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 ZT: A PR guy's experience with the "China Dream" |
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wanderer
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作者：wanderer 在 海归商务 发贴, 来自【海归网】 http://www.haiguinet.com
I was lucky enough recently to meet with an editor of Forbes who pointed me to the single most enlightening book I've read about China, at least from an economic/business perspective, Joe Studwell's China Dream: 《The Elusive Quest for the Greatest Untapped Market on Earth》.
One Country, Two Economies
I won't review the book here. I just want to explain very briefly Studwell's central thesis of "two parallel Chinese economies." This is it, in the words of a reviewer:
One thing that "The China Dream" explains very clearly is the extent to which two economies in China exist parallel to each other. One is the old socialist economy that is protected from change and the market forces. The other is a vibrant, export-oriented economy of manufacturing plants that assemble goods under the management of mostly Taiwanese and Hong Kong companies. The latter is the poster child for China, but the former continues to gobble up the people's savings to churn out the products that the planners want to see.
In other words, (1.) China's an undisputed powerhouse when it comes to manufacturing and exporting goods like shoes and toys and light electronics, usually for foreign-owned companies. However, (2.) as a market to which trading partners can import and sell their own goods, China has proven elusive because the old state-owned enterprises are given all the advantages, while foreign firms face tall obstacles -- license fees, bureaucratic run-arounds and a lack of cooperation that stifle competition.
Bird's Eye View from Beijing
The nature of my job in Beijing gave me a wonderful opportunity to see Rule No. 2 in action. I dealt almost exclusively with multinational companies trying to "crack the China market," and many turned to PR as tool. In my dealings with the executives of the MNCs, most of them foreigners, I got to see first-hand just how exasperated they were.
One was the president of a famous joint venture. It was supposed to open the floodgates for this industry so that US and European companies could reap infinite profits. Everyone was going to become rich.
That was two decades ago. After 20 years, there've only been a couple of years of profit (modest profit). Considering the hundreds of millions of dollars the foreign companies invested into this JV, it can only be seen as a money-bleeding mess.
I worked with the president at a company event, helping him to stay "on-message" -- there were losses in previous years, but the tide is about to turn, especially with the expansion of our product portfolio and China joining the WTO and blah blah blah. I got to hear just how frustrated this guy was with the company's reality.
The cost of the event we were holding that day was a quarter of a million US dollars.
Then there was the high-ticket jewelry and consumer electronics and all sorts of chic products my clients wanted to sell. In China, you don't introduce a product without a big-bang press event held in a 5-star hotel. They usually include a pricey fashion show, along with the obligatory boring speeches.
Western companies dump money into these things like there is no tomorrow, a huge boom for hotels, lighting companies, choreographers, models, construction firms, etc. It's all part of the investment MNCs feel must be made to market their wares to China's 1.24 billion consumers, "the last remaining untapped market," the holy grail of all marketers. The China Dream.
And yet for all the expense, I got to see for myself that the results were usually the same: No one was buying the products. Budgets for the daily PR work were constantly being slashed (although the big events still went on). All of those PR agencies, which were chasing the China Dream just like their clients, were in the same boat. They were losing money.
The 2008 Olympics -- A Pot of Gold for MNCs?
I also saw Western firms chase the China Dream when it came to bids for the 2008 Olympics. Clients wanted to get "their piece of the action," and I was involved peripherally in some of these projects.
One Western architecture firm had its design for a stadium selected by the Beijing Olympics committee, and we announced it with great fanfare. I was surprised to learn, however, that the firm would be receiving basically no money for its work! Beijing's attitude was that companies that won contracts for the Beijing Olympics would be compensated by the publicity they earned.
Now, as a PR person I can say that in a sense this is true -- there would be PR benefits. But if any other country tried to pull this off, the companies would be making an outcry. In China, however, the MNCs don't want to risk offending anyone, because the future business potential is so enormous. So once again, the China Dream is unattained in terms of dollars.
Everybody's Chasing It
I also saw my own company and its competitors actively chasing the China Dream. In the 1990s, multinational PR agencies raced to set up shops in China, making hefty investments in infrastructure and staff, while reaping little if any payback. Nearly every multinational agency I know of in China operated at a loss last year.
Despite the premium addresses, high-paid Western managers, fancy conference rooms and reception areas, the one thing missing are the retainers and fees. The MNCs’ goods simply aren't selling so the pr/marketing budgets are slender at best. The China Dream, so alluring and blinding, has yet to to be attained by the big PR mega-agencies that poured into Beijing in the mid-90s with dollar signs in their eyes.
Can the Dream Come True?
I keep hearing anecdotal evidence that this or that MNC is about to see the China Dream fulfilled. General Motors and Boeing have just announced big deals, for example. But that has to be looked at in terms of the amount of investment they had to make to win those deals. As Studwell points out again and again, what looks like a dream come true all too often turns out to be a mirage.
NOTE: There are definitely some exceptions to Studwell's thesis. In a few industries, like mobile phones and fast-food restaurants, MNCs have seen the China dream come true, making big money from Chinese consumers. But, as Studwell explains, so far such successes happen only when there are no competing state-owned enterprises that the bureaucrats need to protect. There were no Chinese companies in those industries, so there was no need to set up obstacles. For a much deeper explanation, read the book. You'll enjoy it.
作者：wanderer 在 海归商务 发贴, 来自【海归网】 http://www.haiguinet.com
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 ZT: A PR guy's experience with the "China Dream" -- wanderer - (13166 Byte) 2003-11-17 周一, 15:23 (850 reads)
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