Thursday, December 09, 2010

Prepositions in China Product Labels Tell It All: Good Bye Country of Origin, Hello Country of Destination

1 articles to go: IP Dragon on its way to its 1,000th article

The world is flat according to Thomas Friedman, and therefore the determination of the country of origin of most products is becoming more complex. So what should be put on the product labels? Below a short history.

Made in China
The probability that any given product has a label 'Made in China' (中国制造) is quite high. Because of some lethal food and drink scandals and recalls, its reputation was dealt some major blows. Dirk Lammers wrote in 2007 an article for about the effort his family made to avoid one week products with the label Made in China. Read here.

Made with China
To associate China products with Western quality, a "co-branding" campaign was started in 2009, under the banner of Made with China. As you can see in the video: Made in China, with American sports technology, Made in China with European styling, Made in China with software from Silicon Valley, Made in China with French design. Read also Jin Zhu's China Daily article about a static advertisement during the Shanghai F1 Grand Prix, in April 2010, here.

World Trade Organization (WTO) General-Director Pascal Lamy was trying to ion out trade disputes bubbling up, and invoking David Ricardo's theory on comparative advantage,
to put it into perspective. Mr Lamy used the example of an iPod.

"According to a recent study, it has an export value of $150 per unit in Chinese trade statistics but the value added attributable to processing in China is only $4, with the remaining value added assembled in China coming from the United States, Japan, and other Asian countries."

Read Mr Lamy's speech of April 2010 here.

Made for China identified eleven trends in 2010. On number 11 is Western products and brands that are adapted and specially 'made for China, if not BRIC'. The explanation is that Western companies want to profit from the economic growth in China by leveraging the perceived quality of Western goods and brands. An example is Shang Xia, a new brand of French luxury house Hermès.

"Affluent Chinese consumers prefer foreign brands: 52% of consumers whose annual income exceeds RMB 250,000 (USD 36,765) trust foreign brands more than Chinese ones while just 37% said they prefer the latter. (Source: McKinsey, September 2010)"

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