China needs more brands

Chinese manufactures should pay more attention to building their brands if they want to gain the upper hand against international rivals, says an article in Beijing News. The following is an excerpt:

Long Yongtu, secretary-general of Boao Forum for Asia, said at a recent conference that small and medium-sized enterprises in China should keep a firm grasp on pricing as they enter the global market.

Beyond the small number of private enterprises in China that have become global leaders, most companies remain little more than assembly lines with little control over sales channels or pricing.

Domestic microwave oven brands like Galanz and Midea have grabbed 70 percent of the world market for microwave ovens, but they have no control over pricing. What is worse, the proportion of products they build under the brand names of foreign companies is increasing.

Enterprises at the lower end of the chain have trouble setting prices. That's a cruel fact of life in the market. Even if all companies manufacturing microwave ovens could be organized into a trade association, it would still be impossible for them to control the pricing.

Why do Chinese manufacturing enterprises stand at the lower end of the chain? The most important reason is the low-quality labor resources in China.

The only way to solve this problem is to invest more in training workers. Both the government and businesses should bear the cost of turning out high-quality skilled workers. Appropriate incentives must be offered to prevent these workers from disappearing. A well-established social security system and a minimum wage system should also be put in place.