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Cultural differences ‘overrated’ as obstacle to US-China relations: Yum China CEO

·4-min read
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Reports of anti-Asian incidents that happened in the U.S. over the past year nearly doubled in March alone, as ongoing bigotry and increased awareness brought a flood of testimony, according to data released by advocacy group Stop AAPI Hate this month. 

The surge in anti-Asian harassment during the coronavirus pandemic has coincided with a massive shift in negative U.S. sentiment toward China. A Gallup poll conducted in February found that 45% of Americans consider China the nation's greatest enemy, compared to 22% who thought so a year prior.

Despite this rise in tension, Yum China (YUMC) CEO Joey Wat downplayed the role that cultural differences on either side play in scuttling positive relations between the U.S. and China. 

Speaking to Yahoo Finance, she called the cultural divide "a bit overrated" as an impediment to a mutually beneficial relationship, and said she's optimistic that people in both countries can find "common sense" in how they perceive one another.

Yum China, one of the country's largest restaurant companies, oversees nearly 11,000 coffee shops and restaurants nationwide, including brands like KFC, Pizza Hut, and Taco Bell.

"I do believe sometimes cultural difference is a bit overrated," Wat told Yahoo Finance Editor-in-Chief Andy Serwer in an episode of "Influencers with Andy Serwer." "Because I do see the possibility, and the opportunity. When we try to understand it better, we can find common sense."

BOAO, CHINA - APRIL 10:  Joey Wat, Chief Executive Officer of Yum China Holdings, Inc., speaks during a session at the Boao Forum for Asia Annual Conference 2018 on April 10, 2018 in Boao, China. The Boao Forum for Asia Annual Conference 2018 will be held on April 8-11 in Boao.  (Photo by Visual China Group via Getty Images/Visual China Group via Getty Images)
Joey Wat, Chief Executive Officer of Yum China Holdings, Inc., speaks during a session at the Boao Forum for Asia Annual Conference 2018 on April 10, 2018 in Boao, China. (Photo by Visual China Group via Getty Images)

Wat, who was born in Southeast China and grew up in Hong Kong, drew on her background living and working in the West. 

She came to the U.S. in the late 1990s to earn an MBA from Northwestern University's Kellogg School of Business, in Chicago; and beginning in 2004, she spent 10 years working in England for health and beauty retailer A.S. Watson Group.

"What I call the best British virtue is common sense," she says. "We all have common sense, because we're all very intelligent people. So the cultural difference is just one layer."

"But if we go deeper, then we can find a common ground," she adds. "So, I'm optimistic."

To be sure, sentiment in China toward the United States also appears to have worsened during China's coronavirus outbreak. Measured on a scale from 1 to 10, average favorability toward the U.S. dropped from 5.77 in June 2019 to 4.77 in May 2020, according to a poll from the China Data Lab at the University of California San Diego's School of Global Policy and Strategy.

The rise of negative sentiment in the U.S. and China toward one another over the past year has coincided with confrontational stances from leaders in both countries. Relations between the two countries became increasingly combative before the pandemic, especially after a trade war initiated by former president Donald Trump in 2018.

Last month, Chinese President Xi Jinping took an emboldened posture toward the U.S. Speaking to a virtual gathering of leaders in business and government at the Boao Forum for Asia, he warned: “Bossing others around and interfering in other countries’ internal affairs will not be well received.” 

While Xi did not mention the U.S. by name, the remark was widely perceived to be directed at the country.

Meanwhile, President Joe Biden has struck a firm but measured tone toward China, acknowledging economic and diplomatic challenges posed by the country while avoiding sharply inflammatory rhetoric. The approach marks a departure from former President Donald Trump, who repeatedly blamed the coronavirus outbreak on China, referring disparagingly to the disease as the "China virus." 

Photo by: John Nacion/STAR MAX/IPx 2021 3/19/21 Peace Vigil for victims of Asian Hate at Union Square in New York City.
Photo by: John Nacion/STAR MAX/IPx 2021 3/19/21 Peace Vigil for victims of Asian Hate at Union Square in New York City.

Some researchers have linked Trump's rhetoric to a rise in anti-Asian sentiment online. A tweet from Trump last year about the "China virus" prompted a spike in coronavirus-related tweets with anti-Asian hashtags over the subsequent week, according to a study released by the University of California, San Francisco in March that examined about 700,000 tweets.

Trump has continued to use the phrase "China virus" since leaving office, most recently in a blog post last month.

To focus on the Chinese market, Yum China spun off from its American parent company Yum! Brands (YUM) in 2016. Reiterating her hope for better diplomatic relations between the two countries, Wat said improved communication would allow Yum China to operate more effectively.

"From a business point of view, as a company operating in China, we certainly want to see a bit more clarity and also more communications between the two countries," Wat says.

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