Memo #49
Karl Gerth – karl.gerth [at] history.ox.ac.uk
Thanks to President Hu Jintao’s visit to Washington this week, US-China trade tensions are again front page news. There are bright spots: Seattle-based Starbucks recently announced plans to triple its number of stores in China to 1,500 by 2015. And the chain plans to use its outlets there to push more consumer products, including instant coffee.
But why should readers who aren’t either US officials or coffee drinkers living in China really care that Chinese are changing where they shop and what they buy? The issue involves much more than trade deficits, bilateral relations, and Frappuccinos.
Countless small changes in Chinese consumer habits such as buying a Starbucks coffee or starting to wear designer clothing are collectively having massive global impacts beyond trade statistics. Chinese learning to desire expensive lattes is a small part of a much bigger picture. Hundreds of millions of Chinese adapting consumer lifestyles similar to those of industrialized countries is deepening the global commitment to consumer-driven economies and cultures.
As China continues to participate in the world economy, their brands will change global consciousness and lifestyle in the coming years and decades in the way, say, Sony or Google have. Today, you may not be able to name any Chinese brands but wait a few years or even a few weeks. In one week in December 2010, six of the nine companies scheduled to conduct initial public offerings (IPOs) in New York were from China (and a seventh was from Taiwan). This included China’s answer to Amazon, Dangdang.com.
China providing countless new brands, products, and shopping experiences is a bit of the good news. But there are also serious downsides. Global markets, including in Canada, may increasingly look like Chinese markets and become rife with counterfeits. Imagine buying a Coke and not trusting what is in it. Likewise, as the newly wealthy in China buy the things they want, they are consuming into the extinction of entire animal species. Your local aquarium may not be as interesting a place without the shark exhibition.
Big and small, these and countless other tremendous and diverse global changes underway are all triggered by Chinese consumers. Perhaps, then, it is the Chinese people who are driving global changes rather than the political elites whom we usually read about in the news.
About the Author:
Karl Gerth is a Oxford University historian of modern China and former Peter Wall Institute Visiting Researcher at The University of British Columbia
Links:
- As China Goes, so Goes the World: How Chinese Consumers Are Transforming Everything, Book by Karl Gerth, November 2010
- A review of Karl Gerth’s book
- China: The next branding superpower?, CNN Money, November 2010 (op-ed by Karl Gerth)
- The Past, Present & Future of Consumerism in China – Interview with Karl Gerth (Part I & II), The China Observer
- China’s all-you-can-buy buffet, Interview with Karl Gerth, CBC Radio, December 2010.
Related Memos:
- New Taxation Rules: First Steps to Building the Great Mall of China? by Vickie Yau (Memo #46)
- Our other Memos about China and the United States