West hypes 'China Threat' for profit

Updated: 2012-10-18 17:50

By Tom McGregor (China Daily)

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Many US political candidates believe that criticizing China can help them win elections. Apparently, some businesses have discovered that warning the world about a so-called 'China Threat' theory could be a lucrative marketing strategy as well.

China's economy has risen to remarkable heights in the past three decades, and the world's second-largest economy may soon rank number one. Many Chinese companies have earned substantial profits and are poised to expand much more.

Many multi-national corporations based in the West are fearful that their Chinese competitors would eclipse them, which can slow down their revenues and profits stream. To maintain sizable market share, they must fight back or fade away.

Western multinationals can utilize different strategies to challenge Chinese rivals. They could lobby elected officials to legislate tougher trade laws, impose higher tariffs, or declare Beijing a "currency manipulator".

Related reading: 'Currency manipulator' accusation not helping US

Yet, these political weapons would be too harsh since American consumers love to hunt for bargains. A trade war would just spark higher import inflation. It's better for lawmakers to bluff Beijing, so as to appear tough without having to suffer the painful consequences.

Meanwhile, a few Western firms have utilized a different tactic, which is to mock Chinese companies as "shoddy, secretive and incompetent, because Western companies usually sell goods and services that are more expensive than Chinese brands. They argue that better quality should trump lower prices.

Yet, this type of publicity campaign has lost its effectiveness since many Chinese companies have upgraded their manufacturing and services capacities, while continuing to sell at lower prices.

So when all else fails some business people see the value of engaging in fear mongering and spreading "Red China" conspiracies. A few are even cashing in on the ploy, and getting very rich in doing so.

Austin, Tx. US-based radio talk show host Alex Jones has captured a loyal fan base by warning his listeners that the Chinese government is allegedly plotting to invade the USA.

He spouts this foolish conspiracy while earning millions of dollars with advertising deals that promote "apocalyptic survival gear". He urges listeners to buy food in bulk packages on "eFoodsDirect", which they can store in nuclear fallout shelters. He contends that World War III is coming soon.

Fortunately, few Americans take Mr. Jones seriously, but CNBC, a cable TV business news network, is a well-respected media outlet in the country. The broadcaster has promoted a series of special investigative reports last July called, "Cyber Espionage: The Chinese Threat".

On its Web page, CNBC anchor David Faber is quoted as saying, "an unseen army of hackers from China are on a mission – to steal from American business. CNBC takes you inside this new wave of espionage and the battle to protect America's security."

Sounds shocking, but upon closer inspection the stories give vague generalizations of its accusations without citing specific hard evidence. The news coverage appears to promote cyber security firms – CrowdStrike and PwC's Forensic Services in a report, 'How to Defend Against Cyber-attack."

Nevertheless, CNBC's TV investigative reporting has created a powerful impact, according to National Public Radio.

"Over the past decade, Chinese companies have become major players in the global telecommunications market. This week the House Intelligence Committee issued a report that could interrupt that growth. The committee warned American companies not to do business with two of China's main telecom manufacturers (Huawei Technologies and ZTE Corp), saying they posed security threat."

The committee accused Huawei of selling telecom equipment with devices that could spy on US networks. However, after an extensive review by the White House, US intelligence agencies and other departments, an official report concluded that there is "no evidence of Huawei spying" according to Reuters.

Yet again, another "China Threat" conspiracy theory gets debunked. Certainly, many Westerners will continue to worry about a rising China, but pursuing better cooperation with the country could prove to be a more pragmatic and fruitful solution.

The views do not necessarily reflect those of China Daily.