China gives its homegrown brands a boost

The screens are made by Chinese electronics giant TCL. At 110 inches, they are the world's largest 3-D LCD screens, just a touch wider than the 108-inch Panasonic models they replaced.

"We have broken through the Japanese and South Korean monopoly of big flat-screen TVs!" TCL chairman Li Dongsheng boasted at a launch ceremony on Friday. Officials from the Ministry of Commerce, Ministry of Science and Technology, Ministry of Industry and Information Technology (MIIT), and the government of Shenzhen, TCL's hometown, clapped and nodded.

The government is encouraging its companies to move up the value chain and develop margin-producing brands, partly as a matter of national pride but also to shift the world's second-biggest economy away from gritty, low-profit manufacturing. But creating recognisable brands has not been easy.

With the possible exception of computer-maker Lenovo and appliance maker Haier, China has few brands that foreign shoppers would recognise. Even at home, producers often find themselves supplanted by high-end foreign brands.

"That is a big hurdle, especially in autos. (The domestic brands) are almost non-existent in large cities like Shanghai or Beijing because no one wants to be seen going lower than a Japanese or a Korean brand," said James Roy, a senior analyst with China Market Research Group, a Shanghai-based consultancy.

Beijing has been ready to lend a hand. This month, MIIT posted new rules requiring officials, who overwhelmingly prefer German luxury brands like Audi, to buy only local cars.

Other efforts, including government support for domestic companies engaged in "indigenous innovation", have led to allegations that China is unfairly trying to tilt the playing field towards its own industry by guaranteeing government purchases and by setting standards that favour Chinese companies over established industry leaders.

"If Chinese companies want to go global, they can't just compete in a protected domestic market," said Zhao Yuhai, high- and new-technology development and commercialisation director general at the Ministry of Science and Technology. "That way you will never win the global market. So this concern is unnecessary,"