China Standards 2035

The Dream of China to be the Global Leader of Technology

As Europe and the world grapple with the Covid-19 crisis, China has quietly released their latest economic plans. The China Standards 2035 is a blueprint for China’s government and Chinese technology companies to set global standards for emerging technologies in areas such as artificial intelligence and advanced communications technology. Beyond simply strengthening technological influence, these measures provide a springboard for Chinese brands in various industries to grow and implement new business models that will serve as a standard for the rest of the world. The message is clear: China’s growth ambition is immense and nothing seems to be stopping it.

Clémence Jarry, Asia Marketing Lead at WITH, lays out the meaning of these new standards, while illustrating the growth opportunity that China presents for global brands of all sizes.

The Birth of the Five-Year Plan to guide China’s Economic Development

Since the establishment of the People’s Republic of China in 1949, five-year plans have been a major tool in their economic development. Since 1953 (the year of the PRC’s 1st plan) there have been 13 five-year plans. The eleventh plan rolled out from 2006 to 2010, laid out objectives for doubling the GDP of China while also improving energy efficiency. This plan further laid the groundwork for the competitiveness of businesses, international expansion, education, quality of life, and the development of legal frameworks to move towards a more harmonious and secure society.

Alongside these 5-year plans, since the 1990s, China has also published ten-year plans with the goal to define a forward strategy for the national and international scope of the country. These plans are based on two major issues:

  • For the domestic market: Place barriers to protect it from Western control
  • For international markets: Establish and increase Chinese leadership

Different plans have been rolled out by the Chinese government and most recently a new slogan has emerged, Go-Out. In other words, encouraging Chinese companies to invest overseas.

China’s Go-Out Strategy sets the stage for Internationalization

Elected in March 2013, Xi Jinping became the leader aiming to bring about a new era positioned around the concept of the Chinese dream. This dream is centered around an increased presence of China on the international scene, a proactive ecological policy, a renewed focus of traditional Chinese culture, and a radical strengthening of its influence. In short, this encompasses the CCP’s political and ideological influence on society.

The Belt and Road Initiative, (一带 一路) or the New Silk Road , was rolled out to consolidate China’s hold on the world. Its goal: to connect the countries set aside by the great Western powers, by ways of an investment of almost 1 trillion€ in order to provide them with the necessary infrastructure (communication, transport, etc), to fight terrorism, extremism, and separatism.

China’s aim is to gain control of the next wave of an industrial revolution revolving around automation and green energy. Due to this this ambition, the government is publishing its initiatives around Strategic Emerging Industries (战略性 新兴 产业) by investing massively in the renewable energy sector, new information and communication technologies, medical technologies and engineering, and automation of industries as a lever of economic growth for the country.

In 2015, the Made in China 2025 plan (中国 制造 2025) was established in order to implement all the resources necessary to achieve their objective of 70% independence on new technologies in the domestic market, and establish their international technological leadership by 2049.

The road seems to be mapped out to establish China as a global power.

 

From Plans to Standards?

We find ourselves today in 2020 witnessing China publishing (almost silently) its new ten-year plan, the China Standards, in the midst of the Covid -19 pandemic. In the Chinese government’s agenda, 2020 marks the transition between the end of the 13th five-year plan and the beginning of the 14th plan, which is based on the notion of standards.

The Chinese party has stated, “First-class companies do standards. Second tier companies do technology. Third-tier companies do products.”

How do we define the notion of standards? Global industries use standardized processes and specifications to ensure that products are designed to work together seamlessly. If each country or company set its own standards, technology products would not be able to work with products made by companies based in other markets. Indeed, standards allow products to be designed and manufactured on a large scale and used around the world.

Since China developed their digital sphere of influence later than other countries (China began developing this area in the 2010s), they failed to contribute their standards around mobile and software industries. Indeed, iOS and Android remain the market leaders and Huawei has suffered greatly from the withdrawal of Android initiated by President Donald Trump.

Its new battleground will therefore be the Strategic Emerging Industries mentioned above by identifying new sectors: 5G networks, biotechnology and vaccine development, robotics, drones, new technologies, green technologies, autonomous vehicles, and new digital business models.

Seize the Opportunity to Increase Chinese Leadership in the Age of COVID-19

The management of the COVID-19 crisis is an illustration of this new political and economic turning point. China has only one mindset: accelerate the development of methods of prevention and detection of COVID-19 as well as promotion of standards of emergency responses, social prevention and protective equipment. These standards are coupled with recommendations around the management of the logistics chain, the mode of urban and rural governance, and plans to restore jobs and industry.

Take for example BAT (Baidu, Alibaba, Tencent), one of the major stakeholder groups in the management of this pandemic. Beijing has given full powers to Baidu, Alibaba, Tencent to actively involve them in the fight against the virus. These technologies have been used on two aspects to:

  • locate people with symptoms and those in contact with a person tested positive
  • accelerate the development of medical aid using the 4Ps: prediction, prevention, personalization of care, participation

There are multiple deployments of these technologies.

Since February 11, the Chinese government has partnered with Alibaba and Tencent to develop QR codes that record each user’s health history.

Alibaba’s cloud computing arm, AliCloud, has developed a prediction system to detect coronavirus infection using CT scans performed in less than 20 seconds with a 96% success rate

Tencent for its part has opened a feature integrated into WeChat, WeDoctor, an interface for connecting more than 3,200 hospitals, 360,000 doctors, and 15,000 pharmacies with some 210 million users registered on its platform. By monitoring patient indicators and their medical history, the application will be able to offer a pre-diagnosis and prioritize appointments with appropriate specialists.

Baidu launched, through their search engine, an online and free medical consultation platform that connects doctors to patients allowing them to answer all types of questions related to COVID-19 (with over 15 million questions answered by a pool of 100,000 doctors). Baidu has also opened up its LinerFold algorithm to scientists to better understand the genetic makeup of the coronavirus and help in vaccine development.

China will therefore be one of the first countries to contain the epidemic and to document its research in several languages ​​to facilitate the understanding of other countries and contribute to the standards of response to the crisis.

What are the Impacts for Companies?

If you think that the China Standards stop with the industrial and technological sector, you are mistaken. Beijing’s standardization plan follows a broader agenda.

Develop Attraction Towards Chinese Brands in the Food & Beverages and Retail Sectors

The food and retail sectors were also addressed by standardization. This was done in various ways such as the publication of safety standards (for quality control), packaging innovations, and as well as using the right type of soil to support local farmers in their farm’s development.

Chinese brands are now positioning themselves as a real alternative to Western brands. They now tend to position themselves towards a younger audience in search of a return to their identity and roots. Chinese brands are reinventing themselves and mastering brilliantly inclusive communication codes and seamless mastery of Chinese digital platforms.

Take for example Neiwai, a Chinese underwear brand, which has adapted its storytelling by promoting all kinds of beautiful body types. This technique of storytelling was then taken up by Victoria’s Secret by choosing as ambassador Zhou Dongyu, as new muse to explore the definition of sex appeal.

These are inclusive and locally relevant communication strategies that Western brands should try to adapt and learn from in order to keep up with the trends.

The Development of New Digital Business Models

The service sector is not being pushed aside either. The government’s goal is clear: to become pioneers in e-commerce, delivery, online finance, supply chain and the digitalization of tourism (which will be the subject of a future article), among others.

Throughout this Covid pandemic, Chinese brands continue to be masters of the art of circumventing the difficulties linked to social distancing (due to pandemic restrictions): through private traffic, teleconferencing reinvented in this all-digital age, or even live-stream sessions with superstar influencers who hyped the products they were promoting by creating quality video content focused on the interests of their audience on Douyin with direct integration to an e-commerce platform.

The agility of Chinese brands in their management of the crisis but also their ability to find business models at the crossroads between social media and e-commerce should serve as inspirations for European brands.

The changes that the Alibaba group has integrated prove that they have been making the right decisions. Live-streaming is at the heart of their strategy for facilitating key moments such as Single’s Day. Investments around the Cainiao group’s logistics chain continue to intensify in order to ensure greater national but also international coverage to allow Western brands to launch into the Chinese market via an e-commerce tool called, Tmall Global.

Whether in the industrial sector or goods of all categories, the government is building a standardized production chain under its rule.

Conclusion: Adapt your Strategy to Chinese Expansion

China is therefore placing its pawns on the future world chessboard. From its investments in new sectors to its support for tomorrow’s audiences, the CCP is betting on its rebirth. By creating global habits and dependencies, the new standards thus contribute to the development of a significant future economic weight.

What impact will these measures have for the rest of the world? China, having emerged the winner from the pandemic, now finds itself in a position of control. Their aim is to contain global superpowers and avoid getting knocked over while maintaining a balance of power that is essential.

It is therefore the role of every marketer to study, understand and, if possible, plan a powerful new marketing approach. Thus, several solutions are available to us:

  • The study and understanding of Chinese ecosystems, to align with emerging business models (e-commerce, consumption)
  • The entry into the Chinese market or the development of a strong positioning in China (strengthening of international standards)

At WITH, we believe that China represents a triple opportunity: to maximize revenues within this market,  to establish yourself there if your business is not there yet, or to simply understand the standards, in particular within the digital sphere, which China is exporting to the world.

China has been able to be creative in attracting a young audience and establishing new digital models. We can help you decipher them, adapt them to your brand needs, and identify the “best practices” to position yourself in this new ecosystem.

Both for large groups, but also for more niche brands, we want to become your trusted partner in China. Whether it is a cross-border e-commerce strategy, a brand positioning localized strategy for a local Chinese audience, or even acquisition levers combining branding and conversion, the field of possibilities are wide. We ask you, what if we started this discovery of China together?