China Emerging_ 1978-2008 - Xiao-bo , Wu [36]
Clearly, this way of thinking about reform was radically different. It signified that the reform of state-operated enterprises was shifting away from the transfer of authority, and in the direction of structural adjustments that involved “supporting the key ones and letting the rest go.” A tremendous furor followed. After 2003, the results of this reform became quite apparent.
Around 1995, a number of famous entrepreneurs and brands emerged in the areas of health products and home electronics. Both these business lines were controversial.
Price Wars
D
uring the World Cup soccer games in the summer of 1994, CCTV broadcast a 45-second, short but stirring advertisement on prime time. People saw ice breaking up on the Yellow River, heard Chinese gongs along the Great Wall, and watched an oriental-style lion proudly raise
its head and roar at the sky. The images and wording of the commercial were calculated to stimulate emotions. The whole experience served as a kind of collective oath by Chinese enterprises to charge forth and succeed.
This began with health beverages. Entrepreneurs in this industry often came from farming backgrounds, but they were highly attuned to the psychology of consumers. Foreign brands as well as companies from Taiwan and Hong Kong had long been selling in China; however, these homegrown salesmen were masters of advertising strategies, sales networks, and price points. They quickly took over local markets throughout China with the creativity and certainty of a native.
The success of the health beverage entrepreneurs stimulated people to think that other industries could succeed in a similar fashion. The economy was growing and domestic consumers were the target: there appeared to be an unlimited market that was not only expanding but was also apparently without limit. “Expand, expand again!” was the catch phrase of consumer industries. This sparked the first wave of diversification in China as companies blindly rushed to capture markets and grow through mergers and acquisitions.
As China’s entrepreneurs were collectively displaying theirvigor,multinationalcompanies were marching into the country wearing steel-plated armor. In 1993, China entered the International Copyright
“Health product” companies pursued a marketing strategy of blanketing the countryside with advertisements. The verb used was “paste,” as in pasting ads on every wall, every telephone pole, and every pigpen railing. The photograph shows an ad for the product “Heart K,” which was meant to “fortify the blood.”
GM automobile comes off the assembly line.
“Thank you, China. Made in U.S.A.” An interesting banner was hung up when 1,985 Chevrolet cars were imported from the United States to the port in Tianjin on August 7, 1993.
Convention, and the already famous Disney character, Mickey Mouse, or “Mi-Lao-Shu” as he is known in China, formally and officially entered the country. However, along with the smiling face of Mi-Lao-Shu came the iron jaws and sharp teeth of multinational lawyers.
In 1993, Kentucky Fried Chicken opened its first outlet in the city of Xi’an, with a special operating permit. Procter and Gamble set up four companies and five factories in the same year, in one swoop. The world’s largest beer company, Anheuser Busch, spent RMB 1.64 billion to purchase 5%ofChina’slargestbeercompany,QingdaoBeer.Kodaksponsoredthefirst East Asian Games in Shanghai; Nokia began to supply GSM mobile phones to China; and Citibank transferred its regional headquarters from Hong Kong to Shanghai. Boeing made a large amount of money in China in 1993, with an order for 120 planes that was said to be valued at US$9 billion. The senior executive in charge of international business for Ford declared that his primary responsibilities were related to China. Japanese investments in China grew rapidly in