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

[antimatter]

Well, has to make it up by domestic consumption.

It's frustrating to see the demand for chinese goods going down , exporting less and at same time, you have whole bunch of foreign companies trying to get into CHina to make money.

Less chinese export + more foreign goods in china = Disaster

You can't controll the export part. But definitely ways to combat the inrush of foreign goods into china without infringing the WTO rules.

1) Patriotic education, Government should sponsor ads to promote national brand over foreign brand.

2)Mandate all government and acadmic instituiton to promote domestic products, such as Godson processor running on Linux box. The ratio of Windows machines to Linux machine should at least be 50%-50% If not using windows, more companies would pop up to develope Linux type of applications.

3)Increase the speed of South to North water diversion projects. If abundance of water reaching to North(Beijing, Inner Mogolia, Shannxi, Ninxia) and North west (Xinjiang, Gansu,)
Then some of the desert areas can be converted into semi arable farm land(potatoes, crops for biodiesel fuel, any type of crops demand less water)
With the water, new cities will be able to pop up. Unemployed people from different provinces will able to migrate to those new land to build up new communites and plan the crops raise the food output of the country.
Heck, look at california , arizona,in US, used to be big desert but able to changed into livable commnuties and farm land by channeling the water from colorado.

4)stop investing and risking money made from the good days and invest in the useless financial sectors in oversea. Instead should be investing in the country's own infrastructure. Money make from the good ole days doesn't mean you can continue to make those type of money

 

[crobato]

Some of it seems rather totalitarian and backward from where China is actually heading into, which is liberalization and allowing things to stand up for their own merits. The worst is the concept of "patriotic" education. I think the tech savy Chinese are too smart to buy propaganda. The government is not very good at it either and its only going to come off looking even worst. It may even backfire because the perception of trying to force something may also imply that that something isn't good and needs help.

The one thing the Chinese government can do is provide better access to technological education to the people, including grants and scholarships to the gifted, setting up more technical schools and colleges.

The real direction where the Chinese industry has to head into is towards higher valued goods.


China already has plenty of investment in infrastructure. Maybe too much.

 

[RedMercury]

Yes, I would say infrastructure investment is actually too much. Comparatively more needs to be spent on the "software", i.e. cultivating human resources and raising disposable income.

 

[Roger604]

Some of it seems rather totalitarian and backward from where China is actually heading into, which is liberalization and allowing things to stand up for their own merits. The worst is the concept of "patriotic" education. I think the tech savy Chinese are too smart to buy propaganda. The government is not very good at it either and its only going to come off looking even worst. It may even backfire because the perception of trying to force something may also imply that that something isn't good and needs help.

Actually, antimatter is right.

The market is never truly "free." People don't really have information on what products are good and what products are bad. All they have is advertising and marketing -- private propaganda basically -- to tell them what to buy.

Chinese companies face a huge structural barrier to building up brands because they can't get their foot in the door. You need to get some sales going to gain reputation. But you can't get sales going if your slick foreign competitors outspend you on marketing and advertising.

It's like how government sometimes use spending to stimulate the economy. Once you get something going, then it builds momentum.

The same thing in building Chinese brands. You need the government to help stimulate people to try Chinese brands, then it builds momentum.

Of course, this is a temporary measure, not a permanent hand-out. The corporations will need to improve their products and marketing to survive in the future.

 

[Autumn Child]

You can't force people to believe in brands just by advertising. Branding is about fulfillment of promise. Foreign companies have a headstart and people know they can be trusted compared to new comers such as chinese companies. Chinese companies also has a fair chance in proving themselves because they have the advantage of flexibility, energy and sensitivity to local knowledge. I worked in the largest brand consulting companies in the world and most of our client in China are Chinese companies, not the multinationals. The Chinese are learning fast. Take alook at the Interbrand china website and read the reports about the growing chinese brands. Foreign good still hold the upper hand in most luxury items but less and less in the non-luxury items. Educating Chinese CEO to develop and maintain brands are no easy tasks, but some of our works already bear fruits (such as Huawei, Vanke, etc).

The decline of demand for chinese goods can be mostly attributed to the worsening economic situation around the world and the increasing cost of chinese goods. I rather see china increase its domestic market and move to high tech product. Relying economic gains from export can be risky. China still have a large FDI and growing domestic economy to support growth.

As for "patriotic" education, this can be dangerous double edge swords. Uncontrolable patriotism will drive away foreign investors and makes foreign affairs much more complicated.

 

[kliu0]

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.

 

[RedMercury]

I have a few Chinese friends myself, which makes me an expert on Chinese in general.

 

[Autumn Child]

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.

Yup, and all the foreigners like me buy, Li Ning for my backpack, Haier for my TV and fridge plus kazillion Walmart goods for other life neccesities.

 

[antimatter]

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.

 

[crobato]

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.

As far as I know, some of the Taiwan branding has to come around too, besides your typical Asus, Acer, MSI and other PC brands. The most notable is HTC who makes the best Windows Mobile phones in the world and account for two thirds of that market, although Windows Mobile is still a niche compared to the entire smartphone market. 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.

High value work does not mean just selling tech products. It can mean things like programming work for Blizzard, Ubisoft and Red Storm Entertainment (yeah, Tom Clancy's games had a lot of software work done in Shanghai). To things like even doing subcontract work for Japanese anime programs which is already happening. Another example of higher value work is assembling and providing some components for Apple's iPods. Other examples of higher value includes the much discussed Chinese shipbuilding and aeronautical industries, and even space.