Saturday 14 May 2011

Why isn't China happy to be Chinese?

The skyscraper littered skyline of Shanghai took me by surprise. With towering buildings, wide highways,  and malls festooned with luxury brands, Shanghai is a veritable altar to consumer consumption. The city may not be representative of China as a whole, but it graphically demonstrates the increasing purchasing power of a burgeoning Chinese middle class.

I was in Shanghai for a friend’s wedding, and this was my first foray into mainland China. It’s one thing to read about the onward march of the middle kingdom, another thing to see it with your own eyes. There’s a real feeling of fortunes being made and empires being built around you. One can imagine the US a hundred years ago with the same no-holds barred mercantile zeal. For a communist country, China is one of the most capitalist places I’ve ever seen.

Before you all pack your bags and come rushing, I should warn you that although there’s money to be made, it’s unlikely to be you that’s making it directly. From my (albeit brief) discussions with people working here, you either need to be Chinese, or at the very least have strong understanding of the Chinese culture to survive in business here. There are plenty of expats successfully working for multinationals as employees, but no real sense of immigrant entrepreneurs making it big.

Two hundred years ago Europe was desperate for Chinese goods, yet had little to offer in exchange that China wanted. Now looking around Shanghai, almost all the luxury brands are Western, and almost all the models in the posters are caucasian. But looking at the shops, they certainly don’t seem to be full of expats or foreigners. Where once the Chinese looked down on western barbarian produce, now it seems they just can’t get enough. The best advantage for Western companies seems to rely on being Western.

From Shanghai we headed out to Beijing to do the usual sightseeing. From the Great Wall to the Forbidden city, and elsewhere, it’s noticeable that the majority of tourists appear to be domestic. Desire for Western products and lifestyle doesn’t seem to have dampened interest in their own ancient empire.

Gift hunting in the Beijing Silk Market proved to be an interesting experience. The name might conjure up visions of some dusty street market, but the modern day silk market is a 7 storey building with each floor crammed with stalls selling everything from silk to consumer electronics. Hawkers call to you as you weave amongst the shops, even physically grabbing you to draw your attention. Prices routinely start at ten times the going rate before the marathon negotiating begins. If I have one piece of advice to offer, it’s to never get too attached to any item in a shop. No matter what you’re looking at, there will be at least three other shops selling the same or very similar items. Be prepared to walk away if you don’t get the price you want.

I stepped into a stall selling silk scarves. After looking at a few, the saleswoman asked if I’d be interested in some “Hermès” scarves, pulling out a few to show me the label. I put it to her that it was rather obvious that these were not genuine Hermès scarves. She looked at me for a moment and gave me a knowing smile. “Chinese Hermès” she whispered conspiratorially. China has a long and illustrious tradition of making silk. Why not just sell me Chinese silk and be proud of it?

Fifteen minutes of negotiating later I emerged from the stall, proud possessor of some fine Chinese silk scarves. Well, as far as I can tell anyway. I’m told that the only surefire way of checking that a scarf is made of silk rather than polyester is to burn it and see how it reacts. The negotiation was hard enough without me trying to set fire to the merchandise.

The Silk Market is a great place if you want to buy knock-off western brands. There’s no shortage of LVMH bags, Ralph Lauren Polos and Mont Blanc pens. If you buy these brands in order to be seen with the little polo player on your chest, then by all means head on over. If you buy them in the belief that the marque guarantees a certain level of quality then you’re left in a bit of a quandry. It’s certainly possible that these come from the self same factories that make the “genuine” goods, but they probably don’t. Unless you’ve got a good eye for what you’re buying, it can be hard to tell.

While the Chinese government permits this kind of thing to go on freely and openly, Chinese made goods will continue to suffer from a reputation problem. However one only has to look south to the Foxconn factories producing high quality Apple iPhones to see that China is perfectly capable of matching any Western craftsmanship. Japan managed to successfully exchange a reputation for cheap and shoddy goods in the 50s for hi-tech and high quality in the 70s. Can China do the same whilst avoiding the fate of the Japanese economy in the 90s?

As the trip comes to an end, I’m left wondering - Why isn’t China happy to be Chinese? Perhaps it’s just a matter of time and soon enough we’ll all be buying western fakes of prestigious Chinese brands.

We certainly live in interesting times.