This is China! blog

A British friend who works at a European lifestyle luxury brand maker in China told me how sales for their top of the line wares are not taking off the way they are in other countries in the Asia-Pacific region. Sales have been through the roof in South Korea, Japan and Thailand. China, though, is so-so.

“The problem,” my friend told me, “is the Chinese with money read the label and see ‘Made in China’. If they’ve already bought one of our products, they return it; if they haven’t bought it yet, they return it to the shelf.

“They simply don’t trust the quality of products made in China, and don’t understand how something made in China could be so expensive.” My friend went on to tell me that despite the designs being cutting edge and the highest quality fabrics used in clothing lines and the best materials in their appliances, the company is struggling to reach the sort of tipping point in purchases amongst China’s nouveau riche as they have in other Asian countries.

As I write in my upcoming book (Wiley & Sons, due out early summer 2012), “China Fast Forward: A Blueprint of the Technologies, Green Industries and Innovations Driving China’s Future”, Brand China has come to be associated in international markets with cheap, chintzy and unaccountable. Apparently, the Chinese think so, too.

I write in “China Fast Forward” how the most successful Chinese companies seeking their fortune in overseas markets actually remake their Made In China image into something Western, international-sounding, and bland; that is, innocuous. Others want to associate themselves with a strong Western national-brand image.

The Financial Times recently published an article about the growing haute couture business in China. Now, some high end domestic products aspiring brand-hood are designing clothes in Shanghai and having them manufactured in Italy. Just so they can have attached to them the Made in Italy label, with all the sense of style and attention to detail the image entails.

Of course, we don’t know where in Italy these wares are manufactured. An Italian neighbor of mine in China told me there are villages in Italy whose economies have been based for centuries in textile manufacture. “Now,” she told me, “there are more Chinese than locals in many of these villages.”

National brands in these days of global supply chains just aren’t what they used to be.

Technorati Tags: china, globalization, haute couture, made in china

I’ve just returned from week on business to India. I gained several deeply etched impressions:

1. I was absolutely ecstatic to return to China. Relatively speaking, it was clean, orderly and safe. It was nice being home.

2. India is full of a dizzying array of economic opportunities and will continue to have so for a long time to come, mostly because of government gerrymandering and malfeasance.

3. I have never met so many pleasant, intelligent and imaginative people as in India.

4. The Indian government’s lack of will in bringing even the rudiments of sanitation, infrastructure and utilities to its people after all this time is criminal, given the energy and initiative of its people.

6. Any competition the media promotes between the economic development of China and India is bogus. There is not and never will be competition until the Indian government truly shows its concern for its citizens by building basic infrastructure for ALL to access, no matter the socioeconomic level.

7. Despite transgressions against human rights and corruption on a systemic scale in China, at least things have gotten done and the quality of life for most of the country’s citizens is far beyond what it was twenty years ago. Now when I encounter a frustration in China, I mutter to myself, “At least it’s getting done”.

I look forward one day to saying as much about India.

Technorati Tags: economic trends, social trends

My (Chinese) wife eagerly pointed at the leather bag on the sofa in our living room. The pattern on the over-sized purse was a soup of multi-colored D&Gs jostling against one another like microbes in a petri dish washed with the blandest agar. If my wife hadn’t pointed the bag out to me as I was on the way out the door I wouldn’t have spotted it on the neutral fabric of the couch.

She said conspiratorially, “That’s the ayi’s bag. Do you know how much it cost?” Our ayi comes in three mornings a week to help with the cleaning. My wife giggled at the prospect I’d guess very wrong.” I shrugged. It was an ugly handbag and I didn’t much care our housekeeper had blown a month’s salary on fake couture. Besides, I was late getting out the door.

“It cost more than 10,000 rmb,” she announced. 10,000 rmb is nearly US$2,000. I frowned. I’m used to her conjectures, mostly deigned from the neighbors, the local television news and internet forums. “Impossible. It’s fake,” I retorted, hurriedly slipping my shoes on. Besides, the ayi, a young woman, was more disposed to wearing jeans and sneakers than touting haute couture.

She shook her head, smiled broadly. “It’s not fake, it’s real,” she said with genuine excitement. “One of the people the ayi works for gave it to her.”

“Gave it to her?” I said irritably, “Why would someone give the ayi an expensive purse?” It also bothered me the confounded thing was so ugly, in a baroque, ostentaious sort of way. It rubbed against my sense elegant simplicity – not that I’m either.

My wife said excitedly,” The woman who the ayi works for has a rich boyfriend. The man is already married, and has a lot of money, the ayi told me. He bought an apartment for the woman. He gave the woman the purse as a gift. The woman said it was ugly, and gave it to the ayi.” I could believe someone else thought the bag unattractive.

I nodded, paused a moment. At least the story made sense, given what I’d heard about the spending habits of the nouveu riche in China. Certain circles of society in today’s China are awash with so much money men can afford second wives and hideous bags that are hideously expensive.

The woman was likely annoyed at the man – probably bacause he also had to pay attention to business and to his wife – and was so spoiled she thought nothing of giving the bag to an ayi. I’m sure she was looking forward to replying to the man when he would one evening ask, “Why don’t you ever bring that purse along that I bought you? You know the one: that lovely Dolce & Gabana bag.”

Then she would respond, “Oh, I have too many purses; I gave it to the ayi.”

“You what?!” he’d splutter, spitting out his Cuban cigar.

She would flash a faint smile.

Ah, love in the fast lane.

Technorati Tags: china, middle class

Technorati Tags: chinese middle class, globalization

The Financial Times recently published an article on “luoci”, in which Chinese employees suddenly quit their jobs for lifestyle reasons. The article reminded me of a conversation I had a few days ago with a professional Chinese woman name Lucy.

Lucy is in her mid-thirties. She was planning on going on a retreat to a Buddhist temple. Feeling stuck in her career and stuck in her marriage, she was on a quest to find out what she really wanted. Her husband thinks she’s nuts, as her career and her “job” at home taking care of their son should be enough.

Her mother thinks it’s inappropriate for her daughter to be studying to improve herself: a mother and wife’s role revolves around the household. ”It’s ok to have a job,” Lucy explained about her mother’s sentiment, “it’s just not alright to know to much about yourself.

A Western plant manager in Suzhou told me a couple days ago one of the company’s staff tried to commit suicide on the factory site. The friend said the young woman had tried to jump out the fourth floor window of the ladies room.

Another staff worker had caught the would-be jumper by the ankle as the young lady tumbled out the window. Other women helped haul the woman inside. The plant manager soon arrived on the scene. He said the woman was shaking violently.

She was still focused on the window from which she had just been pulled. She still seemed intent on dashing her head on the sidewalk beloe. I asked my friend if he had any idea why the woman wanted to kill herself.

Revelations come in all sorts of packages here in China. The latest one for me had absolutely nothing to do with business, but with family: the Chinese family and its militant emphasis on education. The very American Tiger Mother would have us believe that all Asians revel in straight-jacketing their children so they will attain a social stratum that will bring great adulation to family elders.

A recent coffee break with a Chinese mother named Mimi led me to understand there is a nascent trend among Chinese parents to the contrary.

Mimi’s ten year old son is – how to put it delicately – average. Of course, to his mother, he’s precious; but to his teachers at school his scores are abysmally second-rate – and therefore he is second-rate, too. Mimi is a very mature and dignified manager of a foreign firm with offices in China. She is in her mid-thirties. Mimi sees her ten year old son suffering within an education system that emphasizes rote learning and endless memorization over creativity and initiative.

Her son developed a low opinion of himself, as a result. Mimi explained to me, “Chinese people at an individual level do not really know what they want. Their entire lives they are told what to think, what to say, what to desire.” Last year, though, Mimi decided to get to the bottom of herself., of her own values and desires.

For several months Mimi has been attending an evening program led by a Chinese woman that helps parents re-evaluate their lives, learn what’s really important to them, and basically realize there’s more to their lives than meeting the expectations of others. About sixty adults participate in the program, she told me. During the late winter last year she took her son to a camp on the island of Hainan where mother and son could get to know each other better and he could explore parts of his personality and expression he never knew he had.

“He was very happy to discover that he could contribute things to the children in his group that none of them could. We had a wonderful time together,” she told me. I asked her what her husband thought of her efforts.

“Well, he doesn’t criticize me, but he doesnt’ participate, either.” She explained to me, “Chinese fathers believe they have nothing to improve in themselves. Whatever they learned from their fathers was good enough for them.” She told me 90-percent of the participants in the relationship programs are women. “Chinese men,” she said, “believe the child’s education is the mother’s responsibility.”

Thank goodness for little Zhou.

David Pilling writes in his column in the Financial Times about the confusion China’s policy of “non-interference” in the affairs of nations – including its own – is beginning to create both at home and abroad. It’s workers in other lands are increasingly becoming marks for disgruntled guerrilla fighters, greedy warlords and merciless pirates. Keeping out of the domestic frays that are typically the cause of the seizures is becoming difficult for China’s leadership. One day, the country may just have to send in the marines, as an increasingly vocal citizenry is demanding.

Life outside the Great Firewall is about to become a lot more complicated than two thousand years of collecting tribute from neighbors ever prepared it for.

Technorati Tags: globalization

The recent squabbles between Hong Kong citizens and mainland political and media commentators reminds me of a story a Hong Kong lady told me about what angers HK people so much about their over-bearing cousin. The Wall Street Journal has written several articles about the incidents, which seem so far to have been more vocal than violent. Of late, protesting Hong Kong residents are raising placards branding the Mainlanders visiting HK as locusts.

The Hong Kong woman told me that Mainlanders gather at any of a handful of towns at MTR metro stations on the Mainland side of the border. The MTR is the Hong-Kong company that runs the city’s subway system. Just after their water has broken, and while in labor, the Mainland mothers-to-be rush to the metro line to the emergency rooms of hospitals on the HK side of the border. Talk about an uncomfortable – and possibly, unsightly – ride for other passengers on the unfortunate carriage. The emergency rooms of publicly funded hospitals are obligated to accept all-comers. The result for the newborn? Instant HK passport, education and social services.

Private HK clinics are not so keen to see the flow of Mainland birthing-tourists restricted, as they apparently make a huge amount of money from the business, according to the woman. Still, it’s the social welfare that finds itself under yet more pressure with each additional birth from a Mainlander, whether the infant is born in a public hospital or private clinic.

Locusts should be so clever.

The Zhejiang city of Wenzhou has been having a bad run in the media lately, both domestic and international. ‘Wenzhou has the reputation in China of having been first and most successful out the gate when economic liberalization began thirty years ago, and of having the most millionaires per capita of any city in China that makes cheap stuff like plastic cigarette lighters, of which the city has some 80-percent of the world market sewn up, or some such. It’s fortune seems to be waning, however.

Most recently, a Jiangxi-born businessman based in Wenzhou jilted his workers of their wages, selling the factory’s equipment one evening and escaping with his girlfriend to his hometown in Jiangxi. It’s unclear whether his girlfriend was also from Jiangxi. The workers called the cops, who quickly caught up with him, according to the China Daily. As early as the end of the summer, according to the Wall Street Journal, Wenzhou companies were suffering from a dearth of lending from the national banks as Beijing continued to tighten lending to curb inflation in the country. Dozens of businesses have been closing, ever since. The problem has only been exacerbated as material inputs have increased, salary pressures have been eating away at profit margins and buyers in the West are unable to buy more stuff because of the global economic slowdown. Wenzhou has been fertile ground for a vast shadow banking system that profits from illegal loans to local businessmen, according to the Financial Times. Some Wenzhounese, though, tried to cheat their way through the bad times, but recently found out crime doesn’t pay.

Sixteen Wenzhou executives, ten local government officials and eleven others were found guilty last week “for graft, embezzlement, illegal distribution of State assets and bribery”, according to another China Daily report:

Ying Guoquan, a founder and former president of Wenzhou Cailanzi Group, was allegedly involved in graft, embezzlement, illegal distribution of State-owned assets and bribery, involving more than 400 million yuan ($63 million). Wenzhou Cailanzi Group is the largest enterprise for food production and processing in the city, supplying 98 percent of the vegetables, 80 percent of the soybean products and 60 percent of the seafood, according to the group’s official website.

The most remarkable aspect of the case, according to the China Daily article, was that, “The corruption case at Wenzhou Cailanzi Group was the most serious of its kind in the city in the past two years, according to Xinhua News Agency.”

Just goes to show, two years in China can feel like forever.