We’ve written a fair amount about the emerging markets in the Far East and India, and it will continue to be a hot topic for many more years. It’s interesting to see how quickly the economic and political landscape has changed in just the last year alone. Google’s current situation is a telling barometer for how many other western businesses will fare in the near future in places like Beijing and Delhi. Business Week just recently ran a piece on China’s desire to limit the influence and impact of foreign businesses on Chinese soil.
The government has a new program entitled “indigenous innovation” which, as you can guess, consists of strict guidelines set up to benefit local Chinese businesses as opposed to foreign companies. Of course, this isn’t going down well in U.S. or the UK. But, it’s easy to see that after decades of just being the manufacturing muscle of cheap products for Western firms, China is blooming and wants to promote their own brands. This isn’t just a case of changing tastes and the Chinese tiring of the Big Mac; one gets the sense that, as we saw with the awesome opening ceremony for the Olympics a year and a half ago, it’s China’s turn to shine on the world stage.
There is also the pervading sense that after the current financial fiasco which left almost every nation buckled (except the Chinese), that countries like America and Great Britain don’t hold the same allure of impenetrable power any more. How could they? Both nations have been the equivalent of avaricious teenagers with Dad’s credit card, and now they have to pay off the bill. But is this curtains for foreign brands? Of course not, as the Chinese need to adhere to the WTO rules and will always need to keep trade channels open; but there is a definite sea change happening, and as the Chinese make greater technological advances, so too will they not need to look to traditional outlets like Japan and America for products and services.
It will become increasingly evident in the next decade that Chinese insularity will continue to force foreign companies to become more innovative about how they break into China’s markets. Clearly the days of dominating the brandscape just because you are British or American are over.