members that may find advantages in working together.

The China-NZ FTA is now one year old. Some of the benefits to New Zealand companies were available from Day One, and others will take years to realise. But the benefits from networks already in place are there for the taking. Personal networks built up through in-market visits, exchanges across industry associations, cross-agency introductions, sister-city relationships and contacts through organisations like NZCTA and KEA may provide a useful resolution to a knotty marketing problem, or a critical market entry point for your business. Either way, it’s an opportunity you would be foolish to miss.

That’s the view from Ground Zero, at any rate.

Chris Lipscombe is an experienced strategic planner, marketer and business adviser with previous careers in graphic design, publishing, marketing and IT. Chris established his company Ground Zero in 2000, providing strategic planning and capital-raising services to Wellington-based clients. He has been leading or participating in business and trade delegations to China since 2004, and has been Deputy Chair of the Wellington-Xiamen Association since 2007.

Tags: fta