Trade Friction from Both Sides?

Hard to know what to make of this article in ASHI Weekly Asia-Foreign Firms Feel the Heat from Chinese Backlash. Local Chinese governments are “now finding ways to ‘bash’ foreign firms for doing business in China. Famous brand names in particular, such as Louis Vuitton, Burberry and Starbucks, are finding themselves the target of this sudden backlash.”

Foreign imported shoes are considered too expensive and not up to snuff. The Chinese burned the shoes. But shoes the Chinese exported to Spain were met with a similar fate: Burned as cheap imports.

In 2006, Zhejiang provincial authorities said notebook computers manufactured by four foreign companies, including Toshiba Corp. and Hewlett-Packard, had failed to meet quality standards to deal with lightning and other problems, and ordered a suspension of their sale in the province.

Apparently, the trade “fricition” has more sides than we thought.

The industry and commerce bureau of the Shanghai city government ordered a number of stores to pull 25 kinds of apparel of foreign brands, including Chanel, Burberry and Armani, from their shelves in January, citing poor quality. Most of the clothing was imported, with some items priced as high as 60,000 yuan (930,000 yen).

The Shanghai government, some say, acted in order to “bash” wealthy Chinese who can afford to buy such luxury goods.

“The Shanghai government is criticizing people for their desire for foreign brands, and is urging them to place importance on a reasonable and simple lifestyle,” wrote the French newspaper Le Figaro.

I am not sure where all this is going, but it might be interesting.