With foreign firms at their doorstep, Chinese companies understandably felt a sense of urgency.Facing the onslaught of global brands, many local companies cried “wolves coming”
and lamented the demise of famous Chinese brands. The sense of crisis reached the peak in the years prior to China’s accession to theWorld Trade Organization in 2001. Chinese companies had ample reasons to be pessimistic as the battleground was certainly not a level playing field for the indigenous products. Aside from many investment incentives, foreign investors generally had more advanced technologies, better quality products, greater financial recourses for manufacturing as well as advertising, and more sophisticated brand management and marketing strategies. In contrast, local manufacturers, many of which were state-owned enterprises, suffered from the ills of central planning. Although the Chinese government started reforming these enterprises in the 1980s by introducing newtechnologies andmanagement practices, many companies did not placed great importance on marketing or developing their brands. While many foreign consumer products gained great popularity in the country, Chinese consumers could not find any strong local brands in many product categories. Having realized the importance of brands, the Chinese government started campaigns in the 1990s for domestic firms to improve product quality, to promote Chinese brands, and to encourage its citizens to buy Chinese products (Smith, 1996). Today, an increasing number of
Chinese manufacturers have met the “international level” quality standards and acquired prestigious certifications including ISO 9000. The government also called on Chinese enterprises to protect, establish, and market their own “famous brands.” For instance, Changhong has over the years become themost popular brand of television in China. In the long competitive catchup process, local firms had much to learn from their foreign counterparts in brand development and management. Some even appealed to the