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Beyond Branding is written by members of The Medinge Group

The Beyond Branding blog

June 09, 2005

What Chinese economic growth? 

I'm not saying it won't happen, but I've never been a believer in this idea of a growing Red China. Call me one of the minority. Didn't believe it in the 1990s, don't believe it now.
   I was reading in The Epoch Times, where Zhong Wen spells out a simple truth, expected from freedom-hating nations like Red China: 'Under the CCP’s [Chinese Communist Party’s] autocratic system, much of the national wealth seems to have ended up in the laps of corrupt government officials, especially since state-owned properties are severely over-valued. The actual wealth represented by each unit of renminbi is much lower than its face value.'
   I don't think there's anyone out there who didn't know that, yet it's conveniently ignored by those pouring funds into Red China right now.
   I do know the average Joe Chang isn't any better off today compared with 15 years ago, or even the days before Tiananmen (which Beijing says did not happen). My father's own visit behind the Bamboo Curtain in 2003 confirmed much of it. He told me about state officials with nothing better to do than order a mountain excavated, for no apparent reason. The fact my great-grandfather was buried there was irrelevant.
   As much as the Politburo wishes for Red China to be seen as a major nation, it's still quite closed-minded. After approaching me to speak in Shanghai in September, I revealed to the Communist agency extending the invitation that my grandfather served with Gen Chiang Kai-shek in the Chinese Constitutional Army in the 1930s and 1940s, just out of transparency. I was not approached again; no reply, nothing, which is what I expected (nicer than getting arrested at the airport). The country with the world's biggest air force, scared of me. Like I would really pose a threat to armed members of the People's Liberation Army.
   Don't even get me started on the MG Rover débâcle, which I put down more to Politburo fears than a lack of desire for the parties to get together.
   When it comes to brands, Red China has a long, long way to go, even if some of them (Lenovo, Haier) are making the right moves—because fundamentally, state honesty and transparency need to go together with the successful expansion of Chinese firms.
   But are we meant to trust Chinese brands? For all those writing editorials about how American brands are in the toilet because of anti-Bush feeling around the world (I am sceptical of this, too—it's another story), then that rationale must equally apply to Red China. (However, the same people never mention this. Odd.) For a country with a dismal human rights' record, should we trust Red Chinese brands? Or can Red Chinese CEOs overcome governmental misbehaviour?
   For the sake of one billion decent people, I hope so, but it isn't going to be easy.
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