Corporate Reputation Review

Volume 9 Number 3

Branding China: The Ultimate Challenge in

Reputation Management?
Theresa Loo
Leeds University Business School, Leeds, UK
Gary Davies
Manchester Business School, Manchester, UK

ABSTRACT

A good reputation can enhance the competitiveness of a nation and its corporate/product
brands. As China goes global, it is important
that it manages its reputation, its nation brand,
and shapes how it is viewed in the international arena. Ten challenges facing the branding of China are identified from a review of
the relevant literature. They center around the
key issue of whether China can be a coherent
brand, given the nations complexity, contradictions and enormity. The paper argues that
there are common denominators, which straddle
across the different outputs of a nation, that
can be used for nation branding. It ends with
a discussion of what are the possible values
and images that Brand China can embrace.
Corporate Reputation Review (2006) 9, 198210.
doi:10.1057/palgrave.crr.1550025
KEYWORDS: China; Olympic Games; na-

tion brand; place brand; country of origin; public

diplomacy

INTRODUCTION

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198

Every nation is a brand and most nations

have had their brands made for them. The
nation brand could have been developed deliberately or by default, formed from a myriad of different sources, such as word of
mouth, education, mass media, travel, product purchases and dealings with its people.

www.palgrave-journals.com/crr

The nation brand consists of images, which

are often powerful stereotypes, carrying cognitive, affective and normative dimensions
(Verlegh and Steenkamp, 1999). They may
not be a true picture of the objective reality of the nation, yet they are nonetheless
pervasive. They influence all kinds of buying
decisions, from consumer purchase, industrial buying to foreign direct investment in
target markets.
National images exist and will continue
to evolve one way or another. However,
without attention by the countries themselves they will often be based on misconceptions, with potential negative short- and
long-term consequences for those nations
(Papadopoulos and Heslop, 2002). Failing to
develop an attractive nation brand or put up
a truly representative image of the nation
will essentially leave target markets and competitors free to create whatever stereotypes
they wish.The logical conclusion is that each
nation must take control of its own reputation by managing its nation brand.
Ever since Deng Xiao Pings Open Door
policy in 1978, China has assumed the role
of the global economys low-cost manufacturer. Its economic growth has averaged better than 9 per cent a year over the past 25
years. However, for it to maintain sustainable
long-term economic prosperity, no nation
can achieve the growth figures China currently enjoys by staying a low-cost manufac-

Loo and Davies

turing base forever. Furthermore, Chinas

domestic market is also becoming ever more
crowded and competitive as companies battle fiercely for their slice of the most populous consumer market in the world. Driven
by these immense pressures and fired by the
urge to partake in the global economy, in
2001 the Chinese government announced a
two-way investment strategy, combining
bring in with go global. Under the go
global strategy, the nation wants to create
international players from the most promising or strategic state-owned enterprises. Ever
since then, there have been step-ups in outward foreign direct investments from the
country.
At a point when Chinas engagement with
the global market, particularly in trade and
investment, is unprecedented in both its intensity and its breadth, the image that China
has in the international arena is ambivalent
and confusing, as can be seen in reports on
China in the mass media. Its economic
growth is often reported as dazzling and
amazing. Yet it is also plagued by negative
images, such as pollution, rural unrest, a
deplorable human rights track record,
infringement of intellectual property rights
and severe energy shortage.
Another contradiction in its image is that
while it is a still-developing nation, it is a
powerful and influential one. Nations as diverse as Brazil, Indonesia and Nigeria are
already intricately tied up with China. Chinas economic well-being can already make
or break the fortunes of its trade-dependent
partners (Ramo, 2004). The new generation
of Chinese leaders talked about a peaceful
rise (he ping jue qi), yet the rise of China is
seen as a threat by many, to the extent that
the West has to debate whether to engage
with or isolate the country. This official
party line was later changed to peaceful development to tone down on its threatening
menace.
In order for China to continue its growth,
both internally and externally, it has to shape

how it is viewed internationally. It has to

make clear its intention of a peaceful development and to get other nations to buy into
this world view. Managing its reputation, or
managing its nation brand, is part of the
equation. Branding China is probably the
ultimate challenge in reputation management. The purpose of this paper is to identify the branding challenges facing China
today from a review of the relevant literature.
COUNTRY OF ORIGIN

There is an interaction between the nation

brand and its corporate/product brands, with
each complementing the other. Brand France
and French brands are good examples to
illustrate these dynamics. France, as a nation
brand, has a strong image in the international stage: the Eiffel Tower, the language,
French perfume, nouvelle cuisine all contribute to an image of a romantic and culturally inclined nation. Conversely, French
brands such as Dom Perignon in champagne,
Galeries Lafayette in shopping and Chanel
in haute couture all add to and define the
nation brand. The challenge for any nation
is how to emulate such a reputation so as to
reap the benefits from a strong national image at the level of individual outputs. Within the academic literature the strongest
theme of relevance is that labelled as country of origin.
The country of origin literature suggests
that the image of a nation can have a powerful effect on how consumers evaluate its
products (Han and Terpstra, 1988) as well as
the success of its products in foreign markets
(Dichter, 1962). There is no consensus to the
definition of the country of origin effect
(Sauer et al., 1991) though it is generally
understood as the impact of a peoples perception about a country on their evaluation
of the countrys outputs. Bannister and Saunders (1978: 562) defined the country of
origin effect as generalized images created
by variables such as representative products,

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economic and political maturity, historical

events and relationships, traditions, industrialization and the degree of technological
virtuosity, which will have effects upon consumer attitudes additional to those emanating from the significant elements of the
products. Bannister and Saunders omitted
some important elements, such as many social and cultural factors, but their definition
indicated clearly that the country of origin
effect involves more than the physical output
itself.
The country of origin of a product affects
purchase decisions because consumers tend
to infer the quality of a countrys products
from its national image (Papadopoulos and
Heslop, 1993; Jaffe and Nebenzahl, 2001).
Consumers are willing to pay more for products and services from countries that they
perceive favorably or as having the expertise
to produce those products and services
(Nebenzahl and Jaffe, 1996), such as Japanese
electronics, Swiss timepieces and German
cars. Among status products, Royal Copenhagen china, Royal Selangor pewter and
French perfume owe their prestige to a
strong national image for these product
categories. In food and drink, the country
of origin acts as a seal of quality and becomes
an integral part of the product, such as
Cuban cigars, Russian caviar and Scottish
whisky.
The country of origin effect influences
whether a nations products and services can
demand a premium, both inside the country
of origin and outside. Products originating
from a country with a weak national image
lead buyers to expect a greater price discount
compared with products produced by a nation with a stronger image (Nebenzahl and
Jaffe, 1996). Changing the manufacturing
location of a Buick car from the US to
Mexico reduces the perceived value of the
car by a measurable amount (Johansson and
Nebenzahl, 1986; Seaton and Laskey, 1999).
In the early 1990s, when Brand Korea had
a poor national image in the international

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arena, research indicated that Korean-made

VCRs had to discount by approximately 40
per cent in order to compete with VCRs
with a Made in Japan label (Nebenzahl and
Jaffe, 1993). These research findings demonstrate that there is a substantial monetary
value to the nation brand.
Peoples notions of another nation and its
outputs are based mostly on national stereotypes (Kotler et al., 1993). When they refer
to a nation, they are often referring to their
mental images of the nation rather than its
actual attributes because most people do not
have a comprehensive knowledge of nations
other than their own (O Shaughnessy and
O Shaughnessy, 2000; Olins, 2003). Stereotypical images of a nation can be out of date,
distorted and simplistic (Kotler et al., 1993),
yet they affect how foreign publics see the
nation. Stereotypical images grow out of
messages received over time through sources such as education, media, business dealings
with its people or any combination thereof.
Hungarians, for example, view Japanese as
trustworthy and likable because they find
Japanese products reliable (Papadopoulos et
al., 1990). Conversely, a nations image, especially when related to its people and culture, can lead to generalizations about its
products. Papadopoulos and Heslops (2000)
study showed that many respondents perceive Canadian goods to be of a reasonable
quality even when they did not know what
products Canada manufactured. The generalization of a nations image to its products
works in favor of Canada in this instance,
but traditional, deep-rooted and misleading
stereotypes can often reduce a nations competitiveness in the global arena (Anholt,
2002).
Several studies have shown a relationship
between the stage of a countrys economic
development and its country of origin effect
(Schooler, 1971; Wang and Lamb, 1983; Verlegh and Steenkamp, 1999). American consumers are more receptive to products from
developed countries than from developing

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Loo and Davies

countries (Chinen et al., 2000). This kind of

attitude acts as a barrier against products
from developing countries entering more
developed, and hence more affluent, markets.
China, like many other developing nations,
faces price depression of their products in the
global marketplace in lieu of its reputation as
a low cost producer. In order to achieve sustainable growth, China understands that it
needs to move beyond a low cost production
model into higher value-added products. It
is already investing resources into R&D
to improve the quality of its products. The
go global policy aims to create between 30
to 50 national champions by 2010. But more
importantly, once these Chinese brand names
are established, China has to convince the
world that they are brands that deserve a
price premium. Hence
Challenge 1
How can China counter its developing
nation & low price images to command
a premium price for its products?
Consumers, Industrial Buyers and
Foreign Investors are all Susceptible
to the Country of Origin Effect

A study, titled Through Other Eyes: How

the World Sees the United Kingdom, conducted by the British Council in 1999 and
2000 found the perception of the United
Kingdom by young adults from 30 countries
ranging from very positive, under-impressed, to critical. People of different
countries see a nation differently because
they are dissimilar in terms of their cultural
values, socio-political characteristics, psychographics and even familiarity with the nation, all of which influence how people
perceive other nations. People tend to edit
out or rearrange certain images according to
their own bias (O Shaughnessy and O
Shaughnessy, 2000).

The home countries of consumers affect

their evaluation of imported products (Peterson and Jolibert, 1995). Nagashima (1970,
1977) and Narayana (1981) found that Japanese and American consumers have differences in their perception of the national
images of a number of different countries.
Geographical proximity with a country,
which affects consumers familiarity with its
products, also influences their response. Jaffe
and Nebenzahls (2001) study on the perception of the overall quality of goods produced
in different countries showed that European
respondents tended to select Germany as a
quality leader, while American respondents
chose the US, and Asian respondents selected Japan. Another study on the perception
of Canada by 18 countries (Papadopoulos
and Heslop, 2000, 2002) also showed similar
findings, with the United States, its immediate neighbor, consistently rating Canada and
its products higher than other countries.
The country of origin effect does not
differ between industrial and consumer
purchasing (Verlegh and Steenkamp, 1999).
Industrial buyers are also susceptible to the
country of origin effect (Papadopoulos and
Heslop, 2002; Kaynak and Kucukemiroglu,
1992; Cattin et al., 1982; Ahmed et al., 1994).
The lower the image of a country, the greater the price discount that buyers expect
compared with an identical product from an
origin with a stronger image (Nebenzahl and
Jaffe, 1996). Furthermore, foreign investors
are also affected by the country of origin
effect. The images they have of nations that
they plan to invest in could be significantly
different from the objective reality of the nations. Yet these images influence their decision making anyway. Wee et al. (1993) found
that American executives were largely driven
by perceptions in assessing potential locations
for investment in South East Asia.
The different stakeholders, ranging from
consumers to industrial buyers to foreign
investors, see opportunities and risks offered
by China differently, depending on factors

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such as individual perception, industry focus,

market focus, company goal and many more.
Consumers and industrial buyers of small
companies may be attracted by Chinas ability to produce a wide variety of quality
goods at low price, whereas big multinational investors may be attracted by Chinas
huge domestic market and low cost of
investment. Hence
Challenge 2
A nations image can vary from stakeholder to stakeholder and from market to
market, which stakeholders/markets need
the most attention from China?
Challenge 3
The country of origin effect is prevalent
across consumers, industrial buyers and
foreign investors. How can China create
a single, coherent brand to tackle these
multiple stakeholders?
The Nation Brand and its Corporate/
Product Brands

In todays globalized world, where credible

product differentiation in the face of imitation and homogenization of products and
services is difficult to maintain, corporate/
product brands on their own are often not
competitive enough. A nation brand that
consumers prefer is a competitive advantage
in the marketplace and leveraging the nation
brand as a point of differentiation is one way
for corporate/product brands to enhance
competitiveness. A British retail group adopts
a Japanese sounding brand name, Matsui, in
an attempt to create the illusion that its products are from Japan and offer the high quality of Japanese consumer electronics, even
when they are actually made in Malaysia and
the Philippines (Harris, 2002). In a more
creative use of national image to position a
product, Daewoo advertises its cars as com-

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bining British handling, Italian style, and

German engineering, while its Korean brand
name suggests low price (Papadopoulos
and Heslop, 2000, 2002).
The nation brand is an overarching concept with a single positioning that straddles
the entire range of outputs a nation has. It
sums up the consistencies across the nations
outputs, providing credibility and assurance
to consumers. The nation brand and its associated corporate/product brands feed off
each other and overlap (Olins, 2003). For
many people, Coca-Cola is America and
America is Coca-Cola. America is the land
of freedom and opportunity, and Coca-Cola
has been selling the brand values of the nation to the world for years. Sony is Japan
and Japan is Sony. Values such as innovation,
compact efficiency, quality and attention to
details, which are at the core of Sony products, become the core values of Brand Japan.
Service brands, such as hotel and airline
brands, also help define the core values of
the nation brand. The Banyan Tree chain of
hotels in Thailand exemplified the relaxed
lifestyle of Thailand. Singapore Airlines are
synonymous with the service excellence and
efficiency that the country has used to position itself in the international arena.
A nation with a better image than the
corporate/product brands of its outputs will
have a halo effect on its corporate/product
brands, thus improving their images. This offers opportunities for corporate/product
brands to leverage the nation brand by incorporating some of the core values of the
nation brand into their own brand values.
Conversely, corporate/product brands also
contribute to and affect the image of the
nation brand. The quality of the products
and services provided by these brands affects
how foreign publics perceive the nation
brand itself and the corporate/product
brands of other outputs. Research on country of origin finds that the image of a nation
is so strong that where the product brand
originates from, where it is designed, where

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Loo and Davies

it is manufactured, all have an impact on the

products final value and the nations concerned. A Sony camcorder being sourced in
Russia, a weak made-in country, may improve the national image of Russia while
eroding the corporate brand image of Sony
and the national image of Japan (Jaffe and
Nebenzahl, 2001).
Few Chinese manufacturers have succeeded in establishing global brand names of
their own despite extensive experience in
producing for many of the worlds most famous brands. Other than a few exceptions,
such as Haier (white goods), TCL (TV &
mobile phone) and Lenovo (computer), most
Chinese brand names are unknown outside
of China. When Chinese corporations move
into the international arena, they often resort
to buying foreign brand names and the market access that comes with them. However,
in the long run, most companies that aim to
go global will not have the financial resources to go this route.Top Chinese officials have
indicated that building multinationals will
help China become an economic superpower and the Chinese government has implemented policies that will spur the growth
of more Chinese brands in the international arena. A strong Brand China that casts a
halo effect on its outputs will be beneficial
to Chinese corporations intending to move
in on the global marketplace. Hence, one
issue the Chinese government has to consider is:
Challenge 4
How can Brand China be built up, so that
its halo effect can benefit its corporate/
product brands when they make forays
into the international arena?

Is a Nation Brand Output Specic?

Sceptics of nation branding argue that it is

not easy for a nation to have a consistent
persona because a nation comprises of a con-

stellation of different images. A nation is

an economically, culturally, and politically
diverse entity and cannot be easily reduced
to a single interest. Therefore, it is difficult
to project a positive overall image that
resonates with all the stakeholders of a
nation (O Shaughnessy and O Shaughnessy,
2000).
It is true that a nations image is often
output specific. Japan is rated highly for
producing automobiles and watches, but
there is no spillover effect onto its beer
(Roth and Romeo, 1992). Afghanistan rugs
are loved all over the world, but who will
buy an Afghanistan automobile? Countries
with images that reflect the strength of their
primary industries, such as Denmark (bacon
and butter) and New Zealand (sheep and
nature), face difficulties in creating a nation
brand that can promote high-tech products.
Some nations even have outputs that are
contradictory, such that the possibility of a
common platform for brand building
looks unlikely. Ireland and Austria both run
into this dilemma when their tourism industries position the countries as unspoiled
nature, while their inward investment efforts
portray the countries as hi-tech (Kotler and
Gertner, 2002; Papadopoulos and Heslop,
2002).
However, despite these incongruities, a
nations different outputs also have common
denominators, which allow the outputs to
be intricately linked. Some linkages between
outputs of a nation are obvious. Take the
Seychelles for an example, its main industry
is tourism based on its unspoiled beaches
and its largest export sector is fisheries based
on its clean water. Its positioning, Seychelles.
As pure as it gets, is a logical common denominator for the two outputs (Nourrice
and Tirant-Ghardi, 2002). Other linkages
maybe less obvious but nonetheless valid.
The use of New Zealands tourist attraction,
the great rugged outdoors, as a launch pad
for selling outdoor sports clothing made
from the wool of its sheep farming industry

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(Gnoth, 2002) are all based on a platform of

nature and pureness.
The crux of nation branding is to manage
all these individual images into a coherent
whole and project a clear and attractive image that meets the needs of most of the nations different outputs. These are common
denominators that are powerful enough to
overshadow the other incongruities (O
Shaughnessy and O Shaughnessy, 2000).The
US is a big, complex and contradictory nation. Yet innovative, a land of freedom and
high tech are images that sum up the US
well and which transcend its other complexities and contradictions.
These common denominators are at a
higher level of abstraction than the physical
attributes of the individual outputs. They are
not pegged at the level of raw materials or
low business operation costs per se, but arise
from its people, culture, mentality and styles
of doing business (Papadopoulos and Heslop,
2002).The enterprising and chic brand images of the UK are transferable and actionable across different outputs, be it tourism,
education or products for export (Davies and
Loo, 2006). Having a friendly brand personality can also be a common denominator
across outputs of a nation, be it exemplified
in friendly trade relationships, a friendly
place to visit, or products with user-friendly
designs. These common denominators can
be applied across multiple outputs, or at the
very least across key outputs that have critical mass.There are always going to be exceptions. Whether the nation brand is relevant
to any specific outputs will then be a matter
for judgement at that level.
The image of modern day China is fraught
with contradictions; an emergent industrial
power but one based more upon enlightened
communism than on capitalism; an enormous market but one where most consumers are still relatively poor; a source of goods
made for established Western or Japanese
brands rather than a source of goods valued
because they are made in China. Further-

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more, with opening up and exposure to

Western ideas, China is also changing as it
strives to find its place in the world. China
has been moving towards the free market
albeit with Chinese characteristics (Lee Kuan
Yew in Ramo, 2004). While Chairman Mao
once invested years to decode what Communism with Chinese characteristics should
be like, China is now intent on practicing
globalization with Chinese characteristics
(cf. Ramo, 2004). Hence
Challenge 5
What does the modern day Brand China
mean to both the Chinese and worldwide
audience and what are the common denominators that can be applied across
outputs?
Managing a Nation Brand

In looking at the issue of nation branding,

it is important to separate the rationale for
nation branding from the obstacles that will
be encountered in the exercise. A nation is
by definition complex, with multiple outputs, multiple stakeholders and multiple target nations. There are going to be conflicts
of interests between the stakeholders, such
as tensions between the UKs visa policy and
the countrys goals to attract overseas students and visitors (Public Diplomacy Strategy Board, 2005). The process of reconciling
all these different interests of the nation to
achieve a coherent whole is a daunting task,
giving critics who argue against nation
branding a reason for claiming that a nation
brand cannot be managed. However, if a nation succeeds in surmounting these difficulties, the nation brand will be a competitive
advantage in the international arena.
The benefits of the nation brand outweigh
the difficulties in execution.
In terms of the management of the nation
brand, countries generally take one of two
approaches. One is a kind of controlled or

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formalized way (Olins in Frost, 2004) and

another is to create a momentum so that the
rest of the nation can follow. In the first approach, dedicated organizations, such as
Scotland the Brand, are set up either by the
government or by the business community
to promote the nation and its outputs. Since
a nation is partly defined by the quality of
the products and services it is capable of delivering to global markets, products and services under the nation brand can increase or
decrease the value of the latter (Moss and
Estrada, 2002). Organizations like Scotland
the Brand create a nation brand that is basically a quality marque. They operate as an
elitist club, often limiting membership to
qualified corporations in key outputs that
the nation is keen on promoting. Corporations have to have high-quality products and
services, apply for membership and pass inspection before they are allowed to become
a member. The advantage of this approach
is that it guarantees that the member corporations produce high-quality products and
services that are good representations of the
nation. The disadvantage of this approach is
that it precludes most outputs of the nation
because they do not fall under the key segments to be promoted or are not qualified,
thus limiting the scope of the exercise.
The second approach is to create a momentum that allows the rest of the nation to
follow. In this case, the government assumes
a leadership role in making sure that a consensus on the common denominators to be
promoted can be reached and then inspire
the private and public sectors to live up to
them (Olins, 2003; Lindsay, 2000). A country
presents an image to the world through its
products and services, political actions, arts,
popular culture, sport, media, architecture
and many more. Collectively, all these messages represent an idea of what the nation
as a whole believes in, what it is all about,
what it feels like and where it is heading. If
governments can find national values that
capture the spirit and the mood of their na-

tions, then the citizens, outputs and corporations within their countries can join in to
live and exemplify these values in their day
to day lives. When a multiplicity of messages is spearheaded by both the public and
private sectors, all saying the same thing, it
is a powerful force (Olins, 1999).
The turnaround of Brand Spain, which is
often cited as a successful case in the nation
branding literature, is an example of this approach. In 1975, Spain came out of the iron
grip of the Franco regime, but was lagging
behind the rest of modern Europe. What
turned Brand Spain around were part careful planning and coordination and part
inspired individual and corporate actions
(Gilmore, 2002). On the one hand, there
were coordinated efforts by the government,
such as the hosting of the Barcelona Olympics, the opening of the Guggenheim
Museum in Bilbao, and institutional and
tourist advertising about the country. On the
other hand, Spanish corporate brands also
played a role in the rebranding of the nation.
Brand Spain was strengthened by the creation of international business schools and the
privatization and rapid global expansion of
Spanish multinationals, such as Telefonica,
Repsol and Union Fenosa (Olins, 2003).
The vastness of China implies multiple
regional markets with different economic,
political and social interests. This makes effective enforcement of policies a complex
matter at central, regional and local levels.
For example, the central government has
largely followed through on its WTO commitments by creating a stronger policy
framework for protecting intellectual property. However, the will and the ability to
enforce the policy at the local level are often
minimal. For Brand China, different outputs
with different unique selling propositions
may want to play up attributes that best promote them to the world. Therefore, tensions
such as whether to highlight Chinas tradition and heritage in tourism or to highlight
Chinas modernization in inducing foreign

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direct investment will always be there.

Hence
Challenge 6
Should China decide to manage its brand
centrally and across all outputs?
Challenge 7
Should it be done in a formalized way
or to just create a momentum then let it
happen spontaneously?
Challenge 8
Which outputs and companies should
lead the imagery?

nation, winning the right to host the

Olympic Games is an affirmation of its
social and economic progress for the past 30
years and its new status as a world power. It
marks Chinas arrival at the international
stage and will help accelerate Chinas integration into the international community.
It is also a chance for China to tell the world
that it is subscribing to the Olympic spirit
of excellence and victory. Expo 2010 in
Shanghai is the first time since the launch
of the World Expo in 1851 for it to be
held in a developing economy. This is another opportunity for China to signal to the
world that it has joined the club of the super
powers. However, two things remain unclear:
Challenge 9

Promoting the Nation Brand

Promoting the nation brand actively can

help accelerate the brand building process.
However, the promotion of nations uses different mechanisms from the promotion of
corporate/product brands.To begin with, the
scale of the promotion is bigger and more
varied. A nation can use specific outputs such
as its national airline as image drivers. British
Airways and Japan Airlines tell foreign publics something about the countries whose
flags they fly. Movies are also spokesmen for
nations. What Braveheart does for Scotland
and The Lord of the Rings does for New
Zealand are to bring to life the core values
of the two countries to the world.The action
that Spain used to lift the country out of
Francos shadow was to host the Olympic
Games in Barcelona, followed by the Seville
International Exhibition in 1992 (Olins,
2003). Such mega-events are showcases for
the host nation to put on a global display of
all its outputs and they gave Spain an image
boost almost overnight.
China will be hosting the Olympic
Games in Beijing in 2008, followed by the
World Expo in Shanghai in 2010. For the

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How will the nation brand be promoted

both internally and externally?
Challenge 10
How to maximize the nation branding
opportunities that the Olympic Games
and World Expo offer?

DISCUSSION AND CONCLUSIONS

Brand China could be a superbrand in the

making. It has a reasonable amount of media
coverage in the international arena. It has
many products with the made in China label in the global marketplace, so that consumers can experience Brand China first
hand.There are also two international megaevents for China to upgrade its image in the
world stage. However, the country faces a
number of challenges in its branding and the
purpose of this paper has been to identify
and scope what these are.
We have listed 10 challenges China
faces. Behind most of our challenges lies the
central question of whether China can evolve
a coherent brand image. Roth and Romeo

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Loo and Davies

(1992) examined eight studies on country

of origin effects and found four common
dimensions of national image, namely prestige, design, innovativeness and workmanship, across different national subjects
and their perceptions of other countries.
Most of the world knows of China as a production powerhouse, so its image is, to a
large extent, influenced by its performance
as the worlds manufacturing backyard.
However, Chinese products do not rank
highly in international polls (eg GMI,
2005). It is hardly chic to wear Chinese
brand fashion or drive a Chinese brand car
nor credible to suggest that promoting prestige is the immediate way forward. There are
few overtly Chinese brands at present
to carry the nation brand towards prestige.
Chinese businesses that aim to expand
internationally are instead looking to purchase existing western brands. In the longer
term, China will need to develop brand
names of its own.
Design is again an area where China is, at
best, unknown. Any imagery will generally
be associated with being Oriental, but reduced due to Chinas residual image under
Communist rule as decidedly utilitarian.
However, some western brand names, such
as Vera Wang, Vivienne Tam, and Hong
Kong-based Shanghai Tang, have a strong
Chinese association that promotes an upmarket brand imagery, paving the way for
other Chinese brands to follow.
In terms of innovation, Chinese companies used to ride on the bandwagon of technology developed by other multinational
companies (Deloitte, 2006) and it was rare
for Chinese companies to meet the international norm of spending 5 per cent or more
of revenues on research and development.
However, now that the country has decided
to go global, it has announced that it will
boost its R&D efforts, so as to improve its
innovative capability and technology. We
could be seeing a more innovative China in
the future.

Workmanship is, however, one potential

platform that is compatible with traditional
values in Chinese society, those of hard work,
diligence and attention to detail. This will
be relevant to both consumer and business
markets. However, Roth & Romeos findings were derived only in the context of
products for export, excluding other outputs,
such as tourism, foreign policy, education,
where such images are not so relevant. So is
it possible that there are images at a higher
level of abstraction that can represent all of
China?
Like most other nation brands, Brand
China is fraught with contradictions and
tensions, especially one of traditional values
versus modernity. On the traditional side, it
offers centuries of culture and heritage, with
associated brand attributes such as Confucianism, Yin & Yang, harmony of body and
soul, the philosophy of Tao, and ancient Chinese wisdom. Brand China could, in principle, embody a set of beliefs and practices
that can be used for living (eg Feng Shui),
business (eg applying Sun Zi Bing Fa to
business strategies), health (eg Tai Chi) and
others. Many of these attributes have allure
and qualities that western brands do not possess and are strong points of differentiation.
The traditional values embodied in Brand
China are well-positioned to meet the
emerging needs of those global consumers
who are now interested in concepts such as
balance between their personal and professional lives, alternative healing and holistic
health, and the pursuit of spirituality.
Roberts (1998) took this broader view and
proposed the high-level brand values of
China as wisdom, spirituality, harmony, invention, vitality, high intelligence and industriousness.
Brand China also embodies values and
images of modernity and progress. Under
the go global policy, there are Chinese corporations, which used to be OEMs, that are
moving up the value chain from low cost
manufacturing to creating greater value in

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industries that they are a part of. In the computer industry, Legend used the technological know-how it learned from being OEM
to develop its own brand for the domestic
market. Once it gained sufficient expertise
in the domestic market, Legend launched
itself into the international arena under the
new brand name of Lenovo. Lenovo has
since acquired IBMs Personal Computing
Division in early 2005 as its next strategic
move to compete in the global marketplace.
This implies a nation that is progressive, ambitious and achievement-oriented.
Ramo (2004) adds to the idea that, in the
future, Chinas brand image will be strong
on innovation by claiming that only through
new thinking will China be able to progress.
There has been a massive investment in education such that China will soon match
America in the number of doctoral degrees
it awards. Those who believe that an organizations external image is a function of its
internal culture (eg Davies et al., 2003) will
point to other changes in Chinese society;
an economy based upon competence rather
than ideology (Shirk, 1993) and the change
from looking inward to becoming a global
leader. These are then indications as to what
might be emphasized in Chinas branding
strategy.
Some final clues as to how Chinas image
may develop can be grasped by examining
other changes in the country. The new generation of Chinese leaders is calling for a
peaceful development. Shanghai as a city has
buildings that can rival any in the world for
their modernity and sophistication, contrasting with the heritage represented by other
symbols such as the Great Wall and terra
cotta warriors. More Chinese are travelling
abroad and more tourists are visiting the
country, changing stereotypes among westerners whose main symbol of China might
have more to do with Chinese restaurants
and takeaways than with the worlds most
dynamic economy. The way the nation is
seen to handle both the Olympics and World

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Expo will also be used by the world to refine

or re-define their image of the country.
These new symbols suggest that a stronger
brand image is evolving that can be built
upon to enhance non-utilitarian associations.
So, in conclusion, we do not expect China can nor will address all of its image challenges immediately. Rather we would expect
to see a nation brand emerging based upon
traditional Chinese values while incorporating modern ideas and they are evolving to
support a growing number of what will have
to be clearly Chinese brands. Research is
needed as to the image that Brand China
already possesses but more interesting will
be research that tracks how this evolves over
time.
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