Chinese officials, experts, and entrepreneurs have called on the
government and enterprises to be more aware of Chinese brands that
are at a disadvantage in the world and to avoid losing control of
domestic brands when cooperating with overseas investors.
At a seminar during the China Commodity Trade Fair held over the
weekend in North China's Inner Mongolia, Vice Minister of Commerce
Jiang Zengwei said Chinese lack of innovation in technology and
brand cultivation hinders upgrades of the industrial structure and
transformation of economic growth.
Statistics from the seminar showed that the contribution of
products with domestic brands to China's economic growth was
already over 25 percent and the country ranks first in terms of
production in more than 170 products.
However, not a single Chinese brand has ever been listed among
the top 100 global brands released by Business Week
annually.
"Currently in China, only three in every 10,000 enterprises own
intellectual property rights (IPRs) and unique techniques. And more
than 60 percent of enterprises do not have trademarks," said Wang
Qiguo, director of China Brand Research Center of Beijing
University, adding that an enterprise without a trademark is unable
to become a famous brand.
Most of "Made-in-China" products are made for overseas firms,
thus bearing those firms" trademarks, according to Wu Handong,
president of Zhongnan University of Economics and Law.
s a result, the majority of profits, made by taking advantage of
a large amount of land and mine resources, as well as cheap labor
force and even at the price of environment pollution, do not go to
the OEMs (original equipment manufacturer) in China, but their
foreign counterparts.
As a matter of fact, China also ranks first in terms of the
absolute number of trademarks, which reached 27.74 million by the
end of last year, according to statistics from the seminar.
However, some Chinese brands are gradually edged out of the
market and finally disappear in mergers and acquisitions between
Chinese and overseas businesses.
Seven of China"s top eight beverage companies have been merged
with Coca-Cola or Pepsicola, and foreign brands account for more
than 90 percent of the market share of the country"s carbonated
drinks.
In the cosmetics industry, foreign brands make up 75 percent,
while in food and medicines, they comprise 30 percent to 40
percent. Three of the top four laundry detergent producers have
been acquired by foreign companies.
Liu Liedong, general legal consultant for the China Oil and Food
Corporation, a leading grain, oil and foodstuff trading
conglomerate in China, said that the fundamental purpose of
international companies in China is to raise their market share and
promote their trademarks, with capital, technology and brands
acting as their most powerful weapons.
Attracted by foreign capital and technology, many Chinese
enterprises do not pay due attention to the handling of their
brands when cooperating with foreign investors.
He said Chinese enterprises usually put their trademarks into
joint ventures. With the development of the new company, foreign
investors gradually gain a controlling position or just replace the
Chinese brands with their own.
Furthermore, few Chinese brands have overseas registration.
Forty-six percent of 500 famous domestic brands have no
registration in the United States, according to data from the
seminar.
Some famous Chinese brands, including Tongrentang, a leading
traditional Chinese medicine manufacturer, China"s largest computer
maker Lenovo, and electric appliance maker Haier have been
maliciously or falsely registered in some foreign countries.
Malicious registration of domestic brands outside the country
has caused a direct loss of US$200 million in the past over three
years, added Wu, saying it is partly due to a lack of awareness in
brand cultivation and a global strategy.
Liu suggested that Chinese enterprises improve their awareness
of IPR protection and at the same time that the government
strengthen law enforcement of its trademark assessment system.
(China Daily August 8, 2007)
