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Human Rights in China: What Consumer Behavior Reveals

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During Hillary Clinton's recent visit to the PRC, she unsettled human rights advocates, Amnesty International included, with a rather blunt assessment of the current state of China and the United States' human rights dialog. She "decoupled" pursuing America's long-term goals of advancing "universal" rights with the short-term imperatives of stemming further environmental degradation and shoring up global financial markets. Her words were poorly chosen, signaling an ultra-pragmatic Obama administration insensitive to the plight of Chinese dissidents and other freedom seekers. However, the gist of what she said - i.e., human rights need to be put in a culturally-relative context to ensure mutual benefit - was surely spot on.

Consumer Preference: A Mirror of Chinese Values

To many readers, this adman exists uncomfortably on the fringes of business legitimacy. He is a sell-out cozily in bed with Orewellian dictators. He has made a Faustian bargain with the Chinese: liberty sacrificed on the plutocratic altar of economic return.

Perhaps. But Louis Vuitton is not an opiate. Legitimate communications do not "sell" products. They "position" them based on a "brand idea" rooted in: a) something physically "inside" the product that is truly different and b) a consumer "insight," a fundamental motivation to behavior and preference, often a conflict in the heart. Buzz words? Yes. But one thing is beyond dispute: to create successful brands in China, we have to know our consumers, what they want, what they aspire to and how the view the world around them.

Consumers' attitudes and preferences do not simply explain product category dynamics; they signal a different cultural universe, one that envelops a radically different moral world view. The PRC, unlike Occidental culture, considers human rights to be:

Pragmatic. They are not "inalienable," in a Jeffersonanian or Rousseauian sense. They do not emanate from the conscience of the individual. They must be a means to an end, rather than an end in themselves

Quantifiable. As John Stuart Mill argued early on, they should result in the "greater good for the greatest number of people."

Incremental. They must be achieved gradually, lest chaos, the ultimate evil, break out.

All this is reflected in how the Chinese buy and do business. And unless we recognize differences as fundamental and beliefs strongly held, we will never be in a position to encourage the Chinese to question assumptions of their moral universe.

Pragmatic Progress.

Chinese philosophy stresses the importance of stability as a perquisite to forward advancement. Confucianism considers mastery of mandated values as the only way to climb the socio-political hierarchy. Daoism focuses on achieving a cosmological harmony - i.e., assuming the shape of that which surrounds you - in order to "flow" forward. Legalism, a framework that bases law on punishment rather than rights, legitimized the barbarism the preceded the unification of China during the Qin dynasty. (Mao's moral transgressions are "70%" excused because he unified "New China.") The key point: concrete progress - individual, societal or universal - is never surrendered to abstract civil liberty.

The Chinese consumer landscape highlights this reality. Corporate social responsibility (CSR) does not impress unless individuals' lives are directly and positively impacted. Values-driven, point-of-view brands such as the Body Shop ("safeguard the planet") do not fare well. "Advocacy" sans tangible benefit lands with a thud or evaporate. Nike should not trumpet individualism without a payoff of peer endorsement. Nokia's "Connecting People" must represent more than emotional bonding; the brand should be a passport to success. Smart marketers such as General Electric understand this. During the Olympics, GE fused environmental protection, potentially an off-putting abstraction, with operational efficiency. Johnson & Johnson is beloved because it teaches mothers how to care for children. (J&J's network of neo-natal clinics is only one example of the company's pragmatic altruism.) Even luxury goods, often positioned as a "personal reward" in Europe and America, are marketed as "investments." Dividends are paid as status (i.e., "face"), the ultimate currency of advancement.

The Power of Scale : Quantifiable Impact

In China, human rights are top down, not bottom up. They do not spring from the God-given dignity of Everyman. They are defined and promoted by the powerful in the interest of collective harmony. Mencius' si duan - commiseration, sharing, courtesy and right versus wrong - are considered to be inborn but not worthy of celebration. Leaders are charged with harnessing positive human impulses for the greater good - i.e., a stable society, lower poverty rates, higher education levels, higher life expectancy and so on. Leaders fall if they fail to advance collective (i.e., the interests of the majority) well-being. They forfeit Heaven's Mandate. Protection of "sacrosanct" rights is not, and has never been, been an important KPI.

(As the financial crisis whips up uncertainty, the Communist Party more popular than ever. From peasant to hipster and worker to titan, the vast majority supports the government for its stimulus package, health care reforms and job training initiatives. Structured on a grand scale, these programs will maintain social order. No one, on the other hand, clamors for representative democracy.)

Scale is revered due to: a) the absolute authority capable of forging it and b) respect for the benefits yielded by it. This reverence is reflected in many brands' appeal. Microsoft is admired because his operating software conquered the world and made it more efficient. Alibaba's Jack Ma is a hero because he built a new (global) model of online business-to-business transaction facilitation. IBM is actually cool. Most foreign brands are actively preferred to local trademarks because global heft reassures. (That said, local banks are trusted because they are ubiquitous so HSBC and Standard Chartered will never transcend niche - i.e., upper middle class -- status. Richard Yorke, HSBC's China Chairman, wants consumer to think of the bank as the LVMH of personal finance.)

A big brand comforts. Size counts. Haier, the appliance manufacturer, is appreciated for its size and expansive service network, not because its products are particularly innovative or attractively designed. "Stretchability of brands" is a distinct feature on China's marketing landscape because bigger is better. In developed countries, basic product quality is more or less assumed. On the Mainland, an environment of fake goods and no consumer protection, new brands are eyed suspiciously; furthermore, establishing their credibility is an expensive proposition. (Media rates in Beijing and Shanghai and Guangzhou are no less expensive than in Chicago or Sydney.) Brands, therefore, tend to extend across relatively unrelated categories. P&G's Olay, for example, covers everything from its premium "anti-aging system" to mass-market shower gel. Unilever's Hazeline is a soap, shampoo, conditioner, and skin cream. Chunlan churns out everything from air conditioners to motorcycles and consumers don't bat an eyelash.

Sublime Incrementalism

"Enlightenment," in the Middle Kingdom, is dangerous. It smacks of epiphany, an impulsive, come-to-Jesus embrace of Truth. Western "Rights of Man," and the inherent rights of a man or woman, are morally absolute. In China, Western individualism - i.e., elevation of "me" as the basic productive unit of society - is regarded as impetuous, inherently destabilizing. Human rights "breakthroughs" will never happen here and, further, they are not demanded by the people. Yes, people insist that economic interests are protected - property, homes, insurance, health care. These are important to everyone, everywhere. But they recognize progress will be incremental, a result of a structured, meticulously orchestrated approach to reform. They also accept that, in the process, there will be winners and losers and, assuming more winners than losers, sympathy for the dispossessed (or imprisoned) will be muted.

Given China's fear of chaos, human rights framework will not be "granted" or "liberated." A framework will continue to be "built," extended over time. The People's Congress will gradually be empowered. The judiciary will, step by step, become independent from the party apparatus. The press will expand its role in exposing official corruption. Social safety nets and comprehensive health care coverage will be stitched, slowly but surely, in a manner consistent with the imperatives of a "harmonious society" (i.e., social stability at all cost, measured reallocation of resources). Intra-party "democracy," checks and balances required to avoid abuse of power, will bloom overtime, albeit tortuously, under the radar. (Any apparatchik under the age of 50 openly discusses the inevitability of political reform. But no one - even Western-educated officials -- believes that representative democracy is a viable path for the People's Republic.)

Businesses and Consumers: Fear of Jolts. Chinese corporate strategy also belies faith in pragmatic incrementalism. Every company has a five year plan. Despite the English business press' obsession with the "threat of Chinese brands," practically all manufacturers realize they are not ready to compete head-to-head again American or European brands; they are focusing on getting mainland fundamentals right. Corporate governance reform has been measured (even, yes, plodding). It is usually catalyzed by initial public offerings (IPOs) on foreign exchanges to compel adherence to international accounting standards. To prepare for 3G, the restructuring of the telecommunications industry has been a case study in metronomic gradualism. (Behind-the-curtain machinations were worthy of kabuki theatre.)

Chinese shoppers, like their corporate mandarins, fear abrupt change. Foreign over-the-counter (OTC) pharmaceuticals are recognized for "efficacy" but avoided because of harshness. (Chinese medicine is slow-acting and preventative; Western remedies are quick and curative.) Female shampoo users trust "natural" ingredients (e.g., Hazeline's "black sesame for black and shiny hair") because they gradually release "beauty from within." Anta, a mass market tennis shoe manufacturer, champions a "forge yourself" spirit via a tagline, yong bu zhi bu! (Literal translation: eternal-no-stop-step.) Middle class women love diamonds because they "seduce," not "grab attention"; they "sparkle," not "glare." Premium cars and luxury fashion brands are positioned based on "mastery of detail" or "connoisseurship." Johnny Walker's "Keep Walking" resonates because it frames forward advancement as a relentless journey, not a sudden ascension to superhero status.

Rise or Fall, Together

As Hillary Clinton said, China and the United States will either rise together or fall together. Opinion leaders should promote their worthy objectives of advancing Western concepts of human rights by helping the Chinese understand compatibility with their predilection for both stability and order and advancement, both individual and collective. If we fail to embrace cultural relativism, China and America, on so many levels the yin and yang of 21st century prosperity, we forever preach doctrine rather than engage in productive dialog.

If you don't believe me, listen to Chinese consumers.