Thursday, May 13, 2010

China: Mini USA?

If some people think that America is the Dr. Evil of the Global Economy by poisoning the globe with their useless brands, then China most certainly is Mini-Me. Is China the next superpower or just the “extension” of a well established superpower, the USA?

I am currently studying in Hong Kong and I can't help but notice all the American brands. Hong Kong is considered an international city and before 1997 it was ruled by the British for 99 years, so the abundance of American brands in H.K makes sense. Therefore, when I traveled up north to some of the bigger and more “Chinese” cities like Beijing and Shanghai, I wanted to see what the true Chinese economy was all about. I walked and toured the cities of Beijing and Shanghai intending to be enlightened by all the amazing Chinese cultural and savvy business startups.

I stopped and stood in the middle of the downtown and financial districts, gazing at the future global economic powerhouse. I was mesmerized. Sadly, it was a feeling quite unexpected, but not surprising, and awkwardly familiar. What I saw in those big Chinese cities was... America.

I was bombarded with American Brands. Billboards, posters, and ads all over the city filled with iconic USA multinationals. Coke-a-Cola, McDonald's, Starbucks, Kraft, Apple, and Yum Brands. There were also some European brands like LV, BMW, and Zara's. But, we all know the Europeans are a snobby bunch. They only want to appeal to the more affluent and wealthy. The Americans on the other hand are here to conquer the Average Joe's of China. New stores and restaurants were being opened left and right, most of them being international companies.

A crazy example of the Chinese love for US brands is shown by how US fast food chains are marketed in the Middle Kingdom. In America, Pizza Hut and KFC are considered quite the unsophisticated choice for a dinner meal. However, in China, eating at Pizza Hut and KFC usually means you're on the right track to success. Pizza Hut in China looks like a fine Italian restaurant with prices only the Chinese middle class can afford. What American's think is junk food, is considered a luxury in China.

So, back to the whole idea that China is going to be the next superpower. How could that be possible when all their growth seems to be backed by American brands? The lives of a typical Chinese already consists of grabbing a bite at Micky D's, chilling at Starbucks, watching a late Hollywood movie, betting on the next NBA game, and texting on their Iphones. That doesn't sound very Chinese to me. What happen to fresh white rice, soy sauce chicken, and stir fried broccoli for dinner? Watching Chinese movies and playing badminton? China is not becoming the next economic success story. It looks more like the expansion of the US empire. An expansion with the code name “Project CHINA”.

I want to ask what few economists seem to ask. Where is China's innovation? Where are the new Chinese brands? When Japan's economy was booming, the Japanese often disliked American brands with a passion. Japan innovated and built their own international companies. Sony and Panasonic made amazing hi-tech electronics. Honda and Toyota made reliable cars. The Chinese so far have Lenovo (bought IBM's failing PC division) and Li Ning (logo looks like Nike).

A lot of jobs are disappearing in America, but most of those are low end jobs anyways. Do Americans really want to be making Nike shoes and HP laptops? Hopefully, America is moving forward and creating more highly skilled jobs. Richard Florida, a famous theorist, says America is moving towards a creative society built by the creative class. The US is still an unprecedented innovative force in the world. Amazing companies like Google, Apple, and Facebook are constantly changing and creating new industries. China, however is still a developing nation with a lot to learn. For them to be number 1, they must stop following and learn to lead.

I am not here to bash the Chinese economy or to praise the US. I am just here to point out the facts. I used to be one of those China bandwagon riders too. However, after seeing it first hand, I am somewhat disappointed. Until China can come up with something that is not American with Chinese characters, I will continue to question their economic strength. Only time will time.

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