ABOUT a decade ago, when one mentioned a “Made in China” product, there was negative perception among consumers. Products manufactured in China were labelled as cheap and inferior, if not fake imitations of those made in the United States, Japan and South Korea. That is no longer true in this age and time.
Lenovo, Huawei, Alibaba, Xiaomi and Haier are some of the most powerful brands that have come out of China in recent years. Lenovo was recognized as the world’s largest personal computer vendor by unit sales from 2013 to 2015.
Alibaba, founded by Jack Ma, is an over-achiever: the world’s largest retailer, one of the largest Internet and AI companies, one of the biggest venture capital firms, one of the biggest investment corporations in the world and remains as having the highest initial public offering at $25 billion.
Xiaomi is the world’s fourth-largest smartphone manufacturer. Haier has the world’s largest market share in white goods, or domestic appliance.
How did this happen? Let us have a brief review of earlier economic miracles in Asia. From the rubble of World War II, Japan patiently and persistently turned itself into a First World country because of keiretsu, the term used to describe the close bond among manufacturers, suppliers, distributors, and banks; shuntō or the annual wage negotiations conducted between big business and trade unions; the supportive attitude of the government; and shūshin koyō or lifetime employment in private enterprises. Kaizen or continuous improvement was a concept partly borrowed from the Americans, and was closely associated with The Toyota Way.
South Korea used to be a backward nation dependent primarily in agriculture. The dictator Park Chung Hee promoted industrialization in the ‘60s tapping chaebol, or strong family enterprises, to develop new industries with the government and the banking sector as partners.
Deng Xiaoping sowed the seeds of China’s economic miracle when he adopted the market economy in December 1978. By opening the Chinese market to foreign investors and reforming state enterprises, Deng may have set aside Mao’s “Little Red Book” to change the outlook of the citizenry. Local entrepreneurs soon developed into astute business people, who saw the potential of the rising middle class in China and later promoted growth outside of the borders and into the world.
Today, China ($14 trillion) is second to the United States ($20.4 trillion) as the largest economy in the world. Far third is Japan at $5.1 trillion.
The US must be feeling the heat, though, as shown by the hostile attitude of President Donald Trump to the Chinese leadership and, just this week, the arrest of Meng Wanzhou, Huawei’s chief financial officer and daughter of the founder. She was arrested in Canada and will be extradited to the US on charges of trying to evade US trade sanctions with Iran.