[Square] China, Aren't You Boycotting American Products?

Seungchan Park, Professor of Chinese Studies at Yongin University / Director of the China Business Research Institute

On the 12th of last month, the first Shake Shack (commonly known as Shack Shack Burger) store opened in Sanlitun, Beijing, China. Despite the heavy rain and the ongoing US-China hegemonic competition, a remarkable scene unfolded where people lined up for 3 to 4 hours to eat what is considered a symbol of New York, USA. In fact, such scenes are not unfamiliar in China. On the day Costco opened in Shanghai in August 2019, thousands of Shanghai consumers visited, creating a massive crowd. It is also common to see people lining up overnight whenever Apple releases a new product, and Starbucks stores are filled with young Chinese people. According to a survey on US-China relations (6 questions) conducted over two days from the 10th to 11th of last month by Global Times, a sister publication of the People’s Daily, more than 140,000 Chinese netizens voted, with over 97% of Chinese respondents expressing that China should retaliate correspondingly against US sanctions. When asked, "Do you like the United States?" over 90% gave negative answers such as "I never liked the US" or "I used to like the US, but I like it less and less." In this atmosphere, why is there no boycott of American products, and why are they instead gaining popularity?

First, it is due to the sentiments and cultural tendencies of the Chinese people. Generally, Chinese people have a great admiration and curiosity toward Western culture, especially American culture. This is different from 'cultural servitude (事大主義),' which regards advanced cultures as superior and one’s own culture as inferior. It is characterized by a mixture of envy and expectation toward the West’s excellent content capabilities and advanced ways of thinking, while simultaneously holding a strong pride in Sinocentrism. After the results of a survey conducted by the US public opinion research organization Pew Research Center were released on July 30, public opinion toward the US in China began to cool. The survey showed that 73% of Americans have unfavorable views of China, indicating that anti-China sentiment among Americans has peaked in the past 15 years. Although tensions exist between the two countries, the younger generation, based on China’s Generation Z, seeks to create an invisible social status and their own 'Xiaozi (小資, petite bourgeoisie)' conversational space through purchasing and enjoying American and European products and services. Xiaozi refers to a young demographic that aspires to Western ideas, lifestyles, and consumption patterns, pursuing material enjoyment, and showing very different characteristics from the older generation.

Second, the invisible hand of the Chinese government has not yet come into play. If influential opinion leaders within China begin to sharply criticize the current craze for American products and launch so-called 'patriotic marketing' invoking Sinocentrism, the buying frenzy could quickly subside. This could trigger even greater repercussions. A boycott of American products within China could accelerate the withdrawal of American companies from China. In such a case, the Chinese government’s publicly declared stance on opening the service market would become difficult to maintain. Especially for the government, which needs to attract more foreign companies to reduce the increased service sector unemployment caused by the COVID-19 pandemic, a misstep could backfire as a larger economic setback.

Some media reports about American companies withdrawing from China are somewhat exaggerated. American companies are currently making money in the Chinese domestic market. It is not easy to give up and leave the market led by the Xiaozi demographic. Taco Bell, a representative American fast-food chain, is reportedly planning to open its first store in Beijing. While we are busy criticizing and reporting negative news about the Chinese market, American companies, the main parties in the US-China friction, are quietly reaping practical benefits. It is essential to properly understand and approach the Chinese market.