Ged Carroll

Category: china | 中國 | 중국 | 中華

Ni hao – this category features any blog posts that relate to the People’s Republic of China, the Chinese communist party, Chinese citizens, consumer behaviour, business, and Chinese business abroad.

It is likely the post will also in other categories too.  For example a post about Tong Ren Tang might end up in the business section as well. Inevitably everything is inherently political in nature. At the moment, I don’t take suggestions for subject areas or comments on content for this category, it just isn’t worth the hassle.

Why have posts on China? I have been involved in projects there and had Chinese clients. China has some interesting things happening in art, advertising, architecture, design and manufacturing. I have managed to experience some great and not so great aspects of the country and its businesses.

Opinions have been managed by the omnipresent party and this has affected consumer behaviour. Lotte was boycotted and harassed out of the country. Toyota and Honda cars occasionally go through damage by consumer action during particularly high tensions with Japan.

I put stuff here to allow readers to make up their own  minds about the PRC. The size of the place makes things complicated and the only constants are change, death, taxes and the party. Things get even more complicated on the global stage.

The unique nature of the Chinese internet and sheltered business sectors means that interesting Galapagos syndrome type things happen.

I have separate sections for Taiwan and Hong Kong, for posts that are specific to them.

  • Marketing, president, apocalypse – the good, bad and the ugly

    Marketing, president apocalypse – what’s going on Ged? Years ago I used to write a periodic section on this blog: Good, Bad and the Ugly. I have been doing ongoing maintenance of this blog in the background and was inspired to bring this back after visiting old posts.

    • This time I looked at marketing, president, apocalypse. Specifically: Marketing as practiced in agencies and clients
    • A president represented in media because the run up to the US presidential election in November means things are pretty strange.
    • A fictional apocalypse – because global warming, COVID19, populism, Brexit and the rise of China under Xi Jingping

    Good, Bad and the Ugly was originally inspired by my love of two magazine sections:

    • Wired magazine’s Wired, Tired, Expired – which used to be a great zeitgeist measure in a pre-brogrammer Silicon Valley. Back when the excitement of the new, new thing was conveyed through the written word and brave choices in neon and metallic inks with challenging typographic design. Wired, Tired, Expired inspired the spirit of where I wanted to go with it
    • UK motoring publication Car Magazine. Car was a pioneering publication. It invented the idea of a ‘car of the year’ back in the 1960s. As a spotty teenager I loved to leaf through its pages. The writing of the late great L. J. K. Setright who combined a love engineering and the written word in each of his articles. (Setright’s book The Designers is a particularly good read.) Beautifully photographed cars and adverts of luxury brands that I hadn’t heard of like Panerai. It was a heady mix of Esquire and petrol. I fell out of love with Car magazine as driving became less relevant to me. But the concept behind their Good, Bad Ugly classification of cars stuck with me
    GoodBadUgly
    Long and short term marketing thinking. In the past decade Les Binet and Peter Field’s IPA based research, together with findings from the Ehrensberg-Bass institute have shaken up marketing. No self respecting marketer now doesn’t thinking about the importance of brand marketing. Last touch attribution. Performance (digital) marketers have used last touch attribution to burn marketing dollars at the altars of Google and Facebook for too long. Mark Read of WPP – whose ill-considered comments on digital marketing and ageism in agency life showed an extreme dose of short term thinking. It probably explains the WPP share price….
    President Bartlet – The West Wing was a touchstone of political fiction for friends of mine who worked in public affairs. The West Wing captured the tension and excitement of a high functioning political machine. I had the pleasure to chat over dinner with Don Baer. Baer was a former Clinton staffer, whom the character Toby Ziegler was based on.

    Bartlet also contrasts sharply with the bland Joe Biden and president Trump. Unfortunately neither of them have the kind of dialogue coming out of their mouths that Aaron Sorkin could provide Bartlet    		While Bob Woodward and Carl Bernstein’s book All The President’s Men is justifiably famous. Their second book Final Days captures the implosion of president Nixon and makes a more tragic read on a presidential administration.The House of Cards quickly went from being sharp biting satire that thrilled, to repulsion. The story built up on and created something new from original UK source material. But the show rested too heavily on the shoulders to Kevin Spacey as president Underwood. When Spacey’s reputation fell, so did the show. Robin Wright did a valiant effort to resurrect it which is worthwhile watching.
    The Jackpot – in William Gibson’s books The Peripheral and Agency a key part of the plot line is the apocalypse. This is called the Jackpot. There is not one inciting incident. Instead the world is gradually eroded to just 20 per cent of its population. The causes are very familiar to us: climate change, pollution, drug-resistant diseases and other factors. Given that the world population is still heading upwards. The Jackpot is either a way off or still in its early stagesThe Atomic Wars – the atomic wars occur the back story of the Judge Dredd universe. The modern world is destroyed by the cold war going hot. Authoritarianism and large cities offer relative safety compared to the cursed earth outside.Avengers Infinity Wars / Endgame. Thanos has a malthusian world view. He unites the infinity stones, snaps his finger and half the universe’s population disappears. Endgame then tries to give it a happy-ever-after finish because Hollywood. Yes it conforms to the idea of an ‘end of an age’ but it just doesn’t feel that disastrous in the grand scheme of things

    Marketing, president, apocalypse choices, let me know what you think in the comments section. More versions of the Good, Bad and The Ugly here.

  • Tech cold war + more things

    The US-China tech cold war has turned hot – but would a Biden presidency change things for Huawei and others? | South China Morning Post – “No president will want to be accused of being soft on China,” said James Andrew Lewis, senior vice-president and director of the technology policy programme at the Washington-based Centre for Strategic and International Studies (CSIS). “Trump’s policies are disorganised, but consistently move to cut economic ties with China. Biden’s policies will be better coordinated, less abrupt, but move in the same direction.” – the tech cold war isn’t new. You could trace it back to the beginning with coercive IP transfer and massive industrial espionage. It kicked off in earnest with the Golden Shield Project 金盾 工程 censorship system. Where we are now was not a case of if, but when

    TikTok becomes a case study for Chinese companies planning global expansion | South China Morning Post – Zhang’s relationship with the ruling Communist Party is complicated. He must walk a fine line between keeping Beijing happy but not be seen as too close to raise concerns outside China. Zhang, who told Atlantic magazine in July that he was not a party member, was approached by Beijing a year ago with an offer to help when TikTok faced political troubles in India. However, Zhang sent mid-level staff to meet government officials, signalling he did not want Beijing to get involved – whether entrepreneurs like it or not, they’re likely to find the government inserted into the business like a helicopter parent. You’re likely to see coercive business development as part of Chinese diplomats wolf warrior patter; a la Huawei 5G network equipment and the Faroe Islands

    Allegations of deception dog Nikola’s lofty aims | Financial Times – my worst fear is that this will tarnish hydrogen fuel cells in the market. Hyundai are already doing interesting things with hydrogen fuel cell wagons

    Interesting report from Watches & Wonders (aka SIHH), Shanghai – Watches & Wonders Shanghai: The Future of Fine Watchmaking? | Luxury Society – more luxury related posts here.

    BJ Fogg on this old but good video explaining persuasion through technology in very simple terms

    FAA, Boeing Blasted Over 737 MAX Failures in Democratic Report – WSJ – really nice oral history of the Boeing 737 Max scandal

    Money-launderers use Chinese online shopping sites to funnel cash offshore | Financial Times – Money launderers have used some of China’s leading online shopping sites to transfer billions of dollars to offshore gambling sites, police raids have revealed. People wishing to evade China’s strict capital controls, for example to gamble on offshore websites, have been placing fake orders on the shopping sites, including on Pinduoduo, China’s second-largest platform by users. A corresponding sum is then credited to their gaming account.

    Kraft Heinz sells parts of cheese business for $3.2bn | Financial Times – surprised if more assets aren’t sold as the 3G Capital model isn’t working

    EU tests platform to link up coronavirus tracing apps | Reuters – really interesting development in interoperability

  • Dark stores and coercive diplomacy

    I came across a couple of interesting terms recently: dark stores and coercive diplomacy.

    Dark stores

    Gartner for Marketing (formerly L2 Inc.) were talking about a new development at Amazon’s Whole Foods subsidiary. It was what Gartner called digital dark stores. The first one has been established in Industry City to serve much of Brooklyn, New York.

    Amazon themselves called it a ‘permanent online-only store‘ on their blog.

    So whats the difference between dark stores and the ‘last mile’ warehouses that Amazon uses for fulfilment in places like London?

    • Looking at the limited amount of photos available, this doesn’t feel warehouse-like. There wasn’t obvious automation in the pictures. Instead it feels like a supermarket that’s well stocked, but lacking price tags and shopper marketing accoutrements. Gartner describe it as ‘technically a grocery store’, which implies that there might be zoning or planning regulations that they might be working around
    • It is only for the Whole Foods brand; rather than fulfilling Amazon Fresh and Amazon Prime Now items

    This isn’t just an Amazon thing. Gartner points out that American supermarket brands Kroger and Giant Eagle have also embraced the order-only store model. More at Gartner for Marketing here.

    Coercive diplomacy

    The Australian Strategic Policy Institute published a report on September 1, 2020 called The Chinese Communist Party’s coercive diplomacy. It was written by Fergus Hanson, Emilia Currey and Tracy Beattie. Hanson, Currey and Beattie analysed ten years of Chinese government diplomacy. In there words:

    The Chinese Communist Party (CCP) is increasingly deploying coercive diplomacy against foreign governments and companies. Coercive diplomacy isn’t well understood, and countries and companies have struggled to develop an effective toolkit to push back against and resist it.

    The Chinese Communist Party (CCP) is increasingly deploying coercive diplomacy against foreign governments and companies. Coercive diplomacy isn’t well understood, and countries and companies have struggled to develop an effective toolkit to push back against and resist it.

    This report tracks the CCP’s use of coercive diplomacy over the past 10 years, recording 152 cases of coercive diplomacy affecting 27 countries as well as the European Union. The data shows that there’s been a sharp escalation in these tactics since 2018. The regions and countries that recorded the most instances of coercive diplomacy over the last decade include Europe, North America, Australia, New Zealand and East Asia.

    There seems to be an escalation of economic and non-economic measures deployed. Economic measures would include:

    • Trade sanctions – such as the recent ban on German pork products. This was rolled out just a few days in advance of a trade negotiation meeting between China and the European Union
    • Investment restrictions in strategic industries such as the ‘agreement‘ that Yahoo!, Softbank and Alibaba had over Alipay (which included what would now be Ant Group). Strategic industries like state security is notoriously (and deliberately) ill-defined in China
    • Tourism bans
    • Popular boycotts such as Korean corporate Lotte being driven out of China and the 2012 anti-Japan protests where the public smashed Japanese stores, attacked factories and burned Japanese cars

    Coercive pressure is also applied at below state level on businesses. It may also be applied on individuals, based on the data leak provided from Zhenhua Data seems to imply.

    Non economic measures include:

    • Arbitrary detention. The best example of this would be Michael Kovrig and Michael Spavor detained as part of China’s dispute with Canada. Another example might be Australian citizen Karm Gilespie. China didn’t admit it had detained him for over six years, until they announced his death sentence in the summer
    • Restrictions on official travel
    • State-issued threats which are usually issued on a regular basis as part of wolf warrior diplomacy. (Wolf Warrior is a set of two films with a Chinese action hero, a la Rambo – but with less humour).

    Some of the imputus for coercive diplomacy might come from the Chinese Communist Party’s continued rancour over Qing dynasty-era unequal treaties. More China related content here and more on retailing here.

  • Boris Johnson + more things

    The Irreparable Damage Boris Johnson Is Wreaking on Britain – Carnegie Endowment for International Peace – unlike many members of his party, UK Prime Minister Boris Johnson does not have any particular animus toward foreigners. He has betrayed pretty well everyone in his various lives as philanderer, journalist, and politician: wives, mistresses, editors, readers, party colleagues, Parliament, and the wider public. EU negotiators are merely the latest victims of his boundless treachery – wow a sick burn, but factual and truthful in their analysis of Boris Johnson

    FCB Inferno - Valspar ad
    Boris Johnson in a Valspar ad

    China pledges expanded trade with EU but stops short on market access concessions | South China Morning Post – interesting that China is intransigent on so many fronts. More on China here.

    Pooj Morjaria, founder, Did They Help? – Wunderman Thompson Intelligence – A growing pattern of morally driven consumption has emerged over the past few years, from ethical fashion edits to anti-excess beauty to carbon credit spending to cruelty-free travel. But what was once pioneered by a niche group of true believers is ballooning into a base rate, fundamental expectation of brands. Morally and ethically sound practices are increasingly considered table stakes for brands—and are an important factor in consumers’ path to purchase. The difficulty, according to Pooj Morjaria, was tracking and cataloguing brand behavior. Which is why he created Did They Help?, an independent watchdog website that keeps a running record of brands’ good and bad deeds

    Science-backed brands – Wunderman Thompson Intelligence – A heightened focus on health is reshuffling the hierarchy of consumer priorities. In the wake of a global pandemic, consumers are putting more stock in medically and scientifically endorsed offerings. 89% of Americans put their trust in medical scientists, and those reporting a great deal of confidence in medical scientists has gone up from 35% before the outbreak to 43% in April, according to findings from Pew Research Center. Now, brands are harnessing that trust by enlisting medical professionals and spotlighting scientific credentials

    Beats by Dr. Dre Sets Its First-Ever Campaign on TikTok – I like when campaigns actually inspire creative action. For this challenge, people need a bit more creative than just replicating a dance. I really liked the emphasis on color, which works well on TikTok as a full-screen, immersive experience. You couldn’t really replicate this on other platforms. What we’re starting to see on TikTok is this mass participation in creativity. The concept of UGC isn’t new, but TikTok has made UGC so much more powerful. – Good TikTok Creative newsletter on the campaign

    Language Log » “Mulan” critique – academics on the issues with Disney’s life action version of Mulan

    China’s top 100 brands: National pride affects rankings | Marketing | Campaign Asia – With some world markets souring on particular Chinese brands, people in China rally round homegrown heroes. – the move towards rallying around the flag started before world markets went off some Chinese brands. The current environment has only accelerated this process somewhat

    Ex-Google boss Eric Schmidt: US ‘dropped the ball’ on innovation – BBC News – In the battle for tech supremacy between the US and China, America has “dropped the ball” in funding for basic research, according to former Google chief executive Eric Schmidt. And that’s one of the key reasons why China has been able to catch up. Dr Schmidt, who is currently the Chair of the US Department of Defense’s innovation board, said he thinks the US is still ahead of China in tech innovation, for now. – The irony is that at Google Schmidt & co. pretended that this was precisely what they were doing

    U.S. Google Antitrust Case Set to Expand With GOP States Joining – Bloomberg – Democrats want to more time for a broader probe. Areas focused on include Google search, advertising and Android. Of course, all of this would go away with Kamala Harris as vice president in a Biden administration.

    China Defense Blog: China Army “hot chow” drone delivery service  – what looks like larger DJI drones pressed into providing hot cooked food to Chinese soldiers in the field

  • Gaming the charts

    Gaming the charts has been going on for decades. Economist Tyler Cowen documented how prosecutions in the US for what was called payola started in the 1950s in his book: In Praise of Commercial Culture. Prior to this the process for ranking and gaming the charts was opaque at best. It destroyed the career of radio DJ Alan Freed, who helped pioneer the rock and roll sound. American Bandstand presenter Dick Clark almost had a similar fate. Clark sold a stake in a record company and turned snitch for the authorities.

    Over time labels relied on legal promotional means to radio stations. Here’s what KLF’s The Manual had to say about them circa 1988:

    Your plugger. The man responsible for getting the nation to hear your record. From now on in this man will undoubtedly be the most important person in the jigsaw. Without his faith, vision and understanding of the fastest lane in this particular rat race, you will be nowhere.

    So go with the plugger that’s got the faith, vision and understanding – indefinable qualities – but you will know within five minutes of meeting them if they have it. Top grade bull is something else they should have.

    The plugger will try and explain what his job is. Each of them view their role differently but all must be able to deliver the following:

    1. Concrete advice on what has to be brought out on your record for him to be able to do his job.

    2. Appointments with Radio One producers where he is able to get them to listen to your record under the most favourable light.

    3. Advice and help in putting together a video that will be acceptable for children’s television and a lead on some of the hungry young video makers who are out there.

    Money and pluggers. They will want a lot and when your record starts happening pluggers will want more. Scott [The KLF’s plugger] wanted a thousand pounds to start working the record and then all sorts of bonuses related to our record reaching certain positions on the charts. We had to pay him five grand altogether once it had made Number One. He had a lot of costs and his team worked flat out for it, but we had to give him the first thousand the day of release. We had a couple of months to pay the other four. Anybody who can do it much cheaper won’t be much good.

    The KLF – The Manual – How to Have a Number One Hit the Easy Way

    Plugging services also worked with club DJs to get their artists in club play charts. When I used to send returns to these charts I used to receive ‘promotional copy’ records from promo agencies. Some of them were good, some indescribably bad. One of the agencies I used to get material from was IRP; my contact there Lohan Presencer went on to become executive chairman of the Ministry of Sound Group.

    With the rise of hallyu and online voting you saw early breakout artists like the Wonder Girls galvanise fans and home and abroad to get them on to the likes of Disney Radio in the US and assist in gaming the charts.

    Miles Guo
    Miles Guo cover art – which makes the thing even slightly more surreal.

    Now it seems political activism has merged with the art of plugging. Miles Guo, a critic of the Chinese government based in New York has provided the vocals and money behind ‘Take Down the CCP‘. It feels like the Team America soundtrack, but without the irony.

    It went to number one on the iTunes download chart in three countries on the one day America, Canada and Australia (you need to make an allowance for the international date line, so Australia appears on September 11th, rather than 10th). It has all the hallmarks of a coordinated promotion. The reduced prominence of downloads versus streams obviously paid a part in their chart choice. Promotions of streams are structurally very different, with playlists along genres being much more important; so for Guo it would be much harder in terms of gaming the charts. Gaming the charts for streaming does happen; but with more conventional agendas. More music related posts here.