“There are two realities: the reality that exists and the reality that is perceived.”

By Ruoyi Pan、Mingyu Wang and Lechi Zhang

Why should we care about national image? National image is not only an abstract concept, but it impacts how businesses operate overseas, where you can go to visit, what and how news is reported, and it even affects how you introduce yourself to your foreign friends. More specifically, in June of 2020, after several months under isolation due to the pandemic originated from China, a hashtag #Chinazi started trending again in the US, and the rest of the world (see fig 1).

Amid the COVID-19 pandemic, recent PEW research found rising unfavorable views of China reach historical high and much criticism of China’s handling of the pandemic (fig 2), but does perception equal reality?

What is the significance of national (including countries and states) image, and how is it created, and what could be done to build or change it? To answer these questions, we will compare Estonia’s national image, which has been regarded as a successful example of complex country branding, and China, which has recently suffered from unfavorable international reputations. This article will explore how business, tourism, and media shape a country’s perceived reality and how to build a realistic and positive image promoting international cooperation.

Business image needs coherent communication and consistent policies.

Business and trade are crucial to how people perceive a country, shaping people’s perception of a nation. Estonia has been building the image of a pioneer in digitization, and the business sector is integral to this success. A comparison between China and Estonia’s nation branding sheds light on the importance of communication plans and consistent policies.

China and Estonia face different challenges when branding their economic power. There are two key interrelated disparities between them: the size of its economy and the branding’s timing. China faces the challenge of mobilizing its economic resources first before moving to efficiently using its resources, whereas, for Estonia, there is a strong need to gain international recognition. A brand or label can “help place a country like Estonia on the map and, over time, raise its awareness levels and international status through soft power.

Economic Sizelarge domestic economy (large demand condition)relative small domestic economy  (less domestic demand)
Labor Force Sizelarge labor forcerelative small labor force
Branding Challenegeslikely to be viewed as a threatharder to build international reputation
Current Stage of Brandingalready established foreign direct investments (FDI)introducing Estonia to the world
Table 1: a comparison between challenges faced by China and Estonia

The disparities in economic powers and challenges between China and Estonia (see Table 1) suggests different approaches to nation branding. Since independence, Estonia developed a national image of digitization by adopting an e-governance system in 2000, introducing digital ID in 2002 (see Fig. 3), and enacted the Telecommunications Act that declared internet access as a human right. Estonia faced the challenge of efficiently and strategically use its resources, particularly human resources, whereas as an enormous economic power, China has to avoid being viewed as a threat. However, it is more challenging for Estonia to announce its presence in the world, given its relative size and influence.

China and Estonia are at different stages of branding themselves to the world. On the one hand, Estonia is at the initial stage of introducing themselves to the world and building an image. According to Daniel Schear, Estonian Commissioner General for EXPO 2020, Estonia will be presenting itself at the World EXPO 2020 and showing its specialization to build a positive image. On the other hand, China is beyond the stage of introducing themselves to the world. China already has 158,300 million USD of outward FDI in 2017. Chinese businesses confront the challenge of the negative perception of China, evidence by the difficulties for Chinese firms to operate overseas. For 23 consecutive years, Chinese firms have been the top subject of anti-dumping investigations, and suffer from below world average success rate of oversea acquisitions, although we recognize many other obstacles on top of a general image.

Through the above analysis, one could conclude that China and Estonia are very different, and they should use different strategies and tactics in nation branding. Nevertheless, China and Estonia can still learn from each other on how they are perceived through the lens of business.

Creating a positive and realistic image requires both short-term and long-term planning, including a coherent communication plan and policy strategies. First, a communication plan needs coherent and consistent messaging that highlights the comparative advantages and yet does not threaten other economic powers, such as Estonia’s consistent message of its advancement on digitization (see Fig. 4).

Fig. 4: E-estonian website showcasing digitization achievements of Estonia

Second, similar to marketing strategies for firms, nations need to differentiate and position themselves. Estonia has strategically positioned itself as an emerging European nation specializing in digitization, earning the reputation of tech-savvy and creative, which differentiates itself from other former Soviet republics. This positioning of Estonia attracts entrepreneurs as well as investors to Estonia. Third, the communication plan needs to include multiple outlet channels, which require collaboration between the private sector with the public sector to present a consistent message. For example, in Estonia, digitization not only flourished in the private sector but also advanced the public sector through e-governance (see Fig.5).

Aside from communication plans, another crucial piece of national image is long term and consistent business-friendly policies. In Estonia’s case, friendly policies of easy registration, no restriction on ownerships, and low corporate tax attracted many foreign entrepreneurs, including founders of the Estonian icon, Skype.

Furthermore, business and the perception of a country are mutually constructive and causal. A country’s positive image provides more businesses and trade opportunities, and good business practices promote a positive image of the country.

“Just imagine that every time you use Skype you see that it has Estonian origins – it would increase awareness regarding Estonia and develop the image of the country, adding to the communication of the E-Estonia message.” — PAPP-VÁRY

From the perspective of individual businesses, their success story brings positive connotations to the country of origin. Businesses that engage more with the local community and launch good public initiatives will build a more positive image of the firm and the country of origin. For example, Huawei, a Chinese tech multi-national corporation (MNC), launched the DigiSchool project in South Africa, and Technology-enabled Open Schools with United Nations Educational, Scientific, and Cultural Organization (UNESCO). In contrast, self-contained firms are more likely to suffer from the liability of foreignness and promote a more negative image of the country because the lack of communication contributes to cultural and understanding barriers. Local engagement is a crucial lesson for prospective Estonian MCNs to work overseas.

Fig 6: Huawei’s DigiSchool project in South Africa

National image is an end result of long-time interactions. A better national image provides a more conducive environment for international business. Therefore, the public and private sectors have a convergence of interests in building a positive and realistic national image. Learning from Estonian’s experience, China can benefit from establishing coherent messaging, adopt consistent business-friendly policies; and China provides experience in local engagements for prospective Estonian MNCs.

Tourism exhibits the authentic image of a country

Tourism is significant for a country as it could help display the national image, boost economic growth, and exhibit the culture and history as soft power. In recent years, the overall development of the tourism industry in Estonia has shown an upward trend. From the below graph, it shows that tourists are willing to spend more time visiting Estonia. 

In the development of the tourism industry in Estonia, the government organized and formed affiliated companies to help Estonia promote tourism development. Through attending some international conferences, Estonia has demonstrated itself well in such processes and has improved its national image. A non-profit organization like the Estonian Tourist Board (ETB), established jointly by the public and private sectors, also assisted in Estonia’s tourism industry’s booming.  According to OECD Tourism Trends and Policies 2014, ETB works with interested businesses and companies, and its products and services add value to the Estonian image building.

The establishment of an excellent national image requires a country to show its authentic side. Through government policies, Estonia’s tourism industry has promoted opportunities for exchanges between locals and tourists in Estonia.  Estonia utilized the opportunity of tourism to fully demonstrated the authentic life of Estonia to the world. The cultural and life exchanges promoted closer ties between Estonia and the outside world. 

Estonia’s hotel and airline industry attracts both the tourists and local business. The competitive advantage to travel to Estnoia is the cheap flight ticket comparing with the nearby Eruopean countries. Furtheremore, Estonian hotel industry benefited from the same taxation rate policy from the local government, making Estonian tourism highly competitive in the Baltic region.

These beneficial policies lead the toursim in Estonia in a better development. According to the article Regulations bring Tallinn better image, more spend, there has been a trend in Estonian tourism recently that people are willing to come back more often to Estonia after a first-time visit.

As for China, it has a different approach when addressing issues in tourism, especially under the consideration of security. Specifically,  according to the “Law of the People’s Republic of China on the Administration of the Entry and Exit of Foreigners” issued by the State Council of China, foreigners staying in hotels, restaurants, inns, guest houses, schools and other enterprises, institutions or agencies, organizations and other Chinese institutions shall present a valid passport or residence permit. Foreign visitors are also restricted from staying in hotels below four stars.  Specifically, the regulation specifies that some cities and counties are not open to foreign tourists, and foreigners need to present their passport, related paperwork, and filling out a travel application to travel to these places. These regulations may be counterproductive in creating an immersive experience for foreign tourists and even discourage some tourists from traveling to China. Although the consideration of national security is absolutely necessary, such a policy may hinder the tourism development of some areas in China for they cannot receive diversified tourists from abroad. Therefore, it is difficult to present a diversified and comprehensive. of China to foreign tourists, including the image of rural life, farmhouse culture, and possibly other Chinese cultural landscapes.

Fig 10: Typical Farmhouse in China

Tourism is an excellent channel to exhibit the image of a country, and it allows tourists to come and experience the real life of a country in person. Demonstrating authenticity is an essential factor for a country to enhance its international image. Estonia has been working hard to bring authenticity to the world under both government and local people’s efforts, while China is taking a somewhat different approach for various political and economic situations of the two countries. Admittedly, National security is an unavoidable factor that needs to be considered. The side effect is that it restricts people’s experience of real-life in China. The path to improve China’s national image may involve experimenting with different approaches to welcoming foreign tourists, in order to present a comprehensive and realistic image of China.

Openness in media being key to nation branding

Business and tourism reinforce a perceived image and also benefits from a positive national image. However, a successful nation branding also relies on use of the media. Why is media so important? As Bolin and Stahlberg claimed in Mediating the Nation-State: Agency and The Media in Nation-Branding Campaigns, media works as an agent or platform in the process of nation branding. Four players of the media world are government agencies, brand consultant/ professional agencies, business corporate, and media corporations, being both the platform and players.

Fig 11: illustration of four players of the media world

How do the players above affect the success of a country branding? We may take Estonian’s journey as an example.

The first step Estonia took is to adopt a commercial language, expectation, and practice. It means that, rather than dull and hollow statements on ideology or abstract policy, the government should first adopt a style more easily approachable and then work with the media agencies. As in Estonian’s case, shortly after its independence from USSR, they came up with a series of message campaigns to reintroduce themselves to the world, which later became a decades-long triumph of campaigns. The three messages are:” We are here!” “We are normal!” and “We are special!”. The messages are simple enough for it to transmit widely while progressively fitting the country’s specialty in different stages.

Table 2: Estonia’s different message in different phase

In its second step, as is introduced by Keith Dinnie in his book Nation Branding

Concepts, Issues, Practice, Estonia conducted a wide range of survey, interview, and conference among different agencies and stakeholders, including the country’s Ministry of Tourism and Ministry of Culture, opinion leaders from various industries and fields of expertise, and even foreign tourists and business owners in order to find a clear image on what the world thinks of them right now, what image will benefit them the most, what will be the image they take. By finishing these two steps, Estonia successfully fulfilled the role of government as a player in the media platform.

After that, Estonia commissioned different professional branding/ PR agencies, fulfilling the image the public chose and the position the people of the country want. Such approaches include campaigns on tourism, culture, and specialty of the country. The ultimate goal is to get the message out to the outside world of the country’s specialty.

As for Estonia, the image they choose is to be a European nation rather than a Baltic nation. To accomplish its goal, they commissioned the job to a British consulting company named Interbrand. Interbrand conducted a series of campaigns, emphasizing Estonia’s connection to Europe rather than to the Baltic nations while disconnecting any possible affiliation with the Soviet Union. The effort of Interbrand earned Estonia the privilege to hold the Eurovision Song Contest in 2002. Despite the fact that Estonia commissioned different companies later, this effective pattern of cooperation has stayed.

The last step is for the government to take efficient measures, like reformation and new policies, to live up to the brand it chooses. According to Papp-Váry, Estonia became the digital center of Europe and the digital center for NATO by investing the initial profit into stimulating policies in tech industries, reinforcing its benefit.

Comparing the approaches China took, we may find a similar pattern. China, too, adopted such strategies. As Ding shared in his paper, China has been putting great effort into improving its national image under its unique system for decades: in the 1970s, all public servants dealing with foreign affairs take special linguistic and professional training; starting from the 21st centuries, China has also been working with the professional brand consultant, foreign media, and lobbyists, and these efforts indeed yield periodic success: the population percentage of being” favorable” of China rises from 30% to 70% in 1980s; more than 2300 universities of 100 countries have China culture center by 2007.

However, there are a few pieces of branding strategy that would have sustained the growth. One of them is the lack of experience in dealing with the PR crisis. In recent years, there has always been negative chanting regarding Xinjiang and Tibet when it comes to China, even during the terrorist attack in Kunming in 2014. Usually, the best time to tell your side of a story is when you have the world’s attention on the issue. Timely communication and disclosing information are crucial to building public confidence. A lack of communication could breed misinformation. It takes a couple of years for Chinese media to produce a comprehensive documentary (Tianshan Still Standing) in 2020, telling the other side of the story on counter terrorism, although there was a documentary in 2017 named Xinjiang on the cultural heritage and history. More active engagements with public opinion like the  Tianshan Still Standing documentary by the Chinese media indicate that the sector is learning from past experiences and open to more disclosing information and telling their stories.

However, one should note that the issue of Xinjiang and Tibet is extremely complicated involving national security, population demographics, racial relations, cultural identities, and balancing of policies. Public crisis management is only part of this complex dynamics.

Fig 13: Tianshan still standing, Chinese documentary of Xinjiang

In essence, the success of nation branding lies in the openness of the country. China has been making significant progress in improving its openness, including having institutional press conferences and lifting restrictions on foreign press, all reflecting on China’s national image. Continuous efforts of openness in media would help promote cross-culture understanding, create a more comprehensive national image of China.

What can we do to make a difference?

We live in a cosmopolitan world that every nation, large or small, has its unique position and their ways of living and thinking. In the age of globalization, we all have to encounter our differences and disagreements. The perceived image of others is ultimately how one country compares another with its own culture and value. Only after recognizing the differences between reality and perception can we be open to the diverse, complex, and truthful national image and understand our bias and discriminations. That requires both careful and open communication, while accepting the differences in culture, history, and values in between countries.

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