William J. Holstein

CHINA WATCH--Why Emerging Chinese Companies Have Such Difficulty With Branding
JULY 27--An obscure article in today's Wall Street Journal contains some profound truths.

The article by Kathy Chen, from a Chicago dateline, features a Chinese man by the name of Jack Yang who is attempting to promote a line of dashboard mounts for GPS devices and similar gadgets.

To promote his products, the article says he has teamed up with two American branding and distribution services--a tack many Chinese companies have declined to take.

"Like many Chinese businessmen, Mr. Yang has spent little time in the U.S., speaks virtually no English and had no idea how to navigate the U.S. market," the article says.

Then, tellingly, it quotes him as saying: "It's not that small- and medium-sized Chinese companies don't want to develop global brands. We don't know how. We don't understand the U.S. market, culture or business model."

That explains the fundamental challenge the Chinese are facing if they hope to produce 200 of the world's 500 largest global companies. They have to overcome a huge cultural barrier.