A recent string of high-profile SOE defaults have revived hopes for market reform of China’s inefficient state sector. However, despite appearances to the contrary, Beijing continues to push for greater state control over the sector and an augmented role for SOEs in strategic industries and initiatives. As a result, the performance of China’s SOEs has stagnated and the state sector remains a burden to near-term economic growth.
Michael Jordan and Bruce Lee have been making news in China’s trademark scene over recent years with cases aimed at protecting the legitimate IP rights of foreign persons and entities in China. Amendments to China’s trademark laws should provide broader protections to companies across the board; however, questions concerning whether owners of less well-known brands can find as effective enforcement as celebrities sporting household names remain.
Navigating the Chinese market had been challenging for international luxury fashion brands even before the pandemic, but shifting consumer trends in the world’s largest luxury goods market now threatens the bottom line for major brands worldwide. To remain competitive, luxury brands must identify the challenges within the market and restructure their China strategies around the culturally-charged consumer market.
China’s rapid economic development and rising household incomes have enabled a broader consumer base to invest in a healthy lifestyle by means of vitamins and dietary supplements. While domestic brands compete via localized advertisements and low-price leadership, foreign brands still reign king in terms of luxury, quality, and prestige.
China built its economic engine on the back of its strong manufacturing capabilities. However, 2020 has presented unique challenges for its producers as the nation contends with global trade tensions amid the pandemic fallout. While China’s manufacturing industry still may have a bright future ahead, Beijing and manufacturers will need to navigate the pitfalls on their road to recovery.
Since Deng Xiaoping’s 1979 Reform and Opening Up Policy began, Western brands have faced headwinds entering the Chinese market. Some have succeeded, but there have been many more failures. We’ll take a longer, historically informed view to think about what separates the winners and losers of Western brands trying to make it in the Middle Kingdom.
While the pandemic reveals the dangers of overreliance on a single nation’s production facilities, Washington is calling on American MNCs to shift supply chains away from China. However, the economic relationship between the world’s top two economic powers is complex and a rushed decoupling could sink the global economy to unprecedented depths. Instead, both nations should carefully consider how to effectively diversify the risk of economic overdependence while continuing to maintain healthy trade relations.
The narrative of AIA and Ping An is one familiar to Western brands that enter China – with many fallen prey to the pitfalls of misaligned cultural values. AIA had not fully weighed the taboo of death when it entered the Chinese market and faced significant challenges when selling insurance – stymieing its growth and providing the perfect opportunity for China’s now largest life insurer to seize the market.
As Chinese factories open their doors, American buyers close theirs. Amid the backdrop of waning foreign demand, Beijing has introduced several critical trade-friendly policies intended to support the resumption of ordinary Chinese operations. Once the coronavirus outbreak subsides and global demand recovers, China may be the only viable trading partner left standing.