How to cope with decreasing of export/demand for chinese goods.

The nationalization of Fannie Mae and Fraddie Mac in the biggest capitalist country clearly demonstrate just let the market force to take care of it own is not going work all the time.

Natural market force is importnant element, but sometimes an intervention is very helpful and necessary.

I am saying the government should set aside certain sectors to champion certain local products such as govenment and academics areas.

Whereas consumer individual and normal business sectors, then let the normal market force to work.

Got mix and match up the game. Can't just let normal market force run everything.

crobato said:

Autumn is correct here, and given that he's a genuine marketing professional, he should know his stuff. Government sponsored advertising can seriously backfire. As far as I know, many of the rising Chinese brands, aka Haier, Greer, TCL, Legend, Alibaba, Chery and Huawei, never did it with state advertising either.

Chinese companies need to earn the trust of the Chinese people. If they cannot earn that, how do you think you can expect that they can earn the trust of people abroad? Companies like the ones above are actually doing it overseas without government help.

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I strongly disagree. Even marketing professionals can disagree about how smart consumers are about advertising.

Look... people are stupid... and people's consumption habits are deeply influenced by advertising. Advertising is brainwashing and propaganda. The product doesn't need to be any good, just spend a lot of money to advertising and people will buy it.

Take for example, most people in the West have never heard of Li-Ning. Now suppose I mention that Li-Ning is a famous athletics brand like Nike or Adidas, founded by a former sports superstar in the PRC. Next time they see Li-Ning they will think Chinese "Nike" like brand.

People are influenced very easily by advertising. It's a brute force, dollar against dollar competition. That's why the government has a role to play to even the playing field. Let the best product win, not the one with the most advertising!

crobato said:

The problem with HTC is that its not well known because its products are literally rebranded by other companies. For example, the O2 line in Britain.

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That proves the point exactly! No matter how good your product is, your competitors can outspending you on advertising and you're still toast.

Chinese brands need government help to level the advertising playing field. Only when they have their foot in the door can there really be free market competition.

antimatter said:

During their dog days of starting their own brand when the korean and japanese made sacrifices by going for their own lesser products than spending on more accomplished foreign goods. Why, because a deep sense of patriotism. By such support, their own brand finally come through.

They were 10x more nationalistic or patriotic than the chinese at this point.
So, I don't see any problem of chinese government stepping up their effort for promoting their brand.

Korea and Japan buy low valued goods from the china like food, shoes, wooden furniture, clothes. They gave some business to CHina so the chinese earn some money and therefore have the means to buy the korean and japanese high valued goods.

They are treating CHina as their economic colonies and breeding ground. That got to stop at some point.

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I agree totally.... people are stupid... if advertisements everywhere tell them that Korean and Japanese brands are better, they will believe it.

You need to instill in people that Chinese brands are great products and as strong, innovative and adaptive as anybody else!

kliu0 said:

No matter how much propaganda there is, the Chinese will think for themselves. I have several chinese friends, they go to asian supermarkets and instead of purchasing Chinese products, they purchase Taiwanese products. With tech goods they purchase Sony, Nokia etc. I think at this point in time, Chinese people with money, no matter how much "patriotic education" there is will still purchase foreign products.

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LOL.... and please tell me what "Taiwanese" brands are famous worldwide.

Roger604 & kliu0 I deleted your last few post because of the bantering back and forth. This is a great discussion. Lets keep the tone of the discussion CIVIL.

bd popeye super moderator

Isolationist and protectionist policies lead to stagnation... in the end Chinese industries will just be falling further and further behind. Competition spurs growth, and by being forced to compete with foreign corporations, Chinese companies will be forced to catch up, and the less-efficient and unproductive companies will be weeded out.

In order to build consumer trust, Chinese companies need to set up and maintain higher standards of product quality. One positive thing the Chinese government could do to help is to better enforce regulations on product safety and quality. With all the complaints from American consumers and politicians about lead-coated toys and tainted pet-food from China, you can only imagine the quality of the goods Chinese consumers must choose from.


On another note, there are some highly successful Chinese brands today, such as Li Ning Sportswear. Another way to create strong domestic brands is to acquire foreign companies, such as Lenovo, which has become one of the must successful laptop retailers in the world. In the end though, across the minds of most Chinese foreign brands are symbols of wealth and status, as reflected by the comparatively low number of high-end Chinese brands in nearly all fields. Only time can change that.

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kliu0 said:

I totally agree.
Thats how most businesses operate in the world of free market economies.

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Why did US nationalize the Fannie Mae and Freddie Mac? Isn't it supposedly free market?

It's called corruption. Everyone does it!

As for Lenovo, its notebooks are recognized for durability and build quality, albeit inherited from IBM.

FriedRiceNSpice said:

Isolationist and protectionist policies lead to stagnation... in the end Chinese industries will just be falling further and further behind. Competition spurs growth, and by being forced to compete with foreign corporations, Chinese companies will be forced to catch up, and the less-efficient and unproductive companies will be weeded out.

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That's too simplistic, it's like a "first year economics" kind of view.

The real world is much more complex. From real world experience, developing countries CANNOT compete to create a brand unless they have some government help to give it a foothold in the domestic market.

All the name brands from Japan (and Korea) went down this road. They didn't just compete themselves into a market player from scratch. They had help along the way. Not only that, all the major corporations of Europe have shall we say strong government connections (Ahem Airbus Ahem).

The reason why the free market model fails is because of imperfect information. Consumers do not have the time or inclination to try all possible choices before making the decision about the "best one". They just buy whatever they see on TV or other advertisements.

To build a developed economy you need people to BELIEVE in your country. Just like you can't start a small business unless you convince a loan officer that you can pay back a loan. You need government to encourage this TRUST in the economy.... otherwise slick foreign corporations will make sure they corner the market and not any domestic players.

Roger604 said:

I strongly disagree. Even marketing professionals can disagree about how smart consumers are about advertising.

Look... people are stupid... and people's consumption habits are deeply influenced by advertising. Advertising is brainwashing and propaganda. The product doesn't need to be any good, just spend a lot of money to advertising and people will buy it.

Take for example, most people in the West have never heard of Li-Ning. Now suppose I mention that Li-Ning is a famous athletics brand like Nike or Adidas, founded by a former sports superstar in the PRC. Next time they see Li-Ning they will think Chinese "Nike" like brand.

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Chinese like names don't really work well. The Taiwanese have long learned that, and just use initials like HTC or use English sounding names like Acer or Asus.

Figure out why upcoming Chinese brands are using non-Chinese sounding names like Lenovo, Haier, Greer, TCL and Chery.

People are influenced very easily by advertising. It's a brute force, dollar against dollar competition. That's why the government has a role to play to even the playing field. Let the best product win, not the one with the most advertising!

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Wrong. Government never advertises well. Any attempt by the government to advertise results in sounding like propaganda. Government advertising for Chinese products will only sound like propaganda.

That proves the point exactly! No matter how good your product is, your competitors can outspending you on advertising and you're still toast.

Chinese brands need government help to level the advertising playing field. Only when they have their foot in the door can there really be free market competition.

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Not true. For example, considering how the Chinese internet companies have managed to outplay giants like Yahoo, Google, eBay in the Chinese market and are now starting to move overseas, e.g. Alibaba. Chinese car companies are also eating up market share from foreign brands.

In specific markets, like air conditioning and appliances, Chinese makers have gone ahead of their foreign competition. TCL for example, is now the world's largest producer of TVs.

I agree totally.... people are stupid... if advertisements everywhere tell them that Korean and Japanese brands are better, they will believe it.

You need to instill in people that Chinese brands are great products and as strong, innovative and adaptive as anybody else!

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All should be done by Chinese companies themselves, not with government help. And quite frankly even the "famous" Japanese, Korean, European, and American brands help the Chinese cause, when their "famous brand" products comes with a "Made in China" label with it. These products are like Trojan Horses that help inch by inch, improve the image of Chinese products worldwide.

Branding on DVD players, for example, has become a non-issue. People will just buy the cheapest player they can find, regardless of the name tag. At this point, the average consumer knows even the cheapest 30 dollar player will work for years, no differently from the 300 dollar player.

antimatter said:

Why did US nationalize the Fannie Mae and Freddie Mac? Isn't it supposedly free market?

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Because the impact of those two failing on the US economy itself would be much greater, than lets say, what China lost investing on those two companies.

The main wealth of the American middle class lies in their home properties and the ability to mortgage them at a reasonable price. The current foreclosure and mortgage crisis is directly right at the core of the US economy.