On the Fortune Global Top 500 list of the world's biggest companies, more and more Chinese names are appearing each year. Yet the Interbrand Top 1000 list of leading brands still does not feature a single Chinese name. How much progress has the Chinese economy really made? In addition to being the workshop of the world, can China become a country that produces its own brands?
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Anyone who takes a stroll down Wangfujing, Beijing's main shopping street, would be forgiven for thinking that China's economic development is complete. Pristine shopping malls are packed with popular stores, stylish ads on giant screens extol the virtues of the latest products and hordes of China's young and beautiful give the impression that they have embraced shopping as their favourite pastime.
Yet amid the bright, pulsating ads for Philips, Louis Vuitton, Nikon, McDonalds and Samsung, there's something missing: where are the leading Chinese brands?
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At one of Beijing's most luxurious hotels, just around the corner from Wangfujing, I met up with Liu Baocheng, Professor of Marketing at the University for International Business and Economics in Beijing and also the owner of a marketing advice agency.
He draws parallels between brand development and personal growth.
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At full tilt
The first area of the economy, production, is running at full tilt in China. As anyone who reads the labels on their clothing will know, virtually everything we wear and use is now 'Made in China'.
Maaike Tjebbes is a Dutch businesswoman who is responsible for having products for Western companies made in Chinese factories. I met up with her as she visited a factory that makes wood plastic composite (WPC) for Western manufacturers of garden furniture.
The factory was a hive of activity and noise, with machines mixing the wood and plastic fibres and pressing them into planks, then plank after plank falling onto a conveyor belt at the end of the machine, making an almighty noise in the process.
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But for some time now, Maaike explains, the factory's activities have been going beyond production to include research. "WPC is a relatively new product, with plenty of scope for development. Experiments with WPC are also being carried out in Europe and the US. But in this field, China is already well able to compete with the West. There are enough people of the right calibre to carry out the research, so ultimately it all comes down to price. And China can conduct the research much more cheaply than the West."
However, she still takes care of the appearance of her products herself, both packaging and branding.
"When my products leave the factory, they are not suitable for export. Mostly, this has to do with the look of the products: the surface finishing and the packaging. These are aspects the Chinese are not able to adapt to Western tastes."|
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Maaike Tjebbes blames this on lack of knowledge about other countries. "The bosses here are smart and they know what they are doing. But they've never been over the border and I don't see that happening any time in the next five years. This means they have absolutely no idea how we live. And without that knowledge, you can't produce products for our market."
Liu Baocheng believes that lack of knowledge about other countries is only part of the story. It is also a lack of style and creativity. He puts this down to a poor education system that is not in step with the modern world.
"Students learn to follow, instead of to create. They learn how to obey, instead of how to innovate. Education is now the biggest bottleneck in our economic development."Yet Professor Liu has hope that the new generation will have the wherewithal to compensate for these deficiencies, by travelling and being educated abroad for example. As he sees it, China's economic advance cannot be stopped:
"Give China another ten years and you will see a good many Chinese brands in the Netherlands."* RNW translation (dd)
Tags: Brandnames, Brands, Chinese economy, Chinese education, Economic development, Fortune Global Top 500