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Event Report: Interaction meeting on “Emerging Consumption Tide in Small and Medium Cities in China

C3S Report No: 0013/2017

The Chennai Centre for China Studies (C3S), the Indo-Japan Chamber of Commerce (IJCCI) and Athena Infonomics, Chennai, jointly organized an Interaction-meeting led by a Japanese delegation on August 18 2017, at Savera Hotel, Chennai. The theme of the event was “Emerging Consumption Tide in Small and Medium Cities in China and the Challenge for Japanese Industries”.

The welcome remarks by Commodore Vasan, Director, C3S, touched upon perspectives of the work of the visiting professor, Professor Moriki Ohara, Associate Professor, Ryukoku University, Japan. Prof. Ohara began the showcase of his personal work and the preliminary work of his students, who had conducted field research in Japan, China and India related to the event theme. Prof. Ohara explored the consumption development in China caused by the expansion of small & mid-sized cities that entail the conversion of rural peasants to city citizens. Prof. Ohara’s results are based on his original data obtained from the different hierarchy of cities in Shandong Province, China. Students of Prof Ohara, who have conducted a field survey in Shangdong and Jiangsu provinces in China introduced the reactions of Japanese companies to tap into such significant changes in the Chinese market.

The first section of the presentation focused on comparative economic growth of China, Japan, and India. While the two latter have remained either stagnant or saw small growth, the former has seen exceptional increases in GDP and billionaire residency within its borders. To understand this further, photographs of development from 20 years ago and this past year were presented. The change from dirt and gravel paths to multi-lane roadways cut down travel time of goods and people. Desert landscapes became places of heavy forestation due to changes in farming practices. He remarked, “China’s development rises up from the bottom, villages start businesses.” This emphasizes his reasoning for studying smaller localities rather than Beijing and Shanghai.

The students presented their preliminary study next. Their goal was to find out what would boost Chinese “wish to buy” Japanese products. One hypothesis stated that one’s “image of country” influences their “wish to buy” certain products. The prerequisite hypothesis was that certain media platforms influenced “image of the country.” Their media platforms were TV, newspapers, PC, mobile phones, internet home pages, blogs, and forms of social media. The brand factors were safety, usability, superiority, good feeling, and advanced imagery. Their Japanese products were cars from Yamaha Motor Company, instant noodles from Toyo Suisan co. Ltd., and baby goods from Pigeon Corporation. The population surveyed were Japanese consumers. Both hypotheses were tested for correlations using Japanese products and Chinese products, as well as a regression model for further study.

Professor Ohara’s personal study looked at consumer habits of various populations in Qingzhou, the small city and rural zone, Weifang, the medium city, and Qingdao, a large city for control, with 200 respondents of each place, leading to a population of 800. His independent variables were the consumption values: conspicuous, ideal position, and catch-up impetus. His dependent variables were “wish to buy” and consumption propensity, with the passenger car and the diamond ring as his products in question. The hypothesis was that social values of consumption influence the desire for the products. The result was negative correlations from all social values on their “wish to buy” the diamond ring, and one negative correlation between catch-up impetus and propensity of the car. His reserved conclusion of the study is that Chinese consumer culture is driven more by the individual than “trickle-down economics” of a hierarchical society.

The closing Remarks were given by Mr. M. R. Sivaraman, Vice-President, C3S, and a Vote of Thanks from Ms. Suguna Ramamoorthy, Secretary-General, IJCCI.

[Compiled by Marc Unger, Intern, C3S. Marc is studying BA in Political Science (2019) at Elizabethtown College, U.S.A and is briefly studying at Madras Christian College, Chennai as part of an exchange program.)

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