Selling in China More Difficult Than in the West
Western models of marketing have tried to dominate worldwide. As countries like the United States, Germany, and Australia rose to become strong economic powers while globalization occurred, they attempted to push their sales and marketing techniques onto customers in other countries. The thought was that styles which work at home on products should work anywhere on those same products, and ad campaigns were launched across the world in that spirit.
Of course, people do not work that way. While Coca-Cola may stand for freedom, friendship, and fun in America, someone in China may not be interested in such things. At the very least they will not be interested in the same ways and a message to them must be catered differently. As powers came to see this, new projects were launched to crack the code of different states. China, however, has proven to be a very difficult case.
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Sales and marketing in China may not be as simple as in the United States or similar countries. In the West, a model of branding has risen that provides steady results. By appealing to the emotion of a customer companies have found they can usually find customers for their products. Levi’s does not sell jeans – it sells comfort. Coors does not sell beer; they sell the Rocky Mountain Way.
In China, branding has not proven as successful. Some things have worked in this way, but for different reasons. In the past, Levi’s have been popular in other countries not because they sell comfort, but because they are American. By selling American products in foreign markets, companies were able to successfully brand. But those days seem to be ending as new powers take America’s place and China tries to understand its own brand.
Finding a Solution
Much of the problem is that large markets cannot be pulled from the population. While Americans can be divided into large groups of interests, it seems that is harder to do with the Chinese. This makes it difficult to market a brand to a specific group because that group is rarely large enough to support such a marketing and sales campaign.
With time, it seems likely the key to sales and marketing in China will be found. Certain things make certain people tick – you just have to find out what those things are. The challenge companies face is not cracking the code, but rather cracking it before every other companies in China manages to.
Domestic Goods in China
China is a resource-rich country with the ability to produce most any item it requires. Mineral resources provide it with all the metals it needs, and the country also holds large oil and natural gas deposits. As such, the goods made in the state vary greatly in use, materials, and purpose. For example, machinery is one of the largest fields of industry in China, and items such as automobiles, textile tools, and turbines are efficiently made. From the metals found in China’s ground, iron and steel are integrated as raw materials as well as used in the machinery factories created.
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High Exports and Low Imports
In light of its power to make nearly any item it needs, China’s main focus in fueling its economy is exports. Of the goods it creates, China exports over $1.5 trillion worth to other countries. As such, it holds a great deal of economic power as a major global producer.
China’s thriving export economy makes it a great deal of money. As a result, the nation attempts to limit the number of goods it imports to remain fiscally balanced. This places a premium on domestic goods, which the state pushes on its people. While the West may view this as manipulative, it seems to work with great success for the nation as a whole. Domestic sales keep up with production, and the demand for Chinese goods in China itself is substantial. This helps balance the country, keeping it from having to look outside its borders to replace the goods it exports.
This is important, as it would most likely be quite costly to bring in the same kind of goods it puts out. While the United States can export goods while importing the same items from countries like China, it is able to remain profitable. As U.S. goods require higher prices, the state can afford to buy cheaper products of the same sort from other producers. As Chinese items sell at low prices, they cannot. This means keeping domestic items in the country as well as out is very important.
Of the countries that have shown outstanding growth in past decades, China must be the most impressive. Following the fall of Russian communism, it seemed unlikely that state ruled economies could succeed. Through their hybrid-planned economy, China has become an exception to that rule. By creating domestic products at an incredible rate, exporting them and limiting their imports to a minimum has demonstrated that China is self-sustainable in the global economy.
Taxes in China
Taxes are the single largest and most important form of revenue for the People’s Republic of China. In 2008, China’s gross tax income was nearly 930 billion dollars, and has increased nearly 10% in 2009. The Ministry of Finance is responsible for all tax affairs in the country. Future tax efforts of the country plan to cut taxes for corporations up to 9%. Manufacturing is a large industry in China and hopes of decreasing taxes for these corporations may increase productivity. There are 26 different types of taxes in the People’s Republic of China. They are divided into 8 different categories. A few of the categories include types of property, agricultural, and income taxes. Foreign taxes do not follow the typical structure of governmental taxes. Companies with foreign entities are often treated with foreign tax laws. Most foreign tax laws work with corporations to provide breaks in tax law in order to increase economical output.
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The overall tax policies are decided by the Ministry of Finance in China, but are enacted through several other agencies of the government. Local tax laws do not always follow the same procedures. Tax law creation follows a strict four-step process. The four steps include drafting, examination, voting, and promulgation. Legislation also provides tax provisions with over 60 foreign countries and entities.
Ministry of Finance
The Ministry of Finance of the People’s Central Government oversees all major tax laws along with the annual budget and statistics for the country. Some lower level expenditures and regulations are overseen by this agency also. The ministry often publishes public and private information on the past and current economic trends of the People’s Republic of China. The Ministry of Finance does not handle interest rates, banking regulations, and other similar financial aspects.
The State Administration of Taxes is the agency that enforces tax law, and is the highest tax authority in the People’s Republic of China. Generally, the SAT reviews economic policies and governs how to control the overall macro-economy. The SAT also deals with the collection of central, agricultural, and shared taxes. Internationally, they work with external buyers and conventions to appropriate certain tax laws. Perhaps one of the largest duties the SAT deals with currently is the determination of taxes for education and how programs are funded with tax revenue.