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Fake things market – Shan Zhai model

I’m Martin, a new Marketing intern at the InternChina Qingdao office. It’s my second time in China – I love this country ! I am also quite interested in fashion and the concept of counterfeits.
Before I came to China, I knew that China was infamous for its counterfeit items. In many countries and even in France, where I come from, the local authorities are working hard to reduce the amount of available counterfeit items. But the first time I came to China in 2016 in Nanjing, I was impressed how easy is it to find fake things and how it is displayed shamelessly by market seller on streets or in mall, or by people. Sometimes there can be some great high-quality fakes, sometimes there can be some really terrible fakes. Look at these Abibas and New-Barlun branded shoes ! Or this Abiboss sweatshirt (a great mix between Hugo Boss and Abibas brand) and this CEANHL bag, interesting Anagram.

Where can I find fake branded things?

You can find these fakes everywhere ! You can find them on the internet on sites like Taobao, in souvenir shops, and also in big markets. In these places, you need to bargain. While you can find these markets all over China, I will talk about the ones I know in Shanghai, where you can meet so many foreigners eager to find cheap fakes. In Shanghai, so many French visitors come to the market that some sellers have even learnt how to say the prices in French ! The starting price can be as much as five times higher than the true value of the item.

What products can be counterfeit?

Well-known and luxury brands are often imitated – you can find a lot of fake Louis Vuitton and Chanel products. You can also find fake tech, including cheap Beats by Dre and even fake smartphones ! There have been copies of the Apple iPhone called Goophone on the market. Even worse, in 2011, a string of fake Apple stores were found across China. In the same vein, in Qingdao, i’ve seen a lots of fake branded shops, in a mall that seemed normal, like a lot of copy of Polo brand. Or a Enzo shop. (Just one K and its ok)

Shan Zhai (山寨)

This trend of counterfeit products is not just a few sellers in markets. It can be considered a serious business model here in Chins. Due to a mix of history, culture and a pragmatic economy, business based on fake and pirated products has its own name in Chinese : shanzhai.  The Shan Zhai model works thanks to more than 60% of Chinese people living in rural areas that are imitating the consumption trend in urban areas. This model has allowed some companies to break into a new market. For example, we can talk about Tencent’s QQ instant messaging service which is a carbon copy of the Israeli messaging service ICQ. Now, QQ is one of the most popular instant messaging services in China, and floated on the Hong Kong stock exchange in 2004. Indeed, it is for some companies a way to start with nothing by pushing down the cost of R&D and then implement new features to existing products to better fit the local needs and expectations. Some people defend the Shan Zhai model, saying it brings economic and social benefits by providing customer more choice at lower price. Foreign companies complain about the lack of strict rules concerning property rights in China, and trying to push Chinese governments to strengthen their control over counterfeit.

If you are interested to visit fake markets and experience China, don’t hesitate: https://internchina.com/apply/

Before your stay, Chengdu Blogs, China Business Blogs, How-to Guides, Learn about China, Understanding Business in China

How China’s development can benefit you

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Since China decided to open up their market to the world, known as 改革开放,Gaige Kaifang in 1978 major trade opportunities have developed from having access to such a large number of clients.

China is a country that loves technology and is developing faster than anyone could have predicted. As the country becomes richer, so does it’s people and thus their desire for modern products and fashionable items grows. The picture above highlights the level of development in only 20 years.

Major brands such as Apple, Intel, and Gillette and taken the country by storm, offering high quality products. Furthering this, there is a growing sense of consumerism here with locals opting to spend more on luxury items, such as coffee. Thus whilst China is still a developing country, even those who don’t earn a lot are willing to pay for high end, luxury products.

The fashion industry has also become highly popular among the richer population, with designer brands being displayed in every shopping centre. These brands often use western models and designs, which attract customers who want to show off their wealth. Beauty products, especially for women have taken off as some of the most popular foreign items for women,often being seen as better quality than their Chinese counterparts.

If you are looking to expand your business, the Chinese market is probably the best way to go. Locals are willing to pay top dollar for products which they believe are trustworthy and valuable. This creates a market for expensive goods in China, as it provides locals with an outlet to demonstrate their wealth and success.

By cleverly marketing your products as high end, expensive and with a modern feel, you’re business is likely to boom in the Chinese market. And remember, for many Chinese , when buying luxury items, west comes out best.

For more Chinese business insights, check out one of our interns blogs at http://chinesebusinessblogblog.wordpress.com

Cultural, Discover Chinese culture, Understanding Business in China, Zhuhai Blogs

China: más allá que un destino turístico

¿Se han preguntado porque China se ha convertido  no solo en un destino turístico pero también en un país donde puedes empezar tu carrera profesional?
China no es indiferente para nadie y parece que de un momento a otro se puso de moda. China es un país increíble y rápidamente cambiante. Sus costumbres y hábitos perduran, no obstante el país no para de crecer y modernizarse en todos los aspectos, se está transformando a pasos agigantados y está sorprendiendo al mundo entero. El mejor ejemplo de esto es Shanghai, ya que es una ciudad que ha logrado mantener  el balance perfecto de la China tradicional y la China moderna. Ésto, solo comprueba lo cerca y lo lejos que puede estar China del mundo occidental.

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Hoy en día, el impactante crecimiento de China se ha destacado, convirtiéndose en uno de los mercados emergentes responsable de casi una cuarta parte del crecimiento mundial. Algunos otros países como Brasil, India y Rusia, también han llamado mucho la atención debido a su gran desarrollo, sin embargo, ninguno es comparable con el desenvolvimiento de China. El modelo de crecimiento de la economía China se basa en la exportación, la industria y la inversión; y recientemente los servicios y el consumo doméstico también han jugado un papel importante, dentro de un constante aumento en el nivel de vida de la población.

Chinese one-hundred yuan banknotes are arranged for a photograph in Hong Kong, China, on Wednesday, Dec. 26, 2012. China's yuan fell for a fourth day after the central bank set the currency's reference rate at a five-week low amid concern budget deficits in advanced nations will hurt the global economy. Photographer: Jerome Favre/Bloomberg
InternChina- One-hundred yuan banknotes

Y ¿qué decir de su idioma oficial?  El Chino mandarín es el idioma más hablado del mundo en cuanto a la cantidad de hablantes nativos. Además, el Chino mandarín juega un papel muy importante en la comunicación de negocios en Asia; el Chino se ha convertido en el idioma extranjero más popular en países como Japón, Tailandia, Laos, Vietnam, Filipinas, Corea, entre otros. Si logras dominar el Chino mandarín, no solo serás capaz de comenzar una carrera profesional exitosa en China al comunicarte con locales, sino también te servirá para comunicarte con otros asiáticos que han aprendido Chino como lengua extranjera.

¿Te imaginas poder hablar el idioma del país que se ha convertido en uno de los principales jugadores en la economía mundial? Hablar Chino mandarín no solo te diferenciará del resto, sino que al mismo tiempo te proveerá con un futuro lleno de únicas oportunidades que te ayudará a desorrallar tus habilidades, crear nuevas experiencias y sobretodo ampliará tus horizontes.

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InternChina- Chinese characters

China es un país que destaca debido a su cultura milenaria. La mayoría de las tradiciones Chinas se han logrado mantener desde la antigüedad, ya que éstas han sido transmitidas de generación en generación. Es importante considerar que para poder llegar a comprender a un cien por ciento  a  la cultura china, es necesario tener un buen dominio del Chino mandarín. Así como cualquier otro idioma,  el Chino contiene muchas frases que reflejan la cultura del país, así como sus valores, ideales y tradiciones.

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¿Quieres tener un mejor futuro y salir de tu zona de confort? ¿Te interesa saber lo que China tiene para ti? Aplica aquí

InternChina News, Job Market in China, Understanding Chinese culture

China’s outlook for 2015: The road ahead

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Christine Lagarde speaking at the world economic forum.

It’s been a tough year worldwide. There have been international conflicts emerging, shaking our hopes of progress in the globalized era. There was a sharp drop in oil prices that has still yet to take its toll on the global economy. There was the risk of Europe falling into another recession and the general slowing of Asian economies.

While we heard some murmers of “optimism” and “consolidation” from the IMF and the World Bank, we look forward towards 2015 with hopes of improvement.

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Aside from the worldwide problems that will have a knock-on effect on China’s largely interdependent economy, China also faces its own domestic challenges.

  1. GDP per capita must eventually rise, considerably. Currently China is on the 93rd place in the world of GDP per capita. This means for the country that it needs to rise 32% to meet the world average. It needs to triple to equal the European average.
  1. The huge environmental issue. Some reports state that China cannot use some of its domestic natural resources such as coal, iron and others because it’s too dirty. This is one of the main challenges in China as from a pollution perspective, for example Beijing is becoming one of the worst cities to live in.
  1. Increase of income leads to larger consumption. The evidence of that could be seen on “Single’s day” which broke all records of purchases across the globe. China has always been regarded as the world factory for international markets but now more and more is consumed domestically.
  1. A rise in income also raises the real estate price that has led to a housing boom. It is a transitional change from lower to middle class society but it’s something China has to deal with in short term as the gap between rich and poor increases.
  1. Rising income also puts more strain on an export economy. Workers are demanding bigger salaries and better living and working conditions which pushes up the cost of the end product.  Countries are already sourcing products which require more involved handwork to other countries such as Vietnam where labour is cheaper.  Meanwhile the government struggles to keep the value of RMB low for its export industry in a country that’s clearly experiencing a boom.
  1. Consumers are more and more concerned about what they buy. Companies that produce for the domestic market are used to selling poorer quality products leading to massive brand loyalty. Better quality means better production standards countrywide and it’s going to cost.

All those indicators show that the economy in an ongoing process of change and evolution. GDP growth will remain steady around the 7% mark, impressive even if not the quite glory years of 2010 and before. Currently this resembles the progress of Japan in the 60s and Korea in the 80s.

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A growth of 7.4% is expected for 2014

China is rapidly changing and there are many internal issues that will come to light in the coming years. But it is inevitable to have a couple of bumps along a long road. The positive indicators are still flashing everywhere. The infrastructure is booming all around from small villages to the big cities. China is consistently investing a lot in its infrastructure in order to facilitate moving people from the country and into the cities. The increase of incomes is establishing a consumer oriented economy for the future. Small cities are seeing 20 to 30% growth. Savings rates are still very high but the government is planning reforms about this matter. Efforts are being made to try to ensure growth will be sustainable in the future, the epitome of a truly successful economy and a lesson harshly learned in Europe.

No matter the slowdown, China will still remain one of world’s biggest lenders. The Chinese Yuan will gain stronger positions towards the USD and the Euro.

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Find more interesting articles related to China on our LinkedIn page!

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China can be testing, make sure you come prepared!

Doing business in China is probably one of the most interesting and challenging activities in the world. The whole environment is very different to our western standards. Paul Bailey, manager from our Zhuhai office has shared a couple of insights that can help when breaking into the world of Chinese business.
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“Being involved in the day to day operations for any business in a foreign country will present its own challenges.  However, having already spent almost three years here in China, I find it hard to imagine any country so different from ‘Western’ cultural norms when it comes to conducting business.  Of course, ‘norms’ is a word to be used sparingly in any business context as practices inevitably vary between individuals and companies.  It is important to remember that even on home soil, depending on the company, we may just as easily choose to seal a deal over a pint of bitter as we would a boardroom table.  The same principles can be said for China and business must always be tailored to those with whom you are conducting it with.  The following information is to be understood as general rules and will most certainly not apply to every situation but should happen often enough to be worth brushing up on!

business-china

When it comes to China the first thing to consider is the massive influence that culture has on how business is conducted in general.  Companies in China interact differently to those in the UK and relationships are constructed and maintained in ways that might seem unusual or irrational to us but make perfect sense from their perspective.  For instance, when sitting down for a business meeting you may be surprised to find yourself sharing pleasantries, anecdotes, family pictures and ultimately only discussing business ten minutes before the scheduled meeting was due to finish.  Rather than spending the preceding minutes working yourself up into a Kung Fu style fury and blowing any chance of a fruitful relationship, simply knowing that the preamble is just as important as the business decisions can help you to achieve your goals and give you the preparation you need to succeed in the Far East.

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Never lose an opportunity to give your prospective business partners ‘face’.  If you are unsure what it means to gain and lose ‘face’ then find out what it means and learn how to go about acquiring some for yourself during your time in China.  The all-important ‘face’ is cumulative in that it will carry forward and like a healthy bank account it should be maintained as it will either act in your favour or be to your detriment when it comes to securing deals and generally getting stuff done.  Never forget that most deals in China revolve around ‘guangxi’ which can be interpreted as ‘your connections and the practice of giving and returning favours’.  Whilst ‘who you know’ and the common courtesy of returning a favour matters wherever you are in the world, I strongly doubt there is anywhere else where these facets are so integral to the nature of doing business.  Oh how hard it can seem to get the most rudimentary things done until you turn over the ‘guangxi’ stone!   Just remember, nothing is free and favours are expected to be returned in greater abundance.  It therefore pays to know that the past provision of favours and the implication of future back-scratching can carry just as much weight as a generous offer currently on the table.

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The final pearl of wisdom I will leave you with is to never forget that the social side of business is very much intertwined with the corporate side.  Your business associates may be upset to find you not attempting to lower your glass slightly below theirs as a gesture of respect when you are ‘cheersing’ around the table.  That puzzled look you are sharing with your Chinese associate after he has just finished his whole glass of beer in one gulp and you have taken a meagre sip is attributed to the expectation that the better the relationship between you both, the greater amount you will endeavour to consume after each clink of glasses.  Don’t forget to show how honoured you are given the seat reserved only for the most distinguished guests when sitting down for dinner.  Don’t forget to take note of the guy who gets the seat of honour if it isn’t you!

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Of course your Chinese friends may well have done their own homework on your culture and therefore not expect such courtesies from you, but then again perhaps they haven’t.  Make sure you do your homework and prepare as much as possible in order to minimise the possibilities of causing offence and ensure that you give yourself every opportunity to conduct business successfully in this wonderful country.”

Want to know more about Chinese culture and business? Follow our blog and find out all that there is about China!

China Business Blogs, Qingdao Blogs, Understanding Business in China

Planes, trains and Qingdao

Hello readers,
Remember me from last week’s blog?  Let me refresh your memory.  Firstly, I’m from a small town in the province of Québec and secondly I’m currently interning at the Qingdao office. With that being said, it only seems fair to dedicate this week’s blog exploring a subject relevant to what has just previously been stated.

If you keep up with the news or have always secretly wanted to be a pilot, chances are you’ve heard of the multinational company Bombardier, the world leader in plane and locomotive manufacturing. This enterprise has come a long way from its humble beginnings as a snow mobile manufacturer in a small town of Québec and has moved on to have a truly global presence. Although the company has recorded sales revenues of over 18 billion US-dollars in 2013, it’s nice to note that the corporate headquarters are still situated in Montréal, Québec.

 

InternChina-Bombardier Logo
InternChina-Bombardier Logo

 

So what’s the link between Bombardier and Qingdao you may ask? Well, for starters, it’s important to note that the largest Canadian investment in China is the Bombardier plant located in Qingdao. Yes, you read right. This plant manufactures subway and railway cars that serve all of China, including the ones for the current Chengdu metro line and the ones we will see sometime in 2015 here in Qingdao!

Bombardier started investing in China over 50 years ago answering the important need to develop and expand the transportation system. The company has since continued to solidify its ties with the ever-growing Chinese market. In regards to Qingdao, Bombardier Sifang Transportation Ltd. was established in 1998 and is one of the four joint ventures Bombardier has in China. With the second largest trading harbor, it seems only natural that such an important enterprise settle where there is a diversified economy, booming investment opportunities and quick access to the rest of China, as well as other trading partner countries.

Another fun fact is that Bombardier technology was used for the construction of the longest high-speed railway in the world, taking passengers from Guangzhou to Beijing in eight hours. Not only has this revolutionized the way people get around the country; it also shows how China is cooperating in terms of technological advancement with Canada.

InternChina-High Speed Rail
InternChina-High Speed Rail

In conclusion, for most people already in China or for those of you who are arriving shortly whether by train or plane, Bombardier is responsible for the wind beneath your wings and the technology that fuels the engine that gets you from point A to point B in less time than it takes to write a blog. No-maybe not that quickly, but a lot quicker than it did half a century ago!

If you too want to discover China by plane or train, all while doing an internship and gaining valuable skills, apply here!

Sources:

http://cn.bombardier.com/press_release_01112013.htm

http://cn.bombardier.com/about_bombardier_in_country.html

http://www.bombardier.com/en/about-us.html

http://www.tradecommissioner.gc.ca/eng/canadexport/document.jsp?did=139906