The Chinese Answer to The West – “Made in China” to “Made by China”

There is this flippant yet popular joke that goes like this: if you clone yourself four times, one will be Chinese! That says it all about the manner in which the world perceives the ubiquitous Chinese – populated and copycats. There’s no doubt, China has become numinously overpowering and has integrated itself into the lives of people all across the globe by their sheer human power and the power to produce goods and services at a prodigiously unprecedented pace and volume. So much so that from Greenland to Antarctica, and from Middle East to Europe, if one were to try and search the origin of the products used in these countries on a daily basis, in all probability the ‘origin’ would turn out to be China. Be it your cell phone or the laptop, or even the engine of your car, everything turns out to be made in China. An original iPhone or even its look-a-like (with similar or more features), both are made in China. In fact, all this is known. But what is mostly unknown is the infrangible might that the Chinese have garnered today with their home-grown products and brands. Not only is China manufacturing almost all goods for Western companies, but it also has gained a huge impelling momentum with its own domestic production. Today, stellar Chinese companies are topping various global lists in terms of revenue, market share, size and scale; but more than that, their sterling products are also acting as alternatives – or even better replacements – for Western products within and outside China. Today, the Chinese have a “Made by China” option with similar features and quality for almost every known Western brand, which are also anyway made in China.

Against the populist perception of China being a nation of cheap-labour export and copycats, China has emerged as one of the most innovative nations as well! When one goes to a top designer store in America or to the Disney Stores in Disneyland, all products in these stores are made in China, totally dispelling the myth that Chinese products mean coarse or low quality fakes. Everything, everywhere seems to be made in China, especially in the West. So much so that post 9/11, when the Americans had their national flag flying up and about almost everywhere, it was found out that most of these flags had been made in China! Obviously, as an Indian, it hits one hard since there is absolutely no such concept like “Made in India”, though as a nation we have some of the best talented individuals, many of whom are even running the world’s topmost companies now. That is why when Hillary Clinton comes to India and gives a motivation pill to Indians that they should look at a parallel role in this region along with China, and when the Indian media goes ga-ga over that, I feel like rolling with laughter! One reason why I started writing on China – and plan to write often – is so that Indians know where we could have been and where we actually are, shamefully. This piece actually doesn’t merit an Indian mention at all – so much is the telling Chinese superiority when it comes to “Made in China” as well as “Made by China”!

In the latest World Intellectual Property Indicators 2010 (WIPO) report, China figures as the third largest nation in terms of patent applications. China has applied for 203,481 patents in 2009 and around 492,008 between 2003 and 2007. To further their supereminent entrepreneurial endeavours and strengthen domestic companies, the Chinese government launched an “indigenous innovation” scheme and further declared it a national priority in 2006. This whole program was aimed towards encouragement of technological innovation in Chinese domestic firms and motivating them to own their proprietary Intellectual Property rights. Moreover, all science and technology based production has been continuously aided with huge tax incentives, credit facilities and budgetary support. On top of that, the products thus developed under the “indigenous innovation” program also featured as a priority in the government procurement lists. A 2010 US Chamber report titled ‘China’s drive for indigenous innovation’ states how China has climbed the ladder swiftly and made itself prominent in the field of science and technology. The Thompson Reuters Science Citation Index (CSI) placed 122,998 Chinese scientific papers in 2009, thus making them the third largest contributor. China also features as the largest contributor in the areas of engineering, genomics and nanotechnology.

Let me start the China story with an interesting anecdote. All those who followed the Beijing Olympics closely would have surely been impressed by former Chinese gymnast Li Ning, who lit the cauldron during the opening ceremony. But then, knowledge about the fact that this 45-year old, triple gold medallist of the 1984 games is actually the founder and owner of China’s biggest sporting goods manufacturing company – Li Ning Company Limited – is quite limited. Li Ning Co. is not only the biggest in China, but also has stores across the globe. During the 2008 Olympics, the company sponsored many sporting teams, besides sponsoring the Chinese teams. Today, it is the biggest competitor to Adidas and Nike in China and clocked in staggering revenues of $1.354 billion in the last year. As per the China Market Research Group Survey 2009, Li Ning and Adidas both had a 14 percent market share in China, which was just 3 percent behind the market leader Nike.

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Source : IIPM Editorial, 2012.

An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).

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