nation branding in china

Running head: NATION BRANDING IN CHINA AND ITS EFFECTS 1

Nation Branding in China and its Effects

Name

Institution

NATION BRANDING IN CHINA AND ITS EFFECTS 2

Abstract

Nation branding is a simple yet powerful tool in building a country’s economy. This

paper examines the concept of nation branding in China, with a special focus on how it impacts

its economy and the global market demand for its products. China’s nation branding efforts are

attractive and persistent in advertising the nation as a ‘brand.’ The paper provides information

regarding the Chinese cultural heritage, tourism, its television and media exports, public relations

and trade relationships as methods used to promote the country’s brand. Moreover, with statistics

from reliable sources, such as the National Bureau of Statistics of China, the paper gives further

explanation as to how China’s nation branding has impacted on its economy (considering its

Gross Domestic Product and the purchasing power parity) and the demand for Chinese products

from the rest of the world. This study ends with a critique of nation branding efforts by China

since this strategy may not always provide the expected outcomes the country expects from

creating a good image among households in different parts of the world.


Introduction

It is a country surrounded with a vast sea surface in the eastern part of the Asian

continent. With its scenic mountains, green forests and its ever busy cities (which have been

referred to as concrete jungles), it has managed to capture the rest of the world’s attention. It is

located in the western shores of the Pacific Ocean thus having a long beach strip for everybody

to enjoy the prevailing westerlies winds blowing towards the land. It is known as the home of

ancient civilization and the large population of citizens in the country have been able to uphold

and appreciate these ancient ways to the present day. Its ancient civilization is the reason behind

its great cultural values which are even spreading across its boarders.

Of course, China has a great influence to the world and making up your mind to go on a

vacation in any of its cities, say Shanghai, will give you the best experience in your lifetime

(Huang and Chen, 2015). Take a trip across the country and you will meet people who will

welcome you warmly and ready to share their cultural beliefs and feelings with you. Its

proximity to large water bodies assures you an array of sea foods, some of which are considered

outrageous in different corners of the world (Frederick, 2012). The likes of the Chinese ‘sushi’,

lobsters, slugs, frogs as well as snakes are commonly found in their restaurants and fast food

shops. With the great deal of attractive features China has, this paper seeks to explain how and

whether nation branding affects the demand for China-made products and its economy.

Literature Review

Background

China takes the third position among the largest countries in the world after Russia and

Canada. It is the most populated country in the world with also a large number living outside its

borders (Fang, Wang and Dewen, 2011). China is a communist country and its leadership

structure is divided into three branches; the Chinese Communist Party (CCP), the military and

the local government. The country has a strong cultural background and its early development of

education has resulted in a high literacy level of approximately 97 percent among its citizens.

According to In Leung and In Ruaan (2012), knowledge regarding fine art, theatre arts and the

art of Chinese Kung Fu has been passed down from generations and this has contributed to the

current way of life among them. Since knowledge is power, China has evolved into a


technological giant in the world and this is exhibited by the variety of products manufactured and

shipped across the world for material use (Backaler, 2014). These products include motor

vehicles/bikes, factory machines, computers and sophisticated computer programs, clothes, food,

medical products, the list is endless.

The world has recognized China for its amazing technology inventions, despite facing

competition from countries such as Japan, Russia and the United States. It is not hard to find that

over 70 percent of household materials bearing the label ‘made in China’ and this has really

enhanced the country’s image (Pan et al., 2012). This brings us to the nation branding strategies

done by China. Apart from technology products, China’s awareness has been mold by the

tourism sector, film productions, deployment of Chinese workforce in other countries for

constructive and skilled labor purposes, textile productions and food products.

Rationale

China has been using national branding for a very long time, ever since the world wars

era. Having mastered the secret behind nation branding, China has well utilized the strategy to

gain itself economic development. Its people have been prioritized all over the world to carry out

most technical activities, such as construction of buildings and roads which require top level

engineers (Dahlman, 2007). As well as economic development, China has been able to gain

socio-cultural development as we have seen the Chinese language being learnt in numerous

places (Basu and Bandara, 2009). The country has been able to maintain its high population by

adopting poverty eradication strategies. A large number of tourists have visited the country to

enjoy the beautiful scenery it possesses and the luxury lifestyle on the high end locations in

China. All these benefits that come along with nation branding have made China the second

greatest economy in the world despite the cycles of depression and recession it may have faced

in the past two centuries as stated by Chow, (2012). It is the second greatest importer and the

largest exporter of goods in the world (Earnshaw, 2004). In addition, China currently bears the

record of the largest army with the second greatest defense budget, states Cardenal and Araujo

(2013). These are really high standards for any normal country to attain. Thanks to national

branding, China has such outstanding records.


Objectives

This paper aims to uncover whether national branding affects the Chinese economy and

the demand for its products. It seeks to answer questions such as, how does China carry out

national branding? Does its economy depend on it? Is it really effective in the nation’s growth?

This will be done by describing the national branding process and how it is applied to create the

country’s image. The paper also provides information about how China’s national branding is

perceived by other nations.

Outline

This study shall be used to device whether the country should engage in more national

branding activities. It shall also determine the advantages and disadvantages of national branding

towards a China’s economy. The paper also provides a basis for positive criticism and finding

out the trends of this promotional strategy in modern and developing countries.

Definition of terms

Nation branding is the activity which aims at measuring, building and managing

countries’ reputations. Aronczyk (2013) clarifies that this involves increasing the significance of

the value of their products by laying emphasis on their distinct features.

Country of origin is a term almost related to nation branding referring to the country

which has either manufactured, produced or written an article about something (Wachter, 2003).

Purchasing power parity (PPP), with reference to John Wiley & Sons (2015), is the ratio

between two countries, say country X and country Y, showing the amount in units of currency of

country X required to purchase the same volume of specific goods or services in country X as a

single unit in country Y’s currency to purchase in country Y. either of the country’s currency can

be used to measure PPP, but they are mainly expressed in terms of US dollar currency.

Knockoff products are the same as counterfeit products and these are products which are

exact copies of the original products sold in the market (Phillips, 2007). They usually initiate a

case of intellectual property rights.


Nation branding in China

Billions have been spent by China in efforts to promote itself all over the world. This

strategy has so far appeared to be successful in improving its environment for international

opinion. Both the government and the public have found national branding to be valuable to their

public identity as the country seeks status, respectability and recognition from the globe.

National branding is related to ‘soft power’ which is applied by countries trying to penetrate

beyond their national boundaries and China has used this by targeting the household audience

using household products, international broadcasts and film movies. Let us look at the measures

taken in different sectors to promote China’s national brand.

Methods of Nation Branding

China uses different methods to create an international image in order to gain competitive

advantage in the economic sector. These methods are discussed below.

Cultural and tourism branding

Culture is all about the social values and the way of life among people. Different

countries have different cultures whereas China is well known in the world to have an ancient

complicated culture and it has effectively used this is a strategy to brand itself. The Chinese

culture is of high regard among the international audience and this is as a result of the country’s

approach to the world with openness that is unprecedented. It is considered to have been an

advanced country during the ancient periods and it has since developed while preserving its

cultural heritage. Foreigners who know about China are friendly toward the Chinese people

because they have a special opinion about China.

Secondly, tourism has also contributed to the Chinese national branding. The brilliant

skyscrapers, the old buildings and temples, old towns and the beautiful geographical features that

China has been blessed with attracts a large number of tourists mostly from Europe and North

America. The must-visit places by tourists in China include the Yellow Mountains, Beijing, and

Shanghai and the Great Wall of China. On top of that, tourists enjoy the hospitable

accommodation provided to them during their visit in the country.


Television and media export branding

Approximately 90 percent of the world first heard about China through films and

international broadcasts in their television sets. Television and media exports have contributed to

the nation’s branding as people have been able to acquire both valuable information from

international news channels and entertainment programs courtesy of China. The main

international news channel in China is the Chinese Central Television (CCTV) through which

the country uses its citizens to broadcast global current affairs to the rest of the world so as to

gain viewers from different nations while keeping the main themes revolving around China.

Although it is difficult to control a country’s brand image, China tries to keep in check what

other media broadcasts have to say about its country so as to avoid their image being tarnished.

Media exports always contain positive content about the lifestyle in China thus creating a good

impression.

Education and sports

The flexibility and reliability in China’s education systems to students in and from other

countries also contributes to the nation’s branding. Chinese colleges have been developed in

other continents so as to foster and promote Chinese studies and teaching Mandarin to people

from different races. For example, the European Association for Chinese Studies is in charge of

Chinese studies activities in Europe and it has allowed students to also get career opportunities in

China. Student exchange programs have also been taken up and they have provided an

opportunity for other students to get scholarship opportunities to study in China.

Sports programs have also been useful in spreading the country’s awareness. Let us flash

back to 2008 when China hosted the 2008 Summer Olympic Games, better known as Beijing

2008. The world’s attention was on China and that year had the country flooded with external

visitors to not only cheer their countries as they participated but also to explore China. To add,

Nike partnered with the International Sports Group-China (ISG) to provide sports education to

international students. This has been done via the sports camp which involves unique and

premium quality sports programs. Also Regular Training Programs (RTP) are offered to support

beginners. This has attracted various sports students from across the world.


Business relationships

Business is very significant for a country’s success and China has capitalized on this

sector. China has various international business relationships most of which are beneficial. For

example, due to their vast knowledge in building complex infrastructure, Chinese contractors

have been deployed in various parts of the world to build bridges and tall skyscrapers in major

cities and they have performed with perfection. Being the second largest importer and the largest

importer of volumes of goods and services in the world, China has proven to have thriving and

reliable business relationships and their partners would always wish to have subsequent

transactions with them. Why? This is because China has high level of expertise and knowledge

and they have produced quality products which have earned them quite a reputation.

Of equal importance here is that China has favorable trade policies which suit the relative

countries which are in business agreement with them. Countries which are unable to pay for the

goods and services provided to it by Chinese firms are welcomed to pay these arrears by

exporting products of equal amount to China at a discounted price so as to clear public debts.

The country also uses the ‘country of origin’ branding in its exports which increases brand

awareness among its importers and provision of quality assurance.

Public relations

China has been actively participating in both Asian and global affairs. Back in 2013,

China’s president Xi Jinping made it clear that as China follows the peaceful development path,

it seeks to assume further international responsibilities and be more present in international

system reforms and affairs. He added that China is an agent of constructive development of other

nations and promotion of peace. This was during a conference held with the 21st Century Council

with the theme ‘Understanding China’ that lasted for three days. Despite the development

problems China has been facing, we have seen the country keep its words by efforts to promote

shared security in different parts of the world. This is evident in its operations to counter piracy

in the Gulf of Aden which also aims at protecting its national interests.

Furthermore, China’s Ministry of Commerce (MOFCOM) has a Department of Foreign

Aid which coordinates with the Ministry of Foreign Affairs to ultimately administer the

country’s foreign aid programs. On behalf of the Chinese government, it has managed to offer


zero-interest loans, grants, technical assistance and youth volunteer programs, which have

contributed to foreign development.

The effects of Nation Branding on demand for China’s products

The nation branding methods have been employed by China with an aim to increase the

demand for its products. Despite the criticism it has received from other countries, China

managed to gather an increase in exports by approximately 49 percent in the period between

2010 and 2014. This is equivalent to 2.342 trillion US dollars of which 66.9 percent comes from

its top exports which are machines, electric equipment, furniture and lighting, textile products,

medical technical equipment, plastics, gems and precious metals, vehicles and steel products

(Workman, 2015). However, this significant increase in such a short period has not been able to

match its overall exports which are in decline at a rate of 6.8 percent per year from 1983 to the

present time. The average of Chinese exports is 542.41 US dollars while its highest export

demand is 2275.13 US dollars which was acquired recently in December 2014. The graph below

provides a reflection of China’s monthly exports from November 2014 to 2015.

The impact of nation branding toward the demand for Chinese products can be accounted

for by each product in the following ways. First, electronic products have contributed 24.4

percent of total exports costing a total of 570.9 billion US dollars. The second highest export is at

17.1 percent of China’s total exports, contributed by machinery, pumps and engine equipment

costing 400.8 billion US dollars. The remaining 41.5 percent is catered for by plastics, vehicles,


gems and precious metals and other export products. There has been a rapid increase in demand

for precious metals and gems from China in the previously recorded 5 years, whereas machinery

recorded the least increase. Plastic products demand have steadily increased taking the second

position for the most increased exports in form of caps and lids.

China has various trading partners globally and nation branding has strengthened the

relationship between them. Considering the lucrative trade relationship between China and

Africa, there is high demand for Chinese products from these countries which are mostly on their

development stages. To mention a few, these countries include Ghana, Kenya, the Sub-Saharan

countries, Nigeria and South Africa. African countries are impressed by the expertise, quality

goods and services have been provided by the Chinese investors and this has seen more and more

consumer goods being imported from China from these countries. This is good news to China as

their foreign exchange reserves are progressing quite well from the China-Africa trade

relationship.

Trade between China and 53 African countries has recorded an increase in the period

between 1999 and 2009 by a rate of 28 percent despite the global economy recession between

2008 and 2009 (Rotberg, 2008). The highest demand for Chinese exports is mainly from

countries which have either a high per capita income or a high population and the top three

African countries importing these products include Angola, taking up 32 percent of total exports,

South Africa with 23 percent and Sudan with 10 percent. The rest of Africa builds up the

remaining 35 percent. These statistics are from records in the year 2009. The most exported

Chinese product to Africa is transport equipment and general machinery due to China’s

investment projects in Africa. Other products include porcelain, plastic, clothing wear and

women’s handbags.

Let us fly all the way to Europe, another continent where Chinese products are thriving.

Name branding has very well spread awareness among European countries about the existence of

China and its products. On a daily basis, China and the European Union (EU) trade

approximately 1 billion Euros compared to the recent two decades where little trading activities

used to occur between the two. Currently, these partners depend on each other to the extent that

it is impossible for them to survive without their coexistence. Many European students can now

freely study in China and can acquire an opportunity to live and work there too. In 2013, trade


between EU and China amounted 428.1 billion euros and this can be attributed to by the magic

done by name branding. Consumer and industrial goods are the mainly demanded products from

China in the EU. In detail, these are footwear and clothing, equipment and machinery, lamps,

furniture and toys.

In northern America, the United States (US) and Canada have developed a taste for

Chinese products after heavy country of origin branding. United States, being the world’s second

richest country, has 20.2 percent of its imports from China. China is US second highest importer

after Russia. The healthy trade relationship between US and China amounted a total of 486.3

billion US dollars, with the US mostly importing electronic equipment, machinery and pumps

and furniture and lamps from China. In addition, Canada also has demand for Chines products.

The impact of positive name branding by China has had the country move from being Canada’s

fourth highest to the second highest importer in 2012. This is exhibited in the significant rise in

imports from China from 8.7 billion dollars to a favorable 48 billion in 2011. The bulk that is

imported from China is made up of manufacturing products which include electronic equipment

such as DVD players and dry cleaners, and mechanical appliances.

Trading relationships between other countries and China with a touch of name branding

strategies should augur well for China’s economy. This has also earned it the position of being

the world’s largest economy.

The Effects of Nation Branding on China’s Economy

Since ages of ancient civilization and being the home of a rich culture, China attracted the

world’s attention with its early relationships with various countries. Furthermore, its culture

embraced education whereby knowledge was passed from generation to generation and formal

education was prioritized in the country. This resulted in a pool of intellectuals who had

advanced knowledge, skills and proactive technical capabilities in its population. Name branding

strategies advertised the country to the rest of the world and it has managed to relate with other

countries in a beneficial way, such that both countries achieve economic development.

China has developed into the world’s fastest growing economy with the highest foreign

investment reserves, thanks to the global trade and demand for its products. Being the world’s

second most valuable country brand, the country recorded as Gross domestic product rate of 6.9


percent in the third quarter of 2015 (Xiamen, 2015). This has so far been China’s lowest

development dropping slightly below 7 percent from its previous quarter. The graph below

showcases China’s economic progress since January 2013.

As reported by the National Bureau of Statistics of China, the country has recorded a

drop due to decreased output from industries, a sluggish progress in investment of property and

generally contracting exports. The challenges here outweigh the efforts of China’s country

branding in developing the economy. However, this growth level is also slightly higher than the

country’s expected GDP level on the third quarter of 2015 (www.tradingeconomics.com, 2015).

China’s GDP level represents approximately 17 percent of the world’s total economy.

China currently holds the second highest GDP current price after the United States, at a

value of 11385 billion US dollars. In addition, it holds the highest GDP basing on the country’s

purchasing power parity (PPP) AT 19510 billion international dollars. Its production from

industries grew by 5.7 percent which was still lower than the expected 5.9 percent. The country’s

investment in fixed assets also increased by 10.3 percent, but this rate was below expectations.

The failure to meet targeted rates of development tells China that the efforts by its government to

uphold economic activities (including nation branding) are not gaining sufficient progress. Retail

investment was the only economic sector that met expected development recording a 10.9

percent growth.

http://www.tradingeconomics.com/


Although China’s economy is lagging, the country proceeds with its overall development

at a rate that other countries with major economies can be jealous about. Therefore, lower growth

rates do not deprive it from being the major global consumption and production engine.

Critique

Nation branding is done with intentions of selling the country as a product itself, to create

a good impression so that they can put much focus towards the respective country’s products and

explore its features. Another aim for nation branding is to increase economic development and

the country’s exports. However, this may not be the case as always. China has made efforts to

advertise itself among other nations and as much as this strategy has paid off, it has had

challenges and negativity coming its way. This majorly comes from those who have either had

unpleasant experiences with Chinese products and services. Trade relationships could have had

unfair practices that may have left China with a reputation to protect. In another case, tourists

from other parts of the country may have received high expectation regarding the hospitality

services in various hotels and restaurants in China only to realize they are being served under

less than anticipated conditions during their vacations. This section of the paper talks about the

negative effects of nation branding that actually exist but less is mentioned about them.

However, this should not be viewed as an insight against China’s nation branding strategies.

Unfair trade practices

To begin with, China and the EU are lucrative trade partners that currently depend on

each other for survival. Both of them are members of the World Trade organization. Nation

branding has played a part in enhancing the trade between these two partners since, as mentioned

earlier, little trade activities used to take place between them in the previous decades. This trade

relationship may appear healthy on the outside but looking deeply into it, you will realize that

EU is having a hard time investing in Chinese grounds. Nation branding strategies were taken up

by China so as to increase foreign direct investment (FDI) opportunities both in and outside their

country but the EU is facing restrictions from China’s strict trade policies.

China’s investments in the EU increased by 2.6 percent in 2012 which was higher than

the year 2011which was at 1.0 percent, whereas EU investments in China remained stagnant that

year at an average of 20 percent. EU companies have found it more difficult to further penetrate


the Chinese economy. This is due to the long procedures and red tape involved in making foreign

investments in China. The Chinese government has a high degree of involvement in its economy

resulting in numerous parastatals and difficulty to access cheap finance by foreign investors in

the country. Moreover, China does not allow foreign law firms to employ lawyers who are in its

country and no foreign lawyers can gain Chinese qualifications to practice law in China. The EU

also complains about the lack of transparency in Chinese trading activities.

Counterfeit products

Recently, the world’s markets have been flooded by fake merchandise and this came to

the concern of participants in global trade activities. Surveys were carried out and it was realized

that percent of goods in the world market are counterfeits and China contributes a large part of

this percentage. Nation branding may be effective in boosting demand for its products but many

people now have the perception that Chinese products are fake. Most knockoff products always

appear to have the tag ‘Made in China’ on them thus creating a bad reputation for China.

Counterfeit products cost foreign companies losses at an estimate of 20 billion dollars per

annum. Worse, these products have kicked some companies out of business due to the inability

to control counterfeited goods. They range from electronic appliances such as DVD players,

headphones (such as Monster Inc. products), food materials and fashion materials too. The prices

between the original and he counterfeit products is so large such that the knockoff goods cost a

tenth of the original good. This has caused trading wholesalers to buy goods in bulk from China

and sell them in their countries at almost the same prices as the original ones.

Trade partners with China are paranoid about whether the goods they are importing from

China are genuine or fake (Crabbe, 2014). Countries have even began doubting the intellectual

property rights laws in China considering that in 2012, 64 percent of all the counterfeit products

received in the EU came from China. Moreover, China is now faced with the problem of fighting

off counterfeiters and focusing on quenching its market demand. This crisis has made China’s

country branding efforts to appear as a way of marketing fake goods of which the world is aware

of and world like to do away with them.


Negative influence

As far as China advertises itself around the world, the country is being viewed as having

negative influence across the world. In its involvement in international affairs, China’s positive

influence ranking since 2005 decreased by 8 points up to percent while its negative influence

ranking rose to 39 percent. China’s perceptions are getting lower in the EU, first of all due to the

business relationships whereby China is the only one benefitting, secondly, due to intellectual

property infringement and lastly, Chinese tourists are said to be rude during their visits in other

countries. This has not only affected China but also China’s neighbors. Nation branding efforts

by China may be of little relevance now that the country is deemed to have negative influence

and its disputes with its neighbors too.

In summary

China’s nation branding has generally been effective towards building its economy and

developing demand for its products. It has grown from being an average trading country into

being one of the world’s largest trading countries. Having records of the second largest importer

and the largest exporter, plus having the highest foreign investment reserves in the world can

partly be attributed to its self-advertisement to other countries. However, as a concern for both

the Chinese government and its citizens too, the country ought to participate more in public affair

and eradicate counterfeiting in its countries. Its citizens need to know that they are part of a large

country that is trying to send a positive image to the rest of the world, therefore they should also

develop positive interpersonal relationships. All in all, China will continue topping most of the

global charts with its large and influencive economy so long as its nation branding strategies are

kept in check.


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