226 CultureShock! China
customers. The illusion lasted only a short period of time.
Two things worked against this aim. The first was that most
licences were issued for companies to export, rather than
produce goods for the domestic market. The second, most of
those 1.3 billion people had neither the discretionary income
to buy nor the access to choose foreign branded products.
China was focused on attracting investment that would
prime her economic engine, providing foreign exchange
for her coffers and jobs for her people. Deng Xiaoping, the
architect of China’s opening, was attempting to follow the
model laid out by Taiwan, Singapore and Hong Kong, which
had lifted their economic position on the back of export.
As a Chinese Kennedy School graduate explained, Deng
created a few special areas along the coastal region where
the best talent and infrastructure was placed to support the
growth of modern manufacturing practices in China. As these
areas became successful, they began to absorb workers,
converting unskilled labour into skilled labour, building
reserves of foreign currency and delivering on China’s
promise to her people to improve quality of life.
This is fundamentally why China will remain the
manufacturing centre of the world for the next 70 years.
She has laid the transportation and supply infrastructure to
reproduce those silos through the undeveloped interior of the
country and has 60 per cent of her population waiting for
their turn to become skilled labourers. While the promise to
improve quality of life has been met in the coastal region and
provincial capitals, much of China still clings to the promise
rather than the experience.
With the growth of discretionary income of her skilled workers,
China has slowly opened up her market to foreign goods. The
giant posters of Deng Xiaoping thought lining highways have
been replaced with Coca Cola and Mercedes billboards. You can
purchase a bar of Dove soap just as easily in the Grand Bazaar
of Kashgar as you can at Wal-Mart in New York.
As barriers to entry have fallen, there has been a mad
scramble of business to China. Every company has equal
opportunity to take a lead position in a virgin consumer
market where there are no quality legacy brands. Unilever, the