Friday, February 2, 2007

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Is economic protectionism on the rise in China?

That's the topic of Ariana Eunjung Cha's story in today's Washington Post. It starts out with an odd example, however:

"I know you don't know that you don't know."

Those insulting words, thrown out by a Chinese man to a Westerner, are the punchline of an Internet commercial that ends with a beautiful Chinese bride jilting her confused Western fiance for the Chinese hero.

The wildly popular video was created by Baidu, a Chinese search engine, to poke fun at its U.S. competitor, Google. It is but one of the growing signs that China is rethinking its stance on foreign companies and investment within its borders.

"Gee," I thought, "That's an odd example. There's no government action there -- it's a marketing campaign."

To Cha and her editors' credit, they do make this very point at the end of the story:

Richard Ji of Morgan Stanley Hong Kong said some companies have used China's new rules as an excuse for their own marketing or strategic shortcomings. He said that in the cases of Google and eBay, the companies' challenges have had more to do with failure to tailor the content of their Web sites to Chinese tastes and needs.

In the Baidu commercial about Google, the Western man begins by saying "I know" repeatedly as he stands, smirking confidently, next to his bride-to-be. But after the Chinese man bursts on the scene and the two get into a war of words, the Westerner becomes confused. By mistake, he says, "I know I don't know that I don't know" -- at which point the disgusted bride runs away.

So the commercial is "not about nationalism and protectionism," Ji said. "It says that it's localization that gives success. If you localize services, it means you understand the people you are selling to."

Read the whole thing. In between this vignette, there's some decent evidence that China is officially wigging out about certain forms of FDI.

UPDATE: Thanks to Mitchell Young for pointing to the Baidu commercial on YouTube:

The ad is a good example of the difference between economic nationalism and economic protectionism. The ad is clearly nationalist, and designed to foster a "Buy China" mindset, in part through rational arguments that Baidu is better than Google, and in part through cultural tropes designed to make the Western character in the ad look uncool. However, it's not an example of protectionism -- it's not calling for government intervention or relief, it's just trying to beat Google.

posted by Dan on 02.02.07 at 08:47 AM




Comments:

The article mischaracterises the ad by quite a bit. According to youtube commentators, it is a frontal assault on Google and that search engines difficulty in parsing Chinese -- a language which uses no 'white space' between letters. (And just looking at the commerical confirms this, I think!)Using this particular ad as hook on which to muse about Chinese protectionism is quite a bit off base. More like free market competition red in tooth and claw.

As to the subtext, it is certainly nationalist and even racialist. The 'Westerner' is dressed in (bad) nineteenth century costume -- no doubt recalling an era when Chinese were put upon by the Western powers, events still etched in the Chinese conscious. That the Chinese protagonist prevents a marriage between a fair Chinese maiden and a plodding caucasian speaks for itself.

Worse, the guai lo ends up spraying out red liquid (blood presumably) , collapsing, and on the ground twitching at the end. While the whole 'imagine if this was done to [insert group X here] ' is very stale, in this case it takes little imagination to foresee the outcry if roles were reversed.

I personally don't have a problem with this type of stuff, but it is obtuse for 'analysts' and scholars to deny the nationalism, ethnocentrism, and racialism present.

posted by: Mitchell Young on 02.02.07 at 08:47 AM [permalink]



In addition, the white guy speaks Chinese with an almost exaggerated foreign accent. In my line of work, I am surrounded by native English speakers (mostly white Americans) who can speak and understand Chinese - none of them sound as ridiculous as the voice in the commercial. In fact, Chris Tucker in the Rush Hour outtakes might have sounded better.

Mitchell Young nails the ad nearly perfectly. It is clearly racist and xenophobic. The foreigner with his broken Chinese has the audacity to challenge the Chinese "hero" when he doesn't have the ability to engage in an argument with anything but the phrase "I know." The wedding type setting, with the 19th century dress are clearly designed to stir up nationalism in its viewer.

I don't know how significant it is that the bride is wearing white rather than red, since it seems common enough for Chinese brides to wear western style wedding gowns today, but it may be worth noting.

The message of the ad is a (possibly) legitimate claim that Baidu's search engine has the best technology for identifying individual characters or compound words (think basketball versus the individual concepts of basket and ball) depending on the context of the search. I wouldn't know enough about the merits; I read very few Chinese websites and don't usually search in Chinese. Regardless, the ad is still clearly trying to sell the viewer on supporting Chinese-owned businesses for the main reason that the foreign-owned businesses are owned by, well, foreigners.

posted by: Shane on 02.02.07 at 08:47 AM [permalink]



The Baidu ad seems to be a parody of early Chow Sing-Chi comedies(aka Stephen Chow of 'Shaolin Soccer' and 'Kung Fu Hustle' fame) known for its play on words and slapstick exaggerations of Chinese culture. It's a pretty shrewd ad considering millions of young Chinese internet users grew up watching those films and imitating the antics.

I just don't think it as being overtly nationalistic. It's just playing on the popular fact (or myth) that Google doesn't stand a chance against Baidu for searches in Chinese.

posted by: YJC on 02.02.07 at 08:47 AM [permalink]



Anti-foreign business sentiment is on the rise in China, based on the somewhat true belief that foreign companies are given advantages
domestic companies are not. The tax rate is LOWER for foreign companies than for domestic companies, but since so few domestic companies come close to fully reporting, it is probably a wash.

What is really happening though is that the authorities realize the Chinese people want them to be tougher on foreign businesses than they
have been in the past so there has definitely been a marked uptick in terms of the enforcement of existing laws against foreign companies.

For many years, huge numbers of foreign companies (mostly smaller ones) would go into China and hire 2-10 Chinese employees and then never register the company at all and not pay employer taxes. Those days are rapidly ending as the Chinese authorities have definitely stepped up their enforcement of the company registration requirements and I personally have just within the last three months seen what has to be a statistically significant increase in th number of foreign companies
being shut down in China for having failed to register. I hate to sound heartless here, but as cheap and easy as it is to get legal in China,
these companies really have no excuse.

posted by: China Law Blog on 02.02.07 at 08:47 AM [permalink]



Anti-foreign business sentiment is on the rise in China, based on the somewhat true belief that foreign companies are given advantages
domestic companies are not. The tax rate is LOWER for foreign companies than for domestic companies, but since so few domestic companies come close to fully reporting, it is probably a wash.

What is really happening though is that the authorities realize the Chinese people want them to be tougher on foreign businesses than they
have been in the past so there has definitely been a marked uptick in terms of the enforcement of existing laws against foreign companies.

For many years, huge numbers of foreign companies (mostly smaller ones) would go into China and hire 2-10 Chinese employees and then never register the company at all and not pay employer taxes. Those days are rapidly ending as the Chinese authorities have definitely stepped up their enforcement of the company registration requirements and I personally have just within the last three months seen what has to be a statistically significant increase in th number of foreign companies
being shut down in China for having failed to register. I hate to sound heartless here, but as cheap and easy as it is to get legal in China,
these companies really have no excuse.

posted by: China Law Blog on 02.02.07 at 08:47 AM [permalink]






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