In 1842, the Opium War opened the gates of China to Western imperialism. While the war resulted in China parceling out land to the West, it also gave rise to intense nationalism, which came to play an important role in Chinese history.
Although times have changed significantly, Chinese nationalism is still deeply rooted and "nationality brands" (
It is worth noting that there are certain similarities between China's WTO entry and the opening of its gates over 150 years ago, and the question of whether these "nationality brands" on its market today will be able to resist attack from the US, Europe and Japan has recently become the focus of Chinese media speculation.
In reality, these "nationality brands" on the Chinese market do not necessarily mean the industries are being invested in or propped up by the government. Rather, it primarily refers to brands built with Chinese capital, or to brands manufactured in labor-intensive, government protected industries.
These brands or industries are seen by the Chinese consumer as glorious symbols of the "Made in China" label and they include the computer industry's Legend (
Looking at the opening up of different Chinese industries and markets, the logic is that the more competitive an industry is, the sooner it will be opened. Although China has already been a market economy for some time, the guiding thought that a certain key industry should be developed at a certain stage still prevails in Chinese policy making. Among the previously mentioned "nationality brands," only Legend and Haier have obtained a competitive advantage. Even though other industries have been heavily protected by the Chinese government, they have already become targets of the hungry glances of foreign companies due to the enormous size of the China market.
In the competition between these "nationality brands" and international brands, the Chinese nationality brands in traditional industries will probably be faced with a hard fight, the main factors being that Chinese companies generally lack organization and that their marketing concepts revolve around manufacturing, to the neglect of product distribution and customer service.
The problem is more serious in industries operated by state-owned enterprises. Apart from the above-mentioned factors, a lack of clear property rights and the inability of corporate bodies to make their own decisions (what the Chinese media calls "state-owned enterprise sickness") are dealing fatal blows to business development.
The war between the Chinese "nationality brand" Lekai Film (
The existence of these "nationality brands," however, shows that there is a certain "national mobilization" complex behind them. In the 1980s, the Chinese portable computer market was the playground of Compaq, but because Legend was propped up by the Chinese government, Legend computers soared to overtake Compaq.
China's telecommunications market, however, greedily watched by many foreign investors, could become the battleground for a repeat of the Legend versus Compaq war. Even though the Chinese telecom market is the second largest in the world, it is still being monopolized by companies under the Ministry of Information Industry (
In preparation for China's accession to the WTO, foreign brands are investing large sums in China in hopes of taking over the telecom market. During this process, foreign companies have discovered that some of their efforts to cooperate with China's telecommunications companies have been rejected, due to the rejection of the Ministry of Information Industry itself. The lack of a rule of law and a situation in which everything is decided by the bureaucracy, have become the greatest worries for foreign firms investing in China.
Even though China will inevitably expand its ratio of foreign investment in the communications industry after its accession, the Chinese government's indecision on the implementation of concrete policies will only create serious problems for foreign companies, especially since the Chinese government also encourages the development of Chinese communications companies. Whether the Chinese government in this situation will thoroughly implement its WTO agreement has become the biggest question in the minds of foreign-invested communications companies.
Apart from the need for consumer identification of "nationality brands," government policy-making and implementation is of great importance to the "nationality brands." Under the "rising technological nation" policies extolled by the Chinese government, the hi-tech and telecommunications industries are considered industries that should receive strong government protection.
Will the Chinese government choose WTO rules or national dignity? Will the result be a new Qing empire of 1842, or a reconstruction of the "New China?" Maybe the answers to these questions will affect the ultimate fate of the "nationality brands."
Hsu Tung-ming is a freelance writer based in Beijing.
Translated by Perry Svensson
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