Chinese covet European brands over American brands
NY Times carried an article today on why it is hard for America to close its trade deficit with China.
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Aside from coffee and denim, there were not many American brand products that interested her. She covets Chanel clothing and Louis Vuitton bags, dreams of owning a BMW or Mercedes-Benz someday, and struggles to think of an American brand that appeals to her. A shirt by the Italian designer Dolce & Gabbana is preferred on the streets of Guangzhou. “There are more choices for European brands, more styles, so they are more interesting,” she said. |
So it is not really any trade or political barrier that is preventing American goods from penetrating the Chinese market - Germany does not run a trade deficit with China - but a lack of brand power. How did this come to pass?
Here is another news item, announcing layoffs at Ford, quoating the North American President of Ford, Mark Fields (from Wall Street Journal)
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“The reality is that the best of the competition is more competitive than we are on quality and costs, more efficient than us in their operations and they’re achieving market-share growth and sizable profitability all at the same time. We can and must do the same,” wrote Mr. Fields. |
I appreciate his honesty. Detroit has a lot of work to do, and I am afraid, they are not in the greatest shape financially to do it.
This financial deterioration is itself ultimately traceable to monetary distortion, courtesy Alan Greenspan. Companies like GM and Ford have essentially been financial companies with industrial divisions. As the NY Times article puts it
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‘The only U.S.-produced items that I can think of that exist in large quantities in China are dollar bills,’ said Matthew Crabbe, the managing director of Access Asia Ltd., a market research firm. |