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08/30/2012

Book Review: What Chinese Want


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What-Chinese-Want

An understanding of the Chinese worldview is essential for anyone doing business or investing in China. We may think that we know what the Chinese want, but our assumptions are often faulty. Tom Doctoroff is well qualified to enlighten us. He is Northeast Asia area director and Greater China CEO at J. Walter Thompson, and has lived and worked in mainland China for 14 years. As an advertising executive, he knows how to hold our attention. He organized his recent book What Chinese Want: Culture, Communism and the Modern Chinese Consumer into short and focused chapters.

China’s primary goal is stability. This reflects a long history of traumatic change, including foreign occupation, famine, and Mao’s Cultural Revolution. The Chinese do not take survival for granted, and personal identity is tied to the family and the nation.

“Advancement always” is a core value in China. This is evident from the country’s dramatic economic growth, export success, rapid infrastructure development, and role in buying our government debt. What most of us don’t see are the conflicts between ambition and regimentation and between status projection and risk avoidance.

Non-Chinese find it hard to comprehend a “society in which ’individualism is suppressed but ambition is rampant‘ and a ’power structure that frowns on independent thinking and autonomous decision making.’” The mindset of the Chinese affects their business and economic practices and results. “The greatest managerial challenge creative agency leaders face in China is forging an environment of self-expression and innovative thinking.” The Chinese are great at “dazzling application” but poor at innovation. Unlike the Japanese and Koreans, they have not been able to create global brands.

The Chinese are fascinated by the United States. “American individualism is, in short, forbidden fruit, dangerously tempting.” The danger of this attraction is in its potential to undermine the stability that China sees as essential. However, the elite are very aware of the importance of individualism, of innovation-driven culture and education. Many send their children to prestigious American universities. This also reflects their insecurity about the future. As one of the elite said, “I am glad my family has Canadian passports.”

The growing Chinese consumer market is becoming ever more important for Western companies. An estimated 150 million people have middle-class purchasing power. Luxury brands, holding enormous appeal due to the status they convey, are “tools for career development.” This is somewhat reminiscent of 1950's America, where executives were expected to drive a Buick and live in prestige suburbs. Starbucks has built a 500-store business in China by creating “stores as upscale public destinations,” with “long tables large enough to seat professional groups eager to project new-generation affiliation in a public context and willing to pay for the privilege.”

Doctoroff believes that we just don’t get China. Providing many important insights, What Chinese Want can help us remedy this lack of understanding. Financial professionals should spend time reading it and pondering its message. It may well end up as a classic on the subject.

–Bill Hayes

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