An Eye on China

China's brand image problem:it's a country full of counterfeits
Spectator, The, May 13, 2006 by KYNGE, JAMES

Augustus the Strong, the 18th century king of Saxony and Poland, is an unlikely but fitting metaphor for a rising China.
Fitting because Augustus was as weak as he was strong. A bear of a man, he is said to have fathered 356 children, commanded large standing armies and ruled his dominions with uncompromising resolve. But his weaknesses, like those of China, grew out of his strengths. The passion he felt for his lands and his women sprang from a devotion to beauty, and that devotion also sired a sickness that Augustus called his 'maladie de la porcelain'. He was bewitched by Chinese 'blue and white'. The objects of his desire all had to be imported from China at enormous cost; porcelain in those days cost almost as much as gold, and Augustus even sold soldiers to neighbouring potentates to finance his frailty.

Three centuries later, new configurations of money and power have created an echo of Augustus's time. China's strength in manufacturing has generated the wealth to fuel a new cohort of collectors. But a national devotion to copying, which has helped propel the ascent of its manufacturers, has made for an antiques minefield strewn with forgeries. Even the vendors at Panjiayuan and Hongqiao, Beijing's sprawling curio markets, acknowledge that their stalls are crammed with artifice -- lastcentury imitations of earlier artefacts, pieces 'in the style of', reproductions and outright knock-offs. Genuine collectors are left with little option but to forage abroad for items that left China during the days when Augustus -- as well as Louis XIV, Monet and Oscar Wilde -- had an eye for chinoiserie.

The outflow of Chinese money to New York, London and elsewhere is not inconsiderable, and the prices that rarities fetch at auction often surpass their estimates.
Eyebrows were raised in 2004 when Giuseppe Eskenazi, a London dealer, paid a record $5.7 million for an 18-inch early Ming dynasty dish at an auction in San Francisco. Since then, the trend has attained a broader base, as wealthy Chinese travel to Europe and the US searching for items with reliable provenance.

Furniture from the Ming and Qing dynasties, snuff bottles carved from precious stones and even ornate clocks made by European craftsmen for the Chinese court in the 18th century are in ever greater favour. In sitting rooms all over Western Europe, people are taking a closer look at their heirlooms (that blue and white vase which a great aunt made into a table lamp) and wondering what a dealer might pay for them. The answer, in many cases, is a fair amount. Anita Gray, an oriental ceramics dealer in London, is clear about her sources of supply and demand. The demand is increasingly from wealthy Chinese. The supply is mainly from quiet homes 'in the west country or up north'. 'I don't buy anything from China, ' she says. 'You can't trust anything from there to be genuine.'

It has become a cliché to observe that China is the workshop of the world. Less well known, though, is how little manufacturing benefits many of the Chinese companies that toil away in the deltas of the Pearl and Yangtze rivers and in hundreds of smokestack cities in the interior. Foreign corporations, by contrast, often reap handsome profits from employing workers here at industrial revolution wages to make the stuff they export to Westerners familiar with their products. This may seem unjust, but it is a reflection of the reverence that global capitalism reserves for brands. When you buy a pair of brand-named running shoes, the factory that made them (usually in China) typically gets about 2 or 3 per cent of the money you paid. The rest goes to the retailer, the advertisers, the marketing men and, above all, the brand owner. What some customers may not realise is that with running shoes, as with a thousand other products made by contract manufacturers in coastal China, the supposed difference between brands is largely illusory. In factory after factory that I have visited the products of one well-known brand are made on the same benches, by the same migrant workers with virtually the same materials, as those of an arch competitor.

But if Chinese companies such as Galanz -- which makes nearly half of the world's microwave ovens -- can make products much more cheaply than the brand holders they supply, then why don't they start selling things under their own brand around the world? No doubt the answer has many strands, but one aspect concerns China's own brand image. To many of the West's consumers, the 'China' logo just does not cut it. It carries associations of cheap labour working in inhumane conditions in a communist country full of counterfeits where human rights are abused. A poor image costs the country dearly, as Beijing is keenly aware. But if the Communist party's mandarins have calculated correctly, a makeover is on its way. The 2008 Olympic Games in Beijing are to be the stage for the most expensive rebranding in history: an estimated $38 billion has been earmarked for sports venues, urban renewal and improvements in infrastructure. London, by comparison, is set to spend a cheeseparing $16 billion to prepare for 2012.