An article by the Financial Times entitled, Chinese Consumers Prefer Own Products, discusses the implications of a recent McKinsey survey that concludes most Chinese consumers trust domestic brands more than foreign ones and also shows that Chinese consumers are increasingly confident about the quality of products made in their country.
The Financial Times touts this survey as a "stark warning for multinational companies about nationalist sentiment in China’s booming market." However, we think the Financial Times fails to see that if this survey is true, then we will see an even greater downturn in intellectual property piracy in China, which is good news for foreign investors. One of the primary concerns of foreign investors in China is IP protection, and we have said in the past that the Chinese will become more vigilant in the enforcement of IP laws as they increasingly produce more homegrown products. The fact that most Chinese consumers prefer their own products means that the Chinese are producing their own products and the Chinese people are proud of these products. Consequently, they will be less likely to permit the piracy of these products, which will also require protecting foreign IP.
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