A friend of mine’s daughter has spent the last year in China, teaching English to high school students. She reports back from time to time and my friend shares her observations. She is in a small, by Chinese standards, town 500 miles west of Shanghai. Her observations are that this is a classic third world country with all the issues including heath issues, poverty, and sanitation concerns of a country in south east Asia or Sub Saharan Africa.
Of course, the Chinese love their knock offs. You walk down the streets and pick up a sealed box of software, Windows Seven, for 10 bucks, a new Armani Blazer for $50, and Coach bags for $25. CDs go for a buck. It has become so prevalent that if you want to buy an original, its impossible to know if the store you are in is selling them.
My friends daughter reports that there is now a black market in non knockoff items. The goal is to own a shirt or pair of trainers or a bottle of perfume that is actually made by the company on the label. And they will pay a lot for it.
My friend is visiting his daughter this week, and is bringing a suitcase full of Nike gear. Shirts, shorts, and shoes. All original, all from an actual Nike store. Not for her to sell, but to give to her new friends in China. She says they will be blown away.
The country has come full circle. They first ripped off original articles and made copies to sell to the world. Then the market has determined that the value of an article is in its original source, so now its middle class shuns the knock offs for the originals.
The government in China plays lip service to protecting brands, but it is lackluster in its prosecution of this process. Therefore many companies are reluctant to introduce or sell their products in China. This holds back innovation and destroys competition.
As for parking, a Chinese friend of mine imports high quality Austrian and Swiss parking equipment. He says that he can’t compete with the myriad of companies that sell knock off products at a quarter the price. However he does compete easily in high end projects (airports, high rise office complexes, etc) because the owners want something that they know will work and be supported.
In the next breath, however, he told me that he was opening a manufacturing plant to build Swiss designed and engineered equipment (he is the legitimate manufacturer of these gates, POF’s and dispensers) so he can compete on other levels. My guess is that he will be exporting in a few years.
More from China later