China 2008: National Brands v.s. International Enterprises
This next installment in the CDT series on important issues facing China in 2008 concerns China’s domestic market. See also previous China 2008 articles: China and the Developing World, Nationalism, Internet Culture, and Identity, Environmental Crisis, The Global Financial Crisis, Revaluation of the Yuan, and Human Rights.
If we can say that the 2008 Beijing Olympics was a brilliant show in which China tried to market itself to the world, then the Sanlu milk contamination scandal marked the beginning of the post-Olympics period in which China returned to reality. Although the nation is already one of the world’s greatest economic powers with respect to its gross domestic product, there has always been a fear among many Chinese people of an invasion of foreign multinationals. The state has been trying to promote national brands, but, just like Sanlu’s milk, the quality of their products has encountered problems. Among the newly rich and also some less wealthy, the cult to go after foreign brands is still growing, and international brands still dominate, especially in the high-end technology market where Chinese national brands have always had difficulties with their lack of innovation.
CDT has been tracking several events in China’s post-Olympics domestic market where Chinese customers face tough choices with respect to national and international brands.
The first event started with Microsoft’s attempt to attack piracy, which began with its lawsuit against Hong Lei, the developer of “Tomatolei,” the most widespread pirated version of Windows XP in China. Hong Lei was quickly put in jail in September. Then in October, Microsoft launched its controversial WGA patch update which black-screened pirated Windows XP users’ desktop backgrounds every hour. As a result, this move triggered an eruption of anger and discontent from Chinese netizens toward Microsoft. However, the anger could not solve the problem. The state encourages people to switch to the open source platform Linux, but for the majority of ordinary users, there are not too many alternatives but to continue to use pirated versions with “black screens” or simply not install the update as the official prices of authentic versions are still fairly high for them.
The second hot topic was the news, “Jailed Customer Faces Large International Enterprises.” Two years ago, ASUS accused Huang Jing, a female college undergraduate, of extortion as Huang asked ASUS for $5 million so she would not publicize problems with her ASUS laptop computer. Huang was put in jail for ten months and was finally released for insufficient evidence. The news became heated this November as Huang got reparations from the state and started to countersue ASUS for selling defective products and putting its customer in jail.
The Taiwan-based ASUS soon became a target of angered online criticism as many people had experienced frustration with consumer rights protection in China. (However, international brands are usually considered more reliable.) The event seemed to become just another case in which netizens played the role of justice against civil rights abuse. However, as the discussion garnered more people’s attention, some netizens pointed out that Huang’s partner and agent, Zhou Chengyu, was actual a notorious online second-hand laptop reseller who had tricked sellers and buyers many times. As more details were later revealed by the Chinese media and also ASUS, Huang and her partner looked more and more suspicious. Some netizens have quit the campaign against ASUS as they found little justice to fight for. Many are still in the battle as they have more distrust toward the alienated ASUS despite all the negative news about Huang Jing. However, very few have shown their support toward ASUS.
The Baidu scandal somehow reflects another side of Chinese consumers. Baidu was once thought of as a successful model of Chinese native brands. It has been constantly dominating China’s search engine market, surpassing the international search engine giant Google as it was once considered to produce better relevant search results for Chinese customers then Google. However, due to suspicion of its guilty involvement in the Sanlu scandal as well as its later bid-ranking scandal, which unfolded in November, it has become a new target of online criticism largely driven by netizens’ general anger toward internet control. The native Baidu is probably going to lose Chinese customers’ trust if it does not change its strategy in the near future, as many netizens have already declared to not use Baidu products anymore. In contrast, Google has recently become exceptionally favored by many Chinese netizens although it also exercises some Internet control in China but only in the political sphere.
Just like in many developing countries, there is a general hostility toward foreign things in China as people tend to regard foreign factors as the causes of many domestic problems. The custom has a very complex historical origin and can be traced back to as early as the Boxer movement in the late Qing Dynasty. Many people always suspect that there is some western conspiracy behind their misfortunes. For instance, in the Microsoft case, some netizens suspect that it was Microsoft’s “conspiracy” to first let pirated versions of Windows XP occupy the Chinese market and sweep out native software. Now Chinese people’s daily life heavily relies on Window, so it has started to kill pirated versions and become a monopoly. Similarly, ASUS got alienated as there is a general suspicion (with the state’s tolerence for political reasons) that Taiwan-based corporations have done many unethical things in mainland China such as in the 2006 Foxcoon case and 2007 Xiamen PX case. For the same reason, Google got alienated too when it first entered China in 2005.
It is also believed that supporting national brands will somehow help solve problems. Nationalists even take their claims further to deny foreign products as a means to help their nation. (See the 2008 Carrefour boycott, and the anti-Japanese movement in 2005.) According to a recent study, Nationalism plays a very important role in making Chinese customers’ decisions.
However, some people sometimes find little moral ground to support their sentiment. After the milk contamination scandal was fully revealed, many completely lost their trust in domestic milk companies, many of which were once national/local pride while the New Zealand company Fonterra won the respect of many Chinese. In the Microsoft case, some netizens also doubted whether they, as pirated Windows users, have any moral ground to condemn Microsoft. Similar things also happened in the ASUS case as some netizens pointed out that Huang Jiang and her agent are too greedy, and also ASUS wasn’t responsible for jailing Huang Jing (but the state was).
They also find that sometimes some national brands are just not worthwhile for them to support. Some national companies lack an adequate business ethical code as they only know how to make profit but have little concern for their users’ experience. After people found that Baidu used its political advantage to make a profit in business, many of them have turned to Google as its “Don’t Be Evil” motto now has become more appealing to them. Also, in response to Microsoft’s anti-piracy effort, there was also this news that Nanchang city forced all internet cafes to replace pirated operating systems with Red Flag Linux, a Chinese-made Linux system. However, the one-time forced installation fee is RMB 5000 (approximately $725, which is far higher than a reasonable price for a Chinese small business) while Red Flad Linux is in no way better than any other open-sourced versions of Linux. (See the artcle “The World’s Worst Way to Market Linux.”) It seems like local protectionism, and besides offering native companies easy money to make, does not really help them build their products better.
In the age of globalization, Chinese customers have experienced a difficult dilemma between national brands and foreign multi-national brands, which will probably continue to be a big theme in China’s future economical development.
POSTED COMMENTS: 17 Responses
The article seems to offer a critique of Chinese consumers allowing nationalism to play a larger role in determining their purchasing decisions. However, what about American citizens?
How many times has a “Made in the USA” badge been used as a marketing tool? How often do we hear people saying “buy American!” when it comes to automobiles?
There is no right or wrong answer when it comes to nationalism and consumer preferences; instead, we should stop holding Chinese to a different standard than we do with Americans.
I agree that nationalism is in every country to different degrees. It might have been very strong in America especially in the first half of the 20th century but is less prominent now. I think it is an empirical fact of the world that people tend to be nationalistic under certain historical circumstances.
However, instead of discussing why it should exist (which is a much deeper question), I was just trying to give a summary of the phenomenon in both economic and social scopes whereas I had no intention to do a normative evaluation.
Sjia,
Thanks for your response. I appreciate your effort in providing a comprehensive and objective summary of the phenomenon. I just wanted to point out that certain things, such as the “conspiracy” discussion, seem to “feng ci” or mock Chinese understandings of the events. For example, when talking about Microsoft’s black screen issue, you write that “some netizens suspect that it was Microsoft’s conspiracy.” As we know, however, the word “conspiracy” is often used in association with the fringes of society (e.g. UFOs) in the American press.
Just out of curiosity, when you write that “people tend to be nationalistic under certain historical circumstances,” would you say the Chinese are justified in the Carrefour case? I understand this would be a normative judgment but I am curious to hear your thoughts on this.
Zhang Fei,
I’ll let Sjia answer for himself / herself on Carrefour. My answer, though, would be that while I won’t stop anyone from boycotting whatever they wish to boycott, it is disappointing to see people turn out in force against a brand not because it mistreats its workers or because its union is going through a dispute or because it is bad for the environment or any other such concrete reason but instead because the leader of its nation of origin met with someone else that the host government happened to dislike (in this case, H.H. the Dalai Lama). It would be like Americans boycotting Chinese goods simply because Hu Jintao met with Fidel Castro.
Put another way, I myself see hurt national feelings as a weak reason for a boycott. If everyone was as sensitive as China is (or professes to be) about who the leaders of other countries do or don’t meet with or what one of dozens of television channels in one of dozens of countries says about such and such country, then we would have endless campaigns against an endless list of goods with no one’s life improving measurably.
On the other hand, the “Made in the USA” labels carry a double meaning. One is plain old jingoism, of course– i.e. the belief that America is the best, etc. Another, though, is something with a little more substance, i.e. the upholding of worker rights and the union movement’s attempts to protect jobs. If Chinese boycotts were aimed at something like this, then I would have more sympathy.
In fact, a group of Chinese college students just released a report about unfair labor practices at Coca-Cola bottling plants: http://www.chinacsr.com/en/2008/12/15/3876-college-students-claim-coca-cola-using-illegal-chinese-labor/. They are calling on Yao Ming and others to end their deals with the beverage maker. This is a cause I could rally behind!
OTR! Good to see you again. Another great post. Been a while since I posted on CDT (last time it was “azn” and the Tibet banner article) but it’s good to see you again! I’ll post a response tomorrow when I get a chance.
Hey Zhang Fei,
Great to see you again, too! I’m afraid I’ve gotten rather cynical and clumsy in my absence. So, excuse me—and correct me—if I get off on some tangent. I am looking forward to your responses.
“…while I won’t stop anyone from boycotting whatever they wish to boycott, it is disappointing to see people turn out in force against a brand not because it mistreats its workers or because its union is going through a dispute or because it is bad for the environment or any other such concrete reason but instead because the leader of its nation of origin met with someone else that the host government happened to dislike (in this case, H.H. the Dalai Lama). It would be like Americans boycotting Chinese goods simply because Hu Jintao met with Fidel Castro.”
I would argue that the French president did more than just speak with the Dalai Lama, he stated that the Chinese should stop “oppressing religious freedom” and stop the “crackdown on peaceful protests” which somehow killed Han Chinese and even Hui.
With regards to your American analogy, I think a more apt one would be if Hu Jintao met with Fidel Castro and then said “the U.S. should stop starving the people of Cuba with economic sanctions.” Obviously this is more inflammatory than a simple meeting.
Finally, and most significantly, we must stop judging other cultures by American standards – it is simply illogical. To give an alternative example of this extreme lack of relativism, I heard an American-Born Chinese lecturer say at the end of the lecture that she “could not believe that her parents never said the words ‘I love you’ to her as a child.” Growing up as a 1.5-generation Chinese in the States, I would NEVER have wanted to hear my parents say those words because I know they love me – saying those words explicitly would cheapen the meaning of their actions.
Here, in this “I love you” example, we have two clashing perspectives: one, the American one which deems it a necessary phrase; and two, the Chinese one, which believes that it should not be necessary to remind someone verbally (you demonstrate it through your actions).
–> Take this framework and apply it to nationalism and consumer preferences. We in the US, the capitalist capital of the world, might believe that it’s positively inane to base your buying decision off where a product is made rather than how much value it holds. For a country rising up from a century of humiliation, however, the answer may not be so simple.
Zhang Fei,
You are right that we need to be careful not judge other cultures by our own standards. And your example of different expressions of love is a good one. It reminds me of how saying “thank you” to friends in China can cheapen the meaning of those friendships if one is not careful. There are many layers to how people interact and think about the world.
I would disagree, though, that people in the capitalist U.S. believe it’s “positively insane to base your buying decision off where a product is made rather than how much value it holds.” As you know, there are countless boycotts upon boycotts going on in the United States right now. To name just a few, there is a boycott of Coca-Cola on some U.S. college campuses because of violence against Coke trade unionists, a boycott against Caterpillar because of its manufacturing of special machines for wrecking Palestinian homes, a boycott against New Era hats (or there WAS a boycott) because of conditions at a factory in America’s northeast, etc, etc.
What I object to is not boycotts, but boycotts based on national dignity. To take your example, I would be extremely supportive of Hu Jintao condemning the American embargo of Cuba (a boycott of sorts itself) on his next trip to meet with Castro—and so would many other Americans on the left. But, of course, there would also be some people who would be angry. Perhaps not as angry as the Carrefour boycotters, but a little angry, like they were when France (!) came out against the Iraq War. Then, an American congressman renamed congressional “French fries” as “freedom fries.” And that anger was stupid and would be stupid in any country, in any context. Why was it stupid? Because it was based on national pride. And because the French were actually right.
It is disappointing when the source of a people’s anger is someone telling the truth about their country. I don’t know which protests exactly H.H. the Dalai Lama was referring to, but unless (like many Chinese netizens) one focuses exclusively on the March 14 riots and ignores everything that came before and after, it should be obvious that there was a massive crackdown on peaceful protests in the TAR and in Tibetan areas throughout this year. Why should it make anyone legitimately angry that someone else discusses this?
The clampdown started, of course, with the beating of marching monks in the days between March 10 and March 14 and continued after the 14th with the suppression of the vigil at the National Minorities University in Beijing and with the violence at Kirti and Tongkor in Sichuan and elsewhere. Looking at the photos of all the protesters shot in the face or the side is chilling. If those images are chilling to look at, why is it an insult to say something?
To say that this was a violent Tibetan movement because of one day in March and a few scattered incidents is like saying that the Civil Rights movement in the U.S. was violent because of the 1968 riots. Yes, calling it all violence makes sense propaganda-wise, but why should the people of a country care about what works propaganda-wise, why should the people care about image over substance?
Surely, there has to be some appreciation for an opposition? For someone who keeps difficult truths alive? If Hu Jintao was willing to play that role to the U.S., talking about the difficulties of U.S. sanctions on the Cuban people, describing the horrors of the Iraqi occupation, etc., he would be doing a great service. The same goes for H.H. the Dalai Lama.
More broadly, though, it seems strange to make a country so important. Yes, like you said, there are more important things than the market. But why should those things be the nation-state? Why not people?
Zhang Fei and Old Tales Retold,
it is really my pleasure to have you here getting engaged in this thoughtful conversation.
For Zhang Fei’s comments and questions, I’ve just put the word ‘conspiracy’ inside quotation marks so that it might sound more neutral now. I don’t know too much about conspiracy theories. However, I do want to keep this word because it serves two purposes. First, it is not obvious that Microsoft had this plan mentioned in the article when it first launched Windows XP in China. It might eventually turn out to be in such a way, but it is hard to say that Microsoft intentionally did it or that it was preplanned. Thus, if the plan really existed, it must have been something secret like a “conspiracy.” Also, this word is usually used in a negative sense inferring that there is some dirty thing behind the table. I think some Chinese netizens used this term precisely because they wanted to immoralize Microsoft as its attack on piracy, on the table, is pretty much valid. The defiance to Microsoft may or may not have been a sort of nationalistic behavior, but it seems like people do need to find ethical reasons to backup their emotion.
Then, regarding my point of view on nationalism, fist I want to say sorry about my overuse of the jargon “normative” without introducing its meaning in political philosophy. I meant that it is an empirical fact that nationalism, under certain historical circumstances, has been pretty popular in many countries. However, it would be something completely different to make a normative claim such as to say ‘nationalism ought to be justified/unjustified.’(Whether something is/was in a certain way is irrelevant to whether it should be in such a way.) I am also reluctant to understand political things normatively. We surely shouldn’t say nationalism is always a good/bad thing. Rather, I would understand it case-by-case. Old Tales Retold suggests that nationalism itself cannot be a reason for itself but should only be justified by independent reasons (probably ethical or economical). I want to say something a little bit weaker. 1) People tend to find independent reasons(ethical /economical/etc.) to backup their emotion. 2) People also do believe that their nationalistic behavior at least shouldn’t be unethical, i.e. when people confront a contradiction between their nationalistic sentiment and ethics, most of them would either choose ethics or try to say that there is no such contradiction, but very few would just choose to go nationalistic right away while it is unethical. Ethical concern is sort of prior to nationalistic sentiment—I guess my article can backup this claim.
With regard to boycotting French merchandise, I know it is very controversial. But from my own point of view, I can hardly agree with the nationalists’ ethical reasoning this time. There is no evidence to say that Dalai Lama was responsible for the Lhasa unrest. Also, it would be much better for the Chinese government to have peaceful conversation with Tibetans rather than confrontation. Therefore, I also do not find anything wrong about Mr. Sarkozy’s urge that the Chinese government should stop its closed-minded approach on its minority policies. I can’t say too much about other social/economic factors, but from my ethical perspective, I can’t quite see any reason to justify Chinese nationalists this time.
There is no evidence to say that Dalai Lama was responsible for the Lhasa unrest. Also, it would be much better for the Chinese government to have peaceful conversation with Tibetans rather than confrontation. Therefore, I also do not find anything wrong about Mr. Sarkozy’s
Some one who was once under the payroll of CIA will always be under suspiciona And the fact that he refused to call off the Riot will prove that at least he is in tacit understanding with the rioter and at worst aware what would be the consewuent of the riot which is more crack down Also no one has hardprrof that Hitler was directly involved in final solution You can always some one else do the dirty job itself A nod here and a wink there will be sufficient
Your assertion that China doesn’t want to peacefull resolution is nothing but a howash But if you mean that peacefull resolution mean voluntary dissolution and conplete capitulation to DL demand of course any sane individual will refused that illogical and unsubstantiated demand
John_Ooi,
sorry, I can’t read you well. Please forgive me if I misunderstand you.
Surely, you can always suspect anything. However, it would just not be convincing if your justification is purely based on suspicion. Many things have changed dramatically since the end of Cold War. The Cold War way of thinking probably also wouldn’t provide any clue for today’s issue.
I don’t know too much about final solution. I would say that Hitler was politically the person who was directly responsible for his whole empire. However, Dalai Lama is more like a spiritual leader now, and from what we have so far, it can hardly infer that he has too much political linkage to people inside Tibet.
As far as I can understand, your last paragraph is more or less like a straw man argument. First, ‘peaceful conversation’ is not the same as ‘peaceful resolution.’ You can propose a resolution on your own, but you need at least two parties to have a conversation. Sarkozy never says that Tibet should gain its independence or even autonomy, rather what the western society in general wishes is just that Tibetans would have a chance to have a conversation with the Chinese authority and do not get politically persecuted for expressing themselves. You surely can always propose a resolution on your own, but it can be hardly imagined to go peaceful if you force others to accept it. Also, I guess we can still say that Dalai Lama is the spiritual leader for and also trusted by most Tibetans. It would just be much better if the Chinese authority can have an open-minded conversation with him. （ It seems like the Chinese authority’s strategy now is just to wait for his death, which is just not appealing to me.)
As far as I can understand, your last paragraph is more or less like a straw man argument. First, ‘peaceful conversation’ is not the same as ‘peaceful resolution.’ You can propose a resolution on your own, but you need at least two parties to have a conversation.
Sorry for being a lousy typist and no correction tool in this website
I don’t understand what you mean by strawmen But they have been having conversation for years with nothing to show off because of Dalai Lama insistence of having 3 province of China Gansu,Sichuan and part of Yunnan as part of greater Tibet
Never mind that they never exercised control over said teritory There only justification is because there is sizable ethic tibetan in Those teritory I find it ridiculous It is the same of Saying that Singapore is part of China because the majority of population are Chinese
His other insistence of restriction immigration to Tibet is another idea that is totaly unacceptable to most Chinese Sarcozy has no reason whatsoever to meddle in the internal politic of other country perios he should shut his mouth period
John,
I’m glad we’re getting back to present-day specifics. The stuff about 1950s CIA operations is a little beside the point, in my opinion. After all, even the Chinese government worked with the CIA (against the Soviet Union). There are always shady deals in any situation like this. We can’t let what happens behind closed doors and who knows who distract us from broader policy and ethical arguments. And in general, Hitler is best left out of discussions–he is the straw man of all straw men.
You’re probably right that the Tibetan government in exile and H.H. the Dalai Lama’s proposal to combine all Tibetan areas into one autonomous region is pretty much a deal-breaker for the Chinese side. Immigration restrictions are probably feasible, though, and might happen on the PRC’s own initiative, with our without a deal with H.H.: China surely realizes that part of the reason for the uprising was an unequal distribution of wealth on the Tibetan plateau, with “development” overwhelming benefiting migrants from elsewhere.
Not being present at the negotiations, I of course don’t know exactly how the discussions have progressed—who said what when, etc. But my impression from the outside is that China hasn’t offered any meaningful concessions of its own to counter the Tibetan demands. That’s no way to negotiate.
Why can’t others have opinions on this? “Internal affairs” don’t preclude plenty of countries from meeting with the political opposition within the United States–or, in some cases, from championing the cause of American political prisoners, like Leonard Peltier. People from around the world have supported Puerto Rican independence—as they should—and have traveled to meet with independence activists in that American colony. Strong countries need to be comfortable with being porous, at least to a degree.
I personally agree with John that the Tibetan government in exile’s current demand may be too ambitious. But as long as there can be a real conversation, I think everything can be discussed.
I am in the same position with OTR that I don’t know exactly how the recent meetings between Dalai Lama’s envoys and the Chinese government were going. It’s true that Han Chinese might hardly accept Tibetans’ demand, but I also agree with OTR that China should be at least more tolerant. You may dislke somebody’s demand, but please respect him/her and, again, don’t politically persecute people for expressing themselves. I know political things are all very complicated, but from the ethical perspective, this is just what all I want and also many people in the world want, as I guess.
Does anyone have a link to an article showing that the Dalai Lama demands that parts of Sichuan, Gansu, and other provinces to be part of the new autonomous region?
The full memorandum on genuine autonomy as well as a summary can be viewed on the web site of the Tibetan government in exile (Central Tibetan Administration, CTA):
http://www.tibet.net/en/index.php?id=78&articletype=press
http://www.tibet.net/en/index.php?id=77&articletype=press
These are not so much “the Dalai Lama demands” as those of the Tibetan government in exile which is headed by prime minister Samdhong Rinpoche.
The Dalai Lama calls himself “semi-retired”, “a senior adviser” and “a free spokesperson for the Tibetan people”; political decisions are taken by the CTA.
Furthermore, those “demands” at this stage are rather “suggestions” along which the CTA is seeking an acceptable solution with the framework of the Chinese constitution (see Introduction to the summary).
A fairly detailed reply from the Chinese side can be found at:
http://news.xinhuanet.com/english/2008-11/21/content_10391968.htm