Saturday, March 05, 2011

The UFC and the Future of the Mongolian Wolf

The UFC might have just found their Yao Ming.

Since entering the Chinese market in 2009 with its initial broadcasting deal, the UFC has found the Chinese market tricky but full of potential in its future plans.

About a week ago when looking through my google news feed, I saw that a Chinese guy had just won a quick victory in the UFC. (video) Since then there has been an increasing amount of coverage in online and tv media on the "Mongolian Wolf," Tie Quan Zhang. The idea of a rugged Chinese guy beating up on the best fighters in the world really makes for good TV in China (just watch the movie 叶问2 that recently came out). He really might have the potential to be that spark that blows up the China market for the UFC.

Chinese people love their heroes and winners. In a country that only really cares about gold medals and being number 1 (theres even a mineral water brand thats the Chinese pronunciation of the English, "number one"), anyone who has the potential to be among the best in the world stage is quickly embraced and looked up to.

Yao Ming is famous by competing with Shaq in the NBA, Liu Xiang won the 1st gold medal for men in Olympic track & field, and Li-Ning built an entire global brand around his gymnastics exploits. Although Li Na and Zheng Jie are building the reputation for women's tennis, China really loves its male heroes. Thats the only explanation for the Chinese men's soccer team getting soo much funding.

This phenomenon this is a symptom of the Opium War/"century of shame" and Chinese male masculinity/identity issues. These issues influence society to the core - including current trends in growing male grooming products market. Chinese people believe that China has not re-assumed its rightful place in the world stage so any conquering hero that can assume this position (no matter how brief) is idolized. 

Not only can the Mongolian Wolf grow the UFC market access in China, his future potential for stardom and fame is greater than both Yao Ming and Liu Xiang. If he dominates in the ring in hand to hand combat, it will outshine winning any race or dunking on any player. Zhang Tie Quan is what the Chinese have been waiting for. And with a nick-name like Mongolian Wolf, how could he fail?

Tuesday, March 01, 2011

Soft Power and the Future of China's World PR

During the Hu Jintao summit in the US about a month ago, I was lucky enough to see firsthand the 60-second “Pro China” advertisement broadcasted both in NYC’s Times Square and the Chinatown area in Washington DC.

Promoted as a well-received commercial that better let Americans understand China by the Chinese media, this ad sparked a lot of debate in both countries. While it might have passed on positive feelings to some Americans, more than a few online commentators referred to it as China giving the US "the finger." While I agree that the ad might not had the effect intended by the Chinese gov't when it was originally designed, the actual act of making the ad forecasts a strong step forward in China's pursuit of soft power.

China has had a PR problem for some time now. I first noticed it in the Spring of 2009 on a week-long trip to Ghana. My mother was analyzing China's investment and influence in Africa with Ghana as a case study with a fellow professor who was from Ghana. I tagged along as it was a great opportunity to go better understand Africa.

During our visit to the Chinese consulate, we talked to 3 officers who discussed the threats and opportunities of Chinese companies in Ghana. While trading companies were booming in importing a lot of consumer goods from China to Ghana (much from Shenzhen), Chinese companies had made very little headway in the mining and coco industries. These were all dominated by European companies who had been here for a long time.

Most of Chinese business interaction in Ghana was in the form of loan-for-buildings. We visited sites all over Ghana that featured completed buildings and structures built by the Chinese. This included the national theater and the monument for the 1st Ghana president in Accra, a soccer stadium and a bridge near Tamale in the north.

We were also fortunate enough to visit a hydro-electric dam currently under construction a couple of hours outside of Kumasi - in the central part of Ghana.

In all of our visits and conversations with both local Ghanaians and Chinese workers and managers, there seemed like a communication disconnect between the two groups. Locals often complained about the bad practices of Chinese companies. The Chinese complained about the laziness of the locals and their not appreciating what the Chinese were doing for them.

As stated from the Chinese perspective, whenever there were any disagreements or individual problems with workers, those isolated people would immediately be given to the media and then pieced together to show how bad and manipulative the Chinese were. The people at the consulate felt that they were being portrayed unfairly and tried to do their best in better publicizing their investments and contributions to the local community in their newly established press office. Needless to say short articles stuck in the local news section of the newspaper didn't have much effect on the problem.

After my Ghana trip, I realized a few things:

  1. the PR industry in China will only grow in the future
  2. anytime a report on how bad Chinese investors are in Africa, S. America and other parts of the world shows up, it has a good likelihood of being created from the already established political discourse on China. (see this video from CNBC for more)
  3. any real progress in soft power will happen from efforts of individual companies and people - not from a coordinated central government agenda

The Chinese government has really tried make a coordinated effort to improve soft power in the world. Even before the NYC Times Square ad, China has tried to rebrand itself.  In the past few years, it has promoted Confucius Institutes in the world, established a CNN-style news network (creating it out of CCTV-9), created a Reuters/AP type organization within CCTV to sell comprehensive English reports to news outlets all over the world (my mom's college friend is a editor there), and even rolled out a Confucius statue in Tiananmen Square.

However, all of these government measures hasnt changed the fact that any mention of the Dali Lama will go directly to China's bad human right's record, and any event on Tiananmen Square will mention the riots of 1989. These government initiatives dont work as well as the indirect effects of individual companies. My friend in Beijing has tried to market Chinese indie films all around the world for the past few years. Her efforts to show a foreign audience an alternative side of China is an example of how small companies are contributing to Chinese soft power in various culture fields.

The best recent example of an ad that (I believe) is great is an Li-ning shoes commercial in the US. It came out around the same time as the NYC Times Square video, but definitely hits it out of the park in helping create a new understanding of China and Chinese people to the American audience. Only with commercials like these over a long period of time will any real soft power be created.

Thursday, January 27, 2011

RVs in China? Doesn't Make Sense

During my time “deep undercover” in Shenzhen, I saw that smaller Chinese companies really put an emphasis on foreign imported products, especially from Europe and the US. Higher class consumers have a lot of discretionary income and wanted the best products. This meant that imported goods were seen as the best.

This sentiment led a lot of small businesses to register their company, trademark their product and acquire businesses in Europe and the US. Now, businesses can claim that “this is a US product” even though Americans have never seen it. It doesn’t hurt that the RMB appreciation and depression of US/European asset prices are making things a lot cheaper.

China is a potentially huge market for many foreign products. Luxuries goods, cars, airplanes, vitamins, cosmetics, ect.  have all succeeded. This recent exuberance for the foreign products has quasi-blinded some business people in China.

One recent article I read in the LA Times titled "China has burgeoning market for RVs, entrepreneur says" made me laugh. 

China is hungry for the kind of recreational vehicles built in Southern California — at least according to the Chinese entrepreneur who struck a deal with a Riverside firm to build and export $5 billion worth of them.

The Chinese government has placed a focus on developing the RV industry as a cornerstone of the Chinese ideal of the happy home life, said Winston Chung.

"A family with an RV is a family more in harmony with each other," he said, speaking through a translator. "During vacations, people can get into the RV and enjoy quality family time."

Under Chung's agreement with MVP RV of Riverside, the company plans to manufacture the vehicles here and export them to China. However, Chung would not rule out moving operations to China in the future.

Chung spoke about the burgeoning market in China for the motor homes after a news conference with UC Riverside Chancellor Timothy P. White, where they announced Chung's $10-million donation to UCR's Bourns College of Engineering.

In an interview with The Times, a smiling Chung cheerfully detailed his plans to build and export 30,000 diesel-powered motor homes to China, and eventually to develop electric-powered RVs. Chung, 52, is the founder of battery maker Winston Global Energy.

The nascent Chinese RV industry has the potential for high profit margins, despite high taxes on gas-guzzling vehicles, Chung said. He added that the increasing value of the yuan, the Chinese currency, will make buying an RV more affordable for families. 
Yes. These RVs would be more affordable, but who would buy them?? Let's analyze.

  • China has 1.3 billion people in a limited amount of space. People all live in high-rise apartment buildings to save space. Even those people who bought traditional American houses are squeezed together to an uncomfortable small area. There is just no room to park these things that would actually make sense unless its in a parking garage - but thats expensive.
  • People in the US enjoy RVs for camping and exploring the country - esp in the midwest and western US. It takes advantage of the cheap(er) fuel prices and the interstate highway system with the comfort of your own hotel-room RV. In China, tolls for the freeways are very expensive and the gas isnt cheap either. It doesnt make sense to travel via RVs since trains, long distance buses and plane travel is so convenient and public transportation and cheap taxis are available everywhere. Also, hotels are cheap as well. 
  • Mostly older people in the US have RVs. Chinese old people dont know how to drive.
  • The people with the most RVs/Trailer homes in the US are for the poor. However, I dont foresee poor Chinese people choosing to live in RVs rather than their houses. 

To me, RVs just does not make sense in China. However, if Mr. Chung and his company, Global Winston Energy bought the company to cut costs and sell to US/Canadian consumers (just like Chinese car maker Geely bought Volvo), that would make some sense.

Otherwise, what are you thinking??

Tuesday, January 25, 2011

The New US Sputnik Moment

On the eve of Obama's State of the Union address, there are reports that he will center his speech on the theme of our generation's Sputnik moment.  
"Half a century ago, when the Soviets beat us into space with the launch of a satellite called Sputnik, we had no idea how we'd beat them to the moon," Obama will say, according to excerpts released by the White House. "The science wasn't there yet. NASA didn't even exist. But after investing in better research and education, we didn't just surpass the Soviets; we unleashed a wave of innovation that created new industries and millions of new jobs."
The contemporary Sputnik moment that exists right now is the competition with China. 

When international tests revealed that students in Shanghai ranked first in math and science in December, it stunned educators. Amy Chua then jumped on this sentiment with a provocative op-ed in the WSJ titled Why Asian Mothers are Superior to promote her new book, it created a fierce national debate that brought out the "USA! USA!" chanting American defenders/Chinese critics, herehere and here.

Although there could be debate on the validity of this the best way to teach children and the actual competitiveness of US education, the underlying theme is clear. While US kids are playing video games and out having fun, Chinese kids have private tutors and Sunday classes. While the US is cutting education budgets all over the country, China is increasing its own. No debate will change the fact that Chinese Confucian culture puts greater emphasis on education. Below is a great clip of Nicholas Kristof discussing this issue.

Thomas Friedman actually first started the Sputnik discussion in an op-ed in late 2009 addressing China's huge investment in green energy with governmental support.
without declaring it, China is embarking on a new, parallel path of clean power deployment and innovation. It is the Sputnik of our day. We ignore it at our peril.
This sentiment has prodded both the Secretary of Energy and Commerce to refer to the Sputnik challenge in renewable energy, investment in infrastructure and high tech computing in recent speeches. 

While the US is bogged down with its fake repeal of "Obamacare", partisan bickering, tax cuts for the rich and bureaucratic hoops, China is strongly supporting the future renewable energy sector. Hopefully Obama can utilize the unifying sentiments from the Tuscon shooting and focuses it on the country's future. Who knows if the Republicans will listen. 

Friday, January 21, 2011

US Press Makes Hu Jintao Sweat Over Human Rights Question. Really??

I have been eagerly watching the coverage of the Chinese President, Hu Jintao, and his state visit to the US for the past 2 days. It has been made a big deal by media in both countries and occurs at an interesting point in China/US relations as China is now the 2nd largest economy in the world, surpassing Japan.

I read all the articles I could find online from Foreign Policy, Time and other sources to give me a sense of public discourse on the subject. Not only did I find more ideas for future blog posts, it gave me a feel for how the US viewed this visit and what the media wanted to accomplish.

The thing that most stood out before President Hu's arrival was the inclusion of a media press conference held with Obama. Multiple media sources stated that this was a concession the Chinese had to make in order to "get the State dinner." It would also be a symbol for human rights and free press to see the red China president take questions from a free media.

As the official "day of pomp and ceremony" arrived, I waited for the highly anticipated joint press conference. After brief opening statements from both leaders, 2 US and 2 Chinese reporters would be called to ask questions.

When the 1st US reporter began to ask his question, I knew it would be on the issue of human rights. It fit perfectly with the "finally, we can put him on the spot" mindset established in the US media. After the reporter asked his long question to Obama, he asked Hu:
How do you justify China's record, and do you think that's any of the business of the American people?
In reality, this was a softball question. It fits perfectly with (what I believe) the established Chinese answer:
A major part of human rights is providing citizens with food, shelter, jobs, healthcare, ect. and China has done that by lifting 500 million people out of poverty in the past (whatever) years. And no, its not any of your business because we believe in non-interference wrt other countries' internal affairs.
However, as I anticipated this answer when Obama first finished his, there was only silence. Hu Jintao didnt answer the question?! Instead he stood their with a confused look while the US media waited for his answer. After a brief silence, he went on to take a question from the next Chinese reporter. 

I personally never thought he tried to dodge it. The question was too easy. Instead, I thought that he probably didnt hear it. After the first question was raised in English, Obama answered in a long monologue. Only after that was there a translation of the question and Obama's answer. The translator also SUCKED! Not only did he constantly stumble on his Chinese through out the press conference, he translated many things wrong and omitted a lot of content.

However, if Hu didnt answer the question, I knew there would be a problem.  The major news in the media following would focus on it and say, "we put him on the spot and he just dodged it", "thats what an commie does" and "thats why the US system is so much better", ect. That would be terrible for China's rep.

Thankfully, the 2nd American reporter addressed the initial human rights question. After explaining he didnt hear it initially, President Hu gave his answer.

Thank god he answered it or all hell would've broke loose or will it anyways?

Today, while reading coverage of the visit online, I stumbled on Dana Milbank's op-ed piece on the Washington Post. The response and description of the press conference from the day before was exactly what I had anticipated.
Something about human rights just doesn't translate for Chinese President Hu Jintao.

President Obama granted him the full state-dinner treatment that President George W. Bush denied him five years ago - but in return, Hu had to put up with a news conference, which he had refused to do when Obama visited China. For a repressive ruler, facing a free press is about as pleasant a prospect as attending the Nobel Peace Prize ceremony.

After the leaders' standard opening statements full of the blah-blah about bilateral cooperation, the Associated Press's Ben Feller rose and asked a gutsy, forceful question.

Obama answered. The translator translated. All eyes turned to Hu - who said nothing.

Instead, he looked to a woman from China Central Television - the state-run network that answers to the Communist Party's propaganda department - who tossed him a softball about "friendship and mutual understanding."

But the next questioner, Bloomberg's Hans Nichols, gave Hu a lesson in press freedoms (by addressing the first not-answered question). 

In Beijing, that impertinence would get a reporter jailed. But Hu wasn't in Beijing. During the translation of Nichols's question, Hu held a palm up and smiled, as if he couldn't see what all the fuss was about. "Because of the technical translation and interpretation problem, I did not hear the question about the human rights," he explained - falsely, as it turns out.

It was a good moment for the American press. Feller and Nichols put the Chinese leader on the spot in a way that Obama, constrained by protocol, could not have done. On Wednesday afternoon, Obama and the press corps were justifiably on the same side, displaying the rights of free people.

Hu, however, ignored that question in favor of the gentler one from his employee at Chinese television. As luck would have it, Hu was perfectly prepared for the question, and, in his reply, looked down to read statistics from his notes.

Reporters glanced at each other, puzzled over Hu's ignoring of Feller's question. During the interminable translation into Mandarin of Hu's answer to the Chinese reporter's question, Obama flashed a grin at Gibbs.

Hu, his forehead shining, had another plant waiting in the crowd, a reporter from the state-run Xinhua news agency. But before Hu could get that lifeline tossed his way, the microphone went to the American side, where Nichols demanded an answer to the human-rights question. This time, Hu couldn't claim it was lost in translation.

"China is a developing country with a huge population and also a developing country in a crucial stage of reform," he explained. "In this context, China still faces many challenges in economic and social development, and a lot still needs to be done in China in terms of human rights."

No wonder Hu doesn't like questions: He might have to give an honest answer.

Of course it was a good moment for the US press. You posed a hard hitting question and made the President of China squirm. You made him sweat and succumb to the demands of the righteously free media. USA! USA! USA!