Archive for July, 2015

01/07/2015

China’s Communist Party: Still Big, and Getting Bigger – China Real Time Report – WSJ

Quality over quantity. Less is more.

Those have been the watchwords of the Chinese Communist Party ever since its top leaders declared in early 2013 that its membership would be controlled in a bid to improve the organization’s “vigor and vitality.”

Two years later, the upper echelons of Chinese leadership appear to have come face to face with a realization that’s true all the world over: slimming down is hard to do.

In a communique released Tuesday, the Organization Department of the Communist Party’s Central Committee said that the party boasted 87.793 million members as of the end of 2014. The figure – which exceeds the entire population of Germany – represents a net increase of 1.1 million from a year earlier.

China is in the midst of a sweeping anti-graft campaign under President Xi Jinping, with announcements of corrupt officials’ investigation and ouster from the party a near-weekly occurrence. Along with that crackdown has come a steady stream of warnings for party members to rein in behavior ranging from their mahjong playing to the use of terms like “dude” or “boss” when addressing their superiors.

At its heart is the pursuit of the party’s survival. Xi and other top leaders have made a point of reminding cadres that the Chinese Communist Party must avoid the same pitfalls that brought about the demise of the former Soviet Union – particularly disloyalty to Communist ideals – with some Chinese scholars warning that the Soviet collapse came when the ranks of its Communist Party had swollen to an unwieldy 19 million, or nearly 10% of the Soviet Union’s adult population.

The membership of the Chinese Communist Party currently stands at about 7.8% of China’s adult population.

Yet despite a vow by China’s Politburo leaders to limit the party’s size and purge “unqualified members,” statistics released by the Organization Department show that membership has actually grown over each of the past four years, albeit at an increasingly slower rate.

via China’s Communist Party: Still Big, and Getting Bigger – China Real Time Report – WSJ.

01/07/2015

Foreign Brands Losing Luster in China – China Real Time Report – WSJ

Move over Western brands, Chinese companies are taking over.

China’s 1.34 billion-plus consumers are filling their shopping baskets with Chinese-branded toothpaste, laundry detergent, juice, cookies and more, according to a new study from consultancy Bain & Co.

Local Chinese companies have become more competitive and are leveraging their strength in smaller cities, where growth rates are higher than in top cities like Beijing and Shanghai, according to the study, which looked at the shopping habits of 40,000 consumers.

The result is that foreign brands are losing market share in large consumer goods categories–such as personal care, home care and packaged foods– all across China, from its biggest to smallest cities, Bain said. And sales growth, which is dwindling as China’s economy slows, is going primarily to Chinese companies, such as fabric-softener maker Guangzhou Liby Enterprise and juicer Tian Di No. 1 Beverage, it said.

While that’s good news for Chinese brands, it’s nothing to cheer about for global companies, which have been banking on Chinese shoppers to boost their sales. China’s economy is also slowing, meaning that the days of easy money in China are over and tireless boardroom references to “China’s emerging middle class” as the saving grace may soon be put to rest.

Some companies, like Best Buy Co. and Home Depot Inc., have either exited or are rethinking their goals in China. Best Buy Co. sold all its remaining stores in China last year, citing online competition.

But there’s still growth for many foreign brands. Foreign makers of beer, chewing gum and hair conditioner are still gaining traction and market share from Chinese companies, according to Bain.

Below are charts from Bain & Co and Kantar Worldpanel showing how Chinese companies are standing up against foreign rivals at retail and in consumer products.

via Foreign Brands Losing Luster in China – China Real Time Report – WSJ.

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