Branding China: The Ultimate Challenge in Reputation Management?

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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 nation’s 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, 198–210. doi:10.1057/palgrave.crr.1550025 KEYWORDS: China; Olympic Games; na-

tion brand; place brand; country of origin; public diplomacy

INTRODUCTION

Corporate Reputation Review, Vol. 9, No. 3, pp. 198–210 © 2006 Palgrave Macmillan Ltd, 1363-3589 $30.00

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.

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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 Ping’s Open Door policy in 1978, China has assumed the role of the global economy’s 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, China’s domestic market is also becoming ever more crowded and competitive as compa