China Will Boycott Foreign Brands – FutureSin – Medium

["Dave Farber" <farber () gmail com>]

> Begin forwarded message:
>
> From: Jan Ziff <janziff () soundbytesradio com>
> Subject: China Will Boycott Foreign Brands – FutureSin – Medium
> Date: January 14, 2019 2:11:00 JST
> To: Dave Farber <farber () gmail com>
>
> Thought your IP list might find this interesting - especially the penultimate paragraph.
> > https://medium.com/futuresin/china-will-boycott-foreign-brands-66ea09293cfb 
> > <https://medium.com/futuresin/china-will-boycott-foreign-brands-66ea09293cfb>
> >
> > China Will Boycott Foreign Brands
> >
> > The American Trade War with China is backfiring
> >
> > Michael K. Spencer <https://medium.com/@Michael_Spencer>Jan 12
> >
> > Chinese consumers are taking sides with a new fiery Nationalism
> > The danger of standing up to China is the impact of the Chinese consumer can hurt American and foreign brands. This 
> > is what the likes of Apple, Starbucks and so many others will find out in 2019. China’s boycott of US goods remains 
> > a real threat.
> >
> > A U.S. government shutdown and a trade-war truce are potentially a dangerous combination. The economic data out of 
> > China is not good and this means that Apple has had to cut its iPhone production to adjust. American brands that are 
> > dependent upon sales in China might be up for a rude awakening in 2019.
> >
> > China has a history of using challenges  
> > <https://www.cnbc.com/2018/06/20/chinas-boycott-of-us-goods-remains-a-real-threat.html>to its authority as a reason 
> > to commit economic punishments including telling consumers to boycott certain brands from particular countries. 
> > Luxury jacket maker Canada Goose seems to have been caught up in a political dispute between China and Canada in 
> > late 2018, but how many Chinese consumers can really afford Canada Goose or pricey iPhones?
> >
> > Retailers are slashing iPhone prices across China as consumers say the phones aren’t worth the cost, as Huawei gains 
> > even more relevance to Chinese nationalism and patriotic loyalty. Apple’s marketshare in China appears on a steep 
> > decline over the trade war.
> >
> > The Trump administration’s trade war is sending a bit of a chill across the Chinese economy and yet when the impact 
> > reaches America, it might be too late to avert an economic nosedive into the next global recession as the markets 
> > are fueled more by sentiment than by data in a volatile last three months heading into 2019.
> >
> > Apple CEO Tim Cook made a rare cut to the company’s sales forecast and as Apple goes so many foreign and especially 
> > American brands could go, down in China. Eventually, the era of Chinese consumers being acutely aware of US brands 
> > and actively seeking them out could fade in the 2020s. The longer the trade war goes on for the more likely that is 
> > to happen.
> >
> > THE WEAPONIZATION OF THE CHINESE CONSUMER
> >
> >
> > Meanwhile, China has begun to hold Canadian citizens in apparent retribution for arresting Huawei’s CFO. The problem 
> > is there are new documents that link Huawei to suspected front companies in Iran and Syria. China does not 
> > particularity seem to respect the legal proceedings of Canada or the United States and seems prone to peculiar acts 
> > of revenge.
> >
> > For China to use its own consumers against foreign brands then would be the biggest weapon, even if it hurts many 
> > Chinese companies who benefit from it. According to a previous survey 
> > <https://www.scmp.com/comment/insight-opinion/united-states/article/2161671/why-consumer-boycotts-us-brands-china-might>,
> >  54 per cent of respondents — drawn from 300 Chinese cities said they would “probably” or “definitely” boycott 
> > US-branded goods in the event of a trade war. It appears in 2019, we will all bear witness to such an event.
> >
> > New Chinese nationalism could be a force to be reckoned with. From Apple to Starbucks, to KFC to McDonalds a lot of 
> > American brand and fashion brands in particular could stand to suffer. Huawei and Luckin make sufficient 
> > alternatives to Apple or Starbucks for the majority of Chinese consumers.
> >
> > The survey found that the most likely boycotters were aged 25–29, had lower middle incomes and lived out of the 
> > major metropolitan areas. Both Apple and Samsung have noticed a slow in sales growth in the last few weeks, and if 
> > the trend continues it could boost made in China brands. Huawei is already expected to catch Samsung in global sales 
> > of smart phones sometime in the early 2020s.
> >
> > BOYCOTTS AND DIPLOMATIC THREATS
> >
> > China uses boycotts to punish foreign brands on a regular basis. You might remember the 2012/13-consumer boycott 
> > <https://www.scmp.com/business/economy/article/1124118/japan-counts-cost-islands-spat> of Japanese cars in response 
> > to disputes over islands in the South China Sea <https://www.scmp.com/south-china-sea> had a very sharp effect, with 
> > Japanese brands suffering a 32 per cent sales tumble over a 12-month period. But the impact on American brands could 
> > in particular be significant for the global economy.
> >
> > In particular the role of Huawei in Chinese cyber espionage seems to be a grave concern to the international 
> > community. The arrest of Huawei’s CFO in Canada has also led to some weird diplomatic repercussions 
> > <https://www.scmp.com/news/china/article/2181445/chinas-envoy-lu-shaye-accuses-canada-white-supremacy-huawei-case-op-ed>.
> >  The retaliatory arrests in China of foreign nationals is creating a culture of fear around China, right when China 
> > needs to learn how to lure and retain talent in fields such as machine learning, AI, corporate management and 
> > academia as a whole at the highest levels.
> >
> > The market is slowly understanding what could be occurring here. Goldman Sachs downgraded 
> > <https://www.cnbc.com/2019/01/11/goldman-starbucks-will-be-next-us-brand-to-warn-of-china-trouble.html> the stock of 
> > Starbucks, citing “a number of points of caution” in the Chinese market. I’ve been warning of this for a while now 
> > since Luckin is the default made-in-China coffee brand 
> > <https://qz.com/1325403/luckin-coffee-startup-challenging-starbucks-in-china-worth-1-billion/> that is being groomed 
> > and positioned to replace them.
> >
> > ByteDance could destroy Facebook in Asia in the next few years. Alibaba & Huawei could do very well in the Cloud and 
> > via smart speakers as well. For every imaginable service, there is or will be a Chinese brand that does it better 
> > save for maybe Google. I consider Didi on par with Uber in 2019 and Netflix will one day be only a shadow of what it 
> > is today. It’s arguably only Baidu which can never become Alphabet.
> >
> > The reality is Chinese technological superiority quickly comes after China attains economic superiority, and this is 
> > all less than a decade away now. The Chinese consumer is the epicenter of capitalism in 2019.




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