How to make money in China, and how the country works as a powerbroker are the key subjects of The War for China’s Wallet: Profiting from the New World Order by author Shaun Rein. For NPR he tells what companies are doing well, but also why the Chinese censor might ban his book, as they did with previous ones.
Brancaccio: Now, international companies have a huge stake in figuring out how to crack this, and which companies are doing better do you think, Shaun, which are doing worse in understanding where China is going?
Rein: I think you see companies like Starbucks are doing really well. Apple’s also doing very well. For both companies, China is their largest market out of the United States. Another great example would be KFC — over 50 percent of their global revenue comes from China. So these companies are keeping their core brand DNAs, but they are localizing to fit the needs of the Chinese consumers. So for instance, with Starbucks, in the United States, I believe about 80 percent of their sales are takeout. In China, about 80 percent of their sales are dining in, because Chinese like to go feel part of an American culture, feel like they’re part of a globally sophisticated elite, and they’re able to do that by having coffee. Luxury in a cup.
Brancaccio: Before we go, I want to bring up something Shaun, I don’t know if it’s a sore subject, but I remember a couple of books ago, you wrote the book “The End of Cheap China.” That was not embraced in China, that book.
Rein: That book was actually banned in China. The Chinese government didn’t like it because it talked about local corrupt officials that were protecting the red light districts and really stealing from everyday Chinese. So that book was banned in the country.
Brancaccio: Getting any feedback on the new one?
Rein: The state-owned media has gone quiet on me. When they first heard that I was writing this book, “The War for China’s Wallet,” they wanted to interview me and profile me. After they saw the advance media copies, they stopped returning my calls. So I’m expecting that this book is going to get banned, too. And I’ll get a little bit of heat in the coming months.
Brancaccio: What do you think, what’s so controversial from the Chinese perspective about what you’ve just been talking about?
Rein: I think that the government doesn’t want people to know the framework that they punish other countries and companies if they don’t follow what they want. So I mean, if you look at it, when Liu Xiaobo won the Nobel Peace Prize, China blocked imports of salmon from Norway. Overnight, that dropped from about 80 percent market share down to zero percent.
Are you looking for more stories by Shaun Rein? Do check out this list.