Many American manufacturing companies are trying to break into the Chinese market. With about a billion people, the idea of selling goods in China is an attractive one, but the GLRC’s Christina Shockley has the story of one company that’s having a hard time reaching Chinese citizens. That’s because local environment and safety regulations often stand in the way:
Many American manufacturing companies are trying to break into the Chinese market.
With about a billion people, the idea of selling goods in China is an attractive one, but
the GLRC’s Christina Shockley has the story of one company that’s having a hard time reaching
Chinese citizens. That’s because local environment and safety regulations often stand in the way:
Motorcycle maker Harley-Davidson opened a dealership in Beijing in April. It’s the
company’s first shop in China in at least 60 years.
Robert Kennedy is Executive Director of the William Davidson Institute at the University
of Michigan. The institute studies business and policy issues in emerging markets.
Kennedy says there’s a huge demand in countries like China for products associated with
the American way of life. He says Harley-Davidson motorcycles are a prime example:
“I mean, they’re associated with a particular lifestyle here, it’s a very American thing.
And they have very low penetration in China and India, and these other countries now,
but because there’s slowed demand growth in the US, if they want to grow, that’s a great
place for them to go.”
Kennedy says it’s very common for companies to try to ease restrictions in other
countries to make it easier for them to export goods and there are several restrictions on
motorcycles in China. The rules vary from community to community, but most large
cities ban, or severely limit, motorcycle use in the city center.
Experts say the rules are in place partly because of safety and environmental issues.
Barrett McCormick specializes in Chinese politics at Marquette University. He says
environmental problems can be intensified because Chinese roads are clogged, and most
motorcycles there are dirty:
“Anyone who’s been to China 10 years ago or something, a common site is some horrible
little motorcycle putting down the road, with a big cloud of smoke behind it, and I think that’s
the kind of thing that the Chinese government has regulated to eliminate.”
McCormick says air quality is one of China’s most pressing problems. A recent report
from the World Health Organization says many of the most polluted cities in the world
are in China. It says one of the main sources of air pollution there is motor vehicles
Zhixin Wu is with a company that’s working with government agencies to develop
Chinese transportation policies. He says emissions from dirty, small motorcycles in
china account for roughly 50 or 60 percent of emissions in urban areas:
“In China almost all the motorcycles use the two stroke internal combustion engine.”
Wu says that type of small engine is very dirty. But, Harley-Davidson says those bikes
are a far cry from the motorcycles it produces:
“The motorcycles in use in China, I guess I wouldn’t even characterize them as
motorcycles. I would call them two-wheelers.”
Tim Hoelter is the company’s Vice President for International Affairs. He says Harley
bikes easily meet environmental regulations in every market in which they’re sold. And
Hoelter says the company is working with officials in the United States and China to get
this point across:
“Not too long ago the Chinese ambassador to the United States came to Milwaukee and
met with local business people. I sat two seats away from him at dinner, and was able to
talk to him about these riding bans.”
Hoelter says the company is also meeting with American trade officials, and authorities
in the Chinese government, to get the rules changed. He says his company has already
helped ease motorcycle restrictions in other countries, such as Vietnam and India.
Robert Kennedy, from the William Davidson Institute, says Harley-Davidson will
probably be able to get the rules changed in a few years, assuming the regulations have
the inadvertent affect of keeping out Harley motorcycles. He says China has a huge trade
surplus with the United States, and that’s a sensitive political issue.
Kennedy says it’s not unusual for countries to have rules that keep foreign goods out,
even if that’s not their intent:
“The US has some of these regulations that keep out other countries products, and other
countries have regulations that keep out our products. It’s not like under the Romans or
the British where a country would send in the army and force them to buy our goods, it’s
just governments working together to sort out the details to allow trade to happen.
Kennedy says even though most Chinese wouldn’t be able to afford Harley motorcycles,
there are many who could, and as people there become more wealthy, the possibility
exists for a huge market.