China needs brands<\/title>\n<meta name=\"description\" content=\"OK, maybe China won't bury us economically after all: Quick: Think of a Chinese brand name. Japan has Sony. Mexico has Corona. Germany has BMW. South\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.patheos.com\/blogs\/geneveith\/2010\/05\/china-needs-brands\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"China needs brands\" \/>\n<meta property=\"og:description\" content=\"OK, maybe China won't bury us economically after all: Quick: Think of a Chinese brand name. Japan has Sony. Mexico has Corona. Germany has BMW. 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Japan has Sony. Mexico has Corona. Germany has BMW. South Korea? Samsung.<\/p>\n

If you\u2019re stumped, you\u2019re not alone. And for China, that is an enormous problem.<\/p>\n

Last year, China overtook Germany to become the world\u2019s largest exporter, and this year it could surpass Japan as the world\u2019s No. 2 economy. But as China gains international heft, its lack of global brands threatens its dream of becoming a superpower.<\/p>\n

No big marquee brands means China is stuck doing the global grunt work in factory cities while designers and engineers overseas reap the profits. Much of Apple\u2019s iPhone, for example, is made in China. But if a high-end version costs $750, China is lucky to hold on to $25. For a pair of Nikes, it\u2019s four pennies on the dollar.<\/p>\n

\u201cWe\u2019ve lost a bucketload of money to foreigners because they have brands and we don\u2019t,\u201d complained Fan Chunyong, the secretary general of the China Industrial Overseas Development and Planning Association. \u201cOur clothes are Italian, French, German, so the profits are all leaving China. . . . We need to create brands, and fast.\u201d<\/p>\n

\nThe problem is exacerbated by China\u2019s lack of successful innovation and its reliance on stitching and welding together products that are imagined, invented and designed by others. A failure to innovate means China is trapped paying enormous amounts in patent royalties and licensing fees to foreigners who are.\n

China\u2019s government has responded in typically lavish fashion, launching a multibillion-dollar effort to create brands, encourage innovation and protect its market from foreign domination.<\/p>\n

Through tax breaks and subsidies, China has embraced what it calls \u201ca going-out strategy,\u201d backing firms seeking to buy foreign businesses, snap up natural resources or expand their footprint overseas.<\/p>\n

Domestically, it has launched the \u201cindigenous innovation\u201d program to encourage its companies to manufacture high-tech goods by forcing foreign firms to hand over their trade secrets and patents if they want to sell their products there.<\/p>\n

via Beijing tries to push beyond \u2018Made in China\u2019 status to find name-brand innovation<\/a>.<\/p>\n

Just because a country takes advantage of the market doesn\u2019t mean it has a free-enterprise economic system.\u00a0\u00a0 China\u2019s government-controlled socialist economy may be good at mass industry and mobilizing labor, but innovation and consumer-capitalist tricks such as \u201cbranding\u201d are hard to come up with under a top-down, command economy.\u00a0 (So why, one might ask, are WE moving in that direction?)<\/p><\/div>\n<\/blockquote><\/body><\/html>\n","protected":false},"excerpt":{"rendered":"