February 2010
By Rocío Txabarriaga

Rocío Txabarriaga wrote this article for Common Sense Advisory. Txabarriaga has worked for over two decades in both linguistic and executive capacities in the language services industry.

Implications of increasing Europe’s trade with China

Is English still the language of business? There is no simple answer to this question, but there is also no doubt that China is investing more and more outside its borders, including the European continent. Companies and governments around the world with no significant economic ties to China in the last decade of the twentieth century are now trading with this giant, some of them heavily. How then are these countries doing business with China? Is it in English, the so-called “language of business”? Or is it through language services? If the latter is the case, who has adapted to whom? Are Chinese entrepreneurs learning other languages or are people in other countries learning Chinese? Are language service providers (LSPs) translating more from Chinese into European languages or vice versa?

It’s the economy, liebe Freunde

Just 20 years ago, trade between China and Europe was sporadic and statistically insignificant. In the first half of 2009, the European Union (EU) was China’s largest trading partner with a volume of US$224.69 billion, surpassing the United States. China is also the largest recipient of EU exports. Even though China’s accelerated economic presence in Europe and emerging economies has been dubbed by some as opportunistic, the fact is that China has seen continued and explosive growth throughout most of the past decade — averaging a 10% gross domestic product expansion while the economies of Europe, the United States and most of the world were contracting. Global recession was on the horizon in 2007, and Chinese entrepreneurs saw an opportunity to invest in and outright acquire companies in multiple verticals around the world, many on the verge of bankruptcy at the time of acquisition. Participation in offshore infrastructure development contracts, major acquisitions of mineral and metal outfits and increased imports of Western goods are all a part of the complex economic landscape of a global, powerful China.

Trade protectionist measures in the United States have shifted China’s attention quickly to Europe and several emerging economies such as Brazil and India, with some European markets openly courting Chinese investors in an effort to boost exports and increase investments. Chinese investors have acquired whole and majority stakes in companies based in Germany and Italy, among others. At the same time, according to Eurostat (the European Statistical Office) exports between Europe and 16 Asian countries had grown by around 60% by 2007, before the recession hit in earnest. China is now Europe’s main trading partner, representing a third of total exports and most imports.

However, this does not mean that Europe, the international lender par excellence of a not-too-distant era, has simply capitulated and opened its doors to a flood of foreign investment. The Chinese have made a deep footprint in European manufacturing, and expansion of the Chinese purchasing power outside of its own borders marches on. But even though trading has greatly increased, some barriers to entry for both imports and direct investment remain. Europeans, like Americans, are no strangers to well-publicized cases of quality control disasters in Chinese-made products and are uncomfortable with China’s human rights record. Trade disputes between China and the EU, including a dispute over intellectual property (IP), also dot the trade panorama.

The compromise in some cases has centered on a demand to keep business as usual in Chinese-owned companies in Europe. In other cases, multinational companies have applied European models of management and quality assurance to ensure compliance with regional standards and regulations. Directives still require over half of the total of parts and labor used in production on European soil to be European in origin. In a clear example of localization by definition, some Chinese-owned companies have taken on European-sounding names and maintain most operations in Europe, mainly to leverage European expertise.

Trade operational models between China and the rest of the world are certainly changing. While manufacturing in China by foreign-owned companies continues to be strong, it is no longer showing signs of aggressive growth. Higher per-capita income and expenditure in China also mean that the Chinese are now heavily investing at home, as foreign companies have done for decades. But what does this all mean for the language services industry? Economic indicators like those previously discussed provide a general idea of the pulse of stronger Sino-European economic relations. Table 1 more fully illustrates their impact on specific verticals and presumably the need for language services.

Export volumes between Europe and China in 2008. Source: Common Sense Advisory and the European Commission

Realities of language transfer between China and the EU

Four years ago, the Chinese Ministry of Commerce acknowledged an acute lack of qualified translators and interpreters, a major concern as the 2008 Summer Olympics drew closer. The Chinese government encouraged citizens, especially in Beijing, to learn other languages and take basic courses to become translators and interpreters. However, the number of competent Chinese translators is still minuscule compared to the gargantuan volumes of information being generated, not to mention the increasing number of language combinations.

English is still the most popular language to learn, making the availability of qualified linguists in other languages negligible in both regions. People in the export-import arena are thus forced to communicate in English, with varying levels of fluency and risk for miscommunication. As Leonard Orban, the EU Commissioner for Multilingualism recently expressed during a seminar in Stockholm, “if you speak your mother tongue, you say what you wish; if you speak another language, you say what you can.” Negotiations, an integral part of trade, are thus the first level of risk encountered by trading parties. Interpreters may be on hand to facilitate exchanges among business people, but how many of them are knowledgeable in, say, bulldozer engines?

Many Europeans are already fluent in other European languages, and many Chinese do speak adequate English, but when it comes to other levels of bilingualism, the numbers are reduced in many cases to a few academics and, of course, the immigrant population. Few language schools offer Mandarin or Cantonese in Europe; the best option for those with a need to gain some fluency is to self-study or hire a private tutor. For Europeans in need of school-based instruction in those languages, study-in-China programs advertised in Western European languages are the norm.

At the same time, in both China and the EU, the number of registered LSPs has tripled in the past two years. In the EU, when it comes to LSPs for Chinese and other non-European languages, it is immigrants or first-generation heritage speakers who have most recently set up translation shops in countries such as Germany and France. The typical LSP offering direct translation to and from Chinese is a one or two-person outfit, capable of handling a small volume of documentation and noncomplex web localization projects. The same is true for China, where translation companies number in the thousands, but the vast majority is comprised of individual translators.

Because English language combinations still rule, enterprise-level translations are largely a relay exercise. Information is first transferred to English and then to a third target language. In the process, something is inevitably lost in translation. The translation cycle also doubles, which means twice the price. Some LSPs see this phenomenon as an opportunity to increase profits, but because localization is still an afterthought for many companies, cost is always a concern. Thus, only essential, regulatory or IP documentation gets translated. The patent translation business is now larger than ever, but this is considered to be highly specialized translation, so the supply of expert translators to handle it competently is largely insufficient.

When opportunity knocks, pay attention

Many of the largest global translation and localization companies have had a presence in China for many years now, either by setting up a Chinese subsidiary or by way of acquisition. Even more LSPs plan to set up offices in China. Numerous industry events have also taken place in China since 2004, starting with small meetings (mainly academic translation events) to large events such as the LISA Forum Asia in 2006, Localization World Shanghai in 2007 and the XVIII FIT World Congress in 2008.

Even so, much work remains to bring the translation and localization business in China up to the level of maturity enjoyed by its counterparts in Europe. The time when direct human-provided language transfer between Chinese and European languages other than English becomes commonplace is still far into the future. In the meantime, those who can be first at offering direct quality translation at enterprise level volumes will set the standard. Incorporating tools such as machine translation and multilingual authoring will help make the most of the services offered by these pioneering LSPs. Strategic planners for both buyers and LSPs should pay attention to the following opportunities:

  • Chinese-owned companies are now building machines or carrying out large construction projects across the world, from Germany to Australia and from Angola to Mexico.
  • Other powerful non-EU economies are trading heavily with China: Brazil, Russia, India (known collectively with China as BRIC). Expect an increased volume of translation in the near future between Chinese and Portuguese, Russian and Hindi/Urdu. Arabic <> Chinese projects are also poised to be more frequently requested.
  • The most common way for Chinese companies to market their products in the EU is through distributors or dealers. These relationships need to be brokered and established, with interpreters helping at the onset and translators added to the equation once the regulatory process (such as homologation of Chinese autos) is under way.
  • Quality control issues still plague some Chinese imports. Accusations of IP right infringement are also commonplace. Legal processes require the translation of a great deal of documentation, so subject matter specialization will be increasingly demanded of LSPs.
  • The main verticals in which the EU is trading with China are agricultural machinery and products, autos and auto parts, aerospace, chemicals, food, logistics and transportation services, heavy machinery, metals, mineral resources and pharmaceuticals.

In the 1990s, American politicians frequently talked of “a new world order.” At the time, this phrase referred to the end of the USSR, the German reunification, and what both of these events represented politically to the United States. In today’s new world order, economic factors rule a globalized world. They can make or break societies. Governments and private institutions should do more to encourage and fund foreign language and translation/interpreting education in order to improve their standing in the global landscape. After all, quality translation, localization and interpreting services are crucial to maintaining actual world order, be it political, social or economic.

 

Examples of Sino-European trade: recent examples and languages affected. Source: Common Sense Advisoroy

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