By Zheng Yangpeng in Dalian, Liaoning ( China Daily)
Survey finds that respondents see nation's goods as poor in quality in comparison
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A customer tries a Lenovo computer at the Milan Design Week in Italy. A few Chinese corporationsstand out in winning higher levels of trust in developed markets, with Lenovo Group Ltd earning a 72percent consumer awareness rating in the United States. Wang Qingqin / Xinhua
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China's multinational corporations face a wide gapbetween how they are trusted at home and abroad,according to an international survey released onWednesday.
While enjoying an 83 percent trust rate in the domesticmarket, these companies won only a 50 percent trustrate among respondents in other emerging markets -and the figure was just 24 percent for developedmarkets, a survey by global public relations firmEdelman found.
The level of trust in Chinese corporations in developedmarkets is even lower than for companies based inSouth Africa and India: 31 percent of the respondents indeveloped markets trust corporations based in SouthAfrica and 28 percent trust companies from India.
China-based companies rate particularly low inGermany (19 percent), France (22 percent) and theUnited States (26 percent), the survey found.
Edelman interviewed 5,400 "informed onlinerespondents" in nine developed and emergingcountries.
The report attributed the trust deficiency mainly to lowbrand familiarity and sensitivities about Stateinvolvement. Respondents in developed markets believethat companies from the emerging markets have closeties with their national governments.
While respondents in developed markets have a 50percent trust rating in listed companies, only 37 percenttrust State-owned companies.
Richard Edelman, president and chief executive officerof Edelman, noted that people in developed markets areincreasingly nervous about Chinese companies enteringtheir markets.
He noted that only one-third of the respondents indeveloped markets are willing to see a Chinesecompany buy a company in their markets, and only 38percent want a Chinese company to get access to theirmarkets.
"This is a big problem. 'Branding China' is not helping ifChinese companies want to go global," he said.
But a few Chinese corporations stand out. Lenovo Group Ltd earned a 72 percent consumerawareness level in the US and Air China Ltd enjoyed a 63 percent rating. These levels weremuch higher than corporations in other emerging markets.
Wang Jianlin, chairman of Dalian Wanda Group Co Ltd, a major Chinese real estate developerthat has expanded aggressively overseas in recent years, said the trust deficit is "normal"because corporations in emerging markets are still in the early stages of development.
He said at the World Economic Forum Annual Meeting of the New Champions in Dalian that hiscompany's overseas expansion, including the acquisition of US cinema conglomerate AMCEntertainment last year, had not been affected by the trust issue.
He added that Wanda had discussed the move fully with AMC executives before seekingshareholder approval.
The survey also found that in developed markets, the most common perception of China-basedcorporations is they lack transparency and openness. Developed market respondents alsothink that Chinese companies have failed to produce high-quality products and act responsiblyin a crisis.
David Brain, Edelman Asia-Pacific president and chief executive officer, warned that companieswill pay the price if they fail to respect employee rights and protect intellectual property rights.
"Trust is money. Low trust among customers will surely lead to artificially low valuations in initialpublic offerings, or delays or failures in overseas acquisition," he said.