By Robert Chua
These days I think I am probably best known as the pioneer of TVB in Hong Kong and founder of China Entertainment Television Broadcast ( CETV,) a Chinese language satellite TV network which began screening in 1995. The channel has had its ups and downs but with the new partner, Time Warner, its future looks good. Anyway I am convinced the concept of a regional Chinese language channel will be a winner, eventually.
I had been thinking about a Chinese channel since 1986 when I was hired as a consultant to a Hong Kong company, Hutchison Whampoa to advise them on their application for a cable television license.
But I have been fascinated about China since I was a young boy. When I first started travelling to China for business in 1979, the country was just starting to open up to the outside world. Crowds of people used to gather to stare at me and Peggy because of our modern clothes.
China had been more or less closed off to foreigners since the revolution in 1949 and neither Peggy nor myself ever expected to be able to visit during our life times. Peggy was able to revisit the home she grew up in in Shanghai and left at the age of two.
For me and Peggy, one of the most fascinating experiences was seeing soldiers of the People’s Liberation Army for the first time in real life. They looked so impressive, and so foreign – it really is hard to explain, but let’s just say you really knew you were in a different country when you went to China in those days.
Everyone dressed in blue or green, but with very few exceptions, all the people we met were very, very nice. And so curious about anything foreign they had never seen before: I once watched a crowd of more than a thousand gather around a couple of foreign carpet layers working at a new hotel. They knew what carpet was, but apparently no-one had watched it being laid by foreigners before.
Everything was difficult for the traveller in China in those days, despite the best efforts of the authorities. Getting a plane ticket could be difficult and passengers were sometimes unnerved to see the pilot getting into the corkpit in a singlet because of the heat. Whenever one encountered a problem, it never hurt to have a friend who knew a friend who worked in one of the responsible organisations concerned. The fact that we had produced the `ABC’ series of English teaching videotapes made us relatively well known in China, particularly in Guangdong in the South. One time I remember my brother in law managed to get a ticket on a plane with us – in a crew seat – simply because he was related to the producer of `ABC.’
Many things have changed since we first went to China. There has been one very interesting change in people’s behaviour in restaurants. In the early days, nothing would be left on the table. What the guests could not eat, they would take home in doggy bags. These days, it is almost mandatory to order too much and just leave it on the table as a show of wealth.
Television was at a very basic stage in China in those early days. At the time, China had a population of more than a billion but only 10 million TV sets, mostly brought in to the country by friends and relatives overseas.
That made their viewing habits quite different from other countries. Big groups of people would get together to watch a single black and white set in schools and community halls. People would sometimes pay to watch colour TV. There have been many TV sets but I would say nearly everyone watched TV if they could. Watches, brandy and cigarettes were favourite products to advertise in China.
Many of the goods we advertised were expensive in China, if they could be found at all. For most consumers, this meant they could only obtain the goods from friends and relatives abroad. So advertising was all about promoting the product’s image in anticipation of future sales.
Even before I started travelling to China in the 1970s I noticed competition was heating up among the foreign advertising companies active in China. They were all trying to win contracts with TV commercial placement agencies. At the same time, demand was growing overseas for commercial time on Chinese TV.
I clinched my first China advertising deal in April 1979. RCP, my company, became sole TV commercial placement agent for Guangdong TV. I took a great risk to secure that first deal. Peggy and I deposited HK$1 million (then about US$200,000) into a Chinese bank as a guarantee we could find at least that much advertising. Many companies including Hong Kong broadcasters wanted to become agents for Guangdong TV. I knew how competitive the situation was and I wanted the Chinese to see I could put my money where my mouth was, unlike the others. It was a huge amount of money at the time. I could have bought several apartments with it, but at the end of the year I had sold HK$950,000 worth of advertising. They repaid me the whole amount of my deposit, although they were not bound to by contract.
Next, we secured advertising time for Citizen Watch on Beijing’s China Central TV (CCTV.) We made other advertising deals with stations in other provinces: with GDTV in in Guangdong, Fujian TV, Henan TV, Sichuan TV and Guangxi TV.
I was just a small potato compared to the big international companies I was competing against in the China market. I think I succeeded because whereas the big companies went to China, their idea is to earn money by either selling foreign products directly into the China market or asking China to invest in overseas advertising campaigns. I worked from the other end, offering China the ability to generate foreign earnings. I tried to sell things for them, not to them. They get the benefits of the technology and knowledge associated with the deal. It has been a winning formula for me.
Early on, I saw the potential for business in the tourism sector in China. I realised that foreigners travelling in China needed a greater selection of entertainment in their hotels. I formed a new company, RCP China Entertainment and arranged to import video and pinball machines into China in the early 1980s. I equipped hotels from Guangzhou in the South to Shanghai in the North with these.
The Chuas with friends during their first China visit, April 1979
Robert received a souvenir banner from a Chinese TV official during a joint TV production
As an overseas chinese visitor, Peggy attracted attention, 1979
Peggy toasting a Chinese official, 1982
A Chinese group watching a TV show in Guangzhou, 1979
Robert Chua, speech to Entertainment and Media in Asia conference, Los Angeles, US, 1998.
Closed Circuit TV in the Guangzhou Express Train, 1980
The Chuas with a Fujian TV Official,1980
I am particularly proud of financing and arranging the first closed circuit TV to people travelling by train between Hong Kong and Guangzhou. It caused quite a sensation at the time because people just did not expect to find entertainment or infotainment when they travelled in China. The investment was recouped from advertising sold with the programs shown.
In 1981 I arranged and distributed China’s first hospitality magazine produced outside the country. It featured hotels and other tourism facilities in Shanghai and was published in cooperation with the Hong Kong’s main English language newspaper, the South China Morning Post.
Some of the China projects I have been involved with were outside the media business altogether. For example, my company became exclusive exporter from China for black silk, a product made from treating natural silk with traditional techniques. We rebranded this product Black Glazed Silk and it found a ready market around the world.
Everyone who has done business in China knows the difficulties and frustrations it can involve. I have personally been involved in many deals, including joint ventures over the years where we thought we had an agreement, only to see the deal evaporate for one reason or another. The most recent example is when I thought I had secured funding for CETV from a consortium of five Chinese companies which agreed to take an 80 per cent shareholding. Ultimately, these companies did not fulfil their financial commitments. I think this shows that anyone can be caught out in China, even someone like myself with years of experience of doing business there.
I believe the nature of the Chinese business scene has changed somewhat over the past 10 years. Connections, or Guanxi still count for a lot but often money politics can become mixed up in the equation.
In any case, the experience of CETV has added another feather to my cap in terms of China experience. There is nothing more memorable than a business deal which comes unstuck and I believe I have learned enough never to be caught out in a similar situation again. It was a very expensive experience and having survived it made me stronger.
Whenever I work as a consultant on China projects, I tell the prospective client what I think their real chances of success are right from the start, before accepting the job. I think this is far better for the client than offering false hope just to gain a monthly fee.
My wife Peggy has been a vital partner in my dealings with China. She helps me out a lot with language and a feminine touch can work wonders in negotiations.
She often reminds me of the seemingly little things which have turned out to be subtly important during the intricate moves and counter-moves involved in the Chinese negotiating process.
The Chuas with CCTV officials in Beijing,1980
Peggy with two Chinese friends,1982
Robert & Peggy with CETV viewers in Beijing, 1996