Local economy riding on back of big three and good taste

QINGDAO: As one of the most dynamic economic entities on China's east coast, Qingdao is fueled by local companies whose brand names appear right around the world.

Washing machines, air conditioners, refrigerators and TVs made by the Qingdao-based big three of Haier, Hisense and Aucma can be found in appliance shops and homes right across China.

"Famous enterprises and their products are the core issue in Qingdao's economic development," Mayor Xia Geng said.

With two internationally recognized brands and 54 household names in China, Qingdao was hailed the "Chinese city of famous brands" by the National Bureau of Statistics in 2005.

Refrigerators, cabinets, air conditioners and washing machines made in the city dominate more than 50 percent of the domestic market.

Haier products are sold in 12 of the top 15 chain stores in Europe and 10 in the USA.

Its products are now approaching the company's goal of being "local" in American and European markets courtesy of localized design and sales processes.

Haier has set up production plants in the USA, Italy, Pakistan, Jordan and Nigeria and is the only Chinese brand listed in World Brand Lab's 100 Most Influential Brands.

According to ratings issued in June, Haier ranked No 3 among its Chinese counterparts and in the top 100 worldwide.

In 2006, Haier earned 108 billion yuan ($14.27 billion) in revenue.

Its brand value was then estimated to be 74.9 billion yuan ($9.89 billion).

In the same year, Qingdao's GDP ranked No 1 in Shandong Province and No 10 nationwide.

Qingdao's other world-famous brand - Tsingtao Beer - maintained a double-digit increase in production, sales revenue and profits between 2001 and 2006.

With 50 breweries in 18 provinces and cities, Tsingtao Beer now rules 13 percent of China's beer market.

Tsingtao Beer exports 70,000 to 80,000 tons of beer to more than 50 countries and regions each year in an ever-growing quest to quench the thirst of foreign drinkers.

Ardent fans in South Korea have even established a Tsingtao Beer Association.

The World Brand Lab ranked Tsingtao Beer top of all Chinese brewers because of its remarkable brand value - 22.47 billion yuan ($2.96 billion).

Tsingtao Beer brewed 4.54 million tons of beer last year, profiting 640 million yuan ($84.4 million)

"We paid 310 million yuan ($40.87 million) worth of tax in 2006," Tsingtao Beer board chairman Li Guirong said.

Famous brands have become Qingdao's draw card, accounting for more than 50 percent of the city's economic power and spurring relevant industries.

They are also playing a leading role in driving exports, taxation revenues and technical innovation.

Qingdao's famous brands are also cooperating with multinationals to attract foreign investments.

Presently, Haier, Hisense, Aucma, Tsingtao Beer and other local brands have built strategic alliances with international business giants like Sanyo, Sumitomo, GE and AB.

About two-thirds of Qingdao's hi-tech industries are found in these renowned enterprises, 36 of which have formulated four international standards and 248 national standards.

(China Daily 08/14/2007 page24)