Letter From the Editor

Land of the New Buick.

On a visit to China a few years ago, I was driven around Shanghai in a hilarious automobile. It wasn't funny because of the flags—though they were amusing enough. (Each front fender of the car sported a little banner, the sort of thing you expect to see on the secretary of state's limo. But in this case, the flags were clear red plastic, lit from below, making me feel more like the Lord High Ambassador from Hasbro. No, what was really entertaining about the car was that it was otherwise a bolt-for-bolt counterfeit of a Volvo 850 sedan, virtually indistinguishable from the original except for a Chinese nameplate. (Entertaining for me, that is, though probably not for the folks at Volvo.)

Contrast that image with the one presented by "Made in China". Far from knocking off a Western product, contributing writer Fara Warner tells us, General Motors' Shanghai-based design shop completely overhauled the Buick LaCrosse for the Chinese market. It created a glamorous, elegant sedan for Chinese buyers it saw as "much more discerning" than their U.S. counterparts. The Shanghai team's work was so successful that it is now responsible for much of the coming redesign of the LaCrosse for the entire world.

That fact is so startling that it bears emphasizing: The Buick that, by the end of the decade, will be sold in all of GM's markets—including the United States—will be substantially designed in China. This for a car brand whose slogan, not too long ago, was "The spirit of American style."

Many people's understanding of China remains stuck in the days of the fake Volvo. Even some with significant current experience of the country argue that it's fated to be primarily a low-cost factory to the developed world for decades to come, a place whose true competitive advantages are an inexhaustible supply of cheap labor and a willingness to overlook labor abuses and environmental spoliation. Sure, China graduates vast numbers of engineers, mathematicians, and scientists, they say, but the education they get is woefully inadequate. And yes, there's a flowering of design schools and ad agencies, but the work they produce is derivative, unimaginative, uncreative.

But I've also listened to leaders of global technology companies and of giant multinational ad agencies talk about shifting more and more high-end work to China because they see the talent pool there as being increasingly at least as good as that in the West. And I've heard a leading venture capitalist describe being bowled over by pitch meetings in Shanghai, where the quality of the ideas and of the presentations rivaled any he had heard in Palo Alto.

I think China is both those things—the land of the knockoff Volvo and the source of an eye-popping new Buick. There's still a lot that can go wrong there—politically, economically, socially—that could derail its development into an innovative, high-value-added economy. But I wouldn't bet on it. And if you think that creativity and imagination give the United States a permanent advantage on the global stage, I wouldn't get too comfortable.

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