Word: mainlanders
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...this formula has been a success. China's growing prosperity has won it an essentially docile populace and escalating prominence as a world power. Until recently, this strategy has also proved effective in underwriting Beijing's preferred interpretation of "one country, two systems," the nebulous concept that governs the mainland's relations with Hong Kong and Macau, and that it hopes some day to apply to Taiwan. As the Chinese leadership sees it, self-governance in the offshore enclaves is just fine so long as it doesn't interfere with governance by Beijing. But the past few months have seen...
...world, pulls double shifts, travel to Fenghua, a Spartan town 10 miles outside the eastern coastal city of Ningbo. There, Ningbo Bird, a manufacturer of mobile phones, has sprung from obscurity to challenge much larger foreign competitors, such as Nokia and Motorola, in a high-stakes battle for mainland market share. According to some estimates, Bird sells more cell phones in China than any other company, with revenues of approximately $1.4 billion...
...leagues. Chinese products like Bird's cell phones are often top quality, and it's probably only a matter of time before manufacturers acquire the marketing skills to convince the world of their products' reliability. But it's an urgent challenge: as consumer markets get ever more crowded, many mainland companies have to export...
...three colleagues originally founded Bird in 1992 to make pagers, but the company's real growth has come from catering to mainlanders' taste for cell phones with flashy color displays and clamshell cases. It's now a crowded market. There are 37 foreign and domestic manufacturers, which together can produce twice the number of phones currently sold in China annually. As inventories quadrupled in the first half of 2003, prices fell 20%, according to research firm IDC. Yet more companies are crowding in. Huawei Technologies, China's largest telecom-equipment maker, announced late last year that it is launching...
...Bird's strategy is simple: "I want to sell at the lowest price." But it is not quite so simple. As Bird moves outside China, it has to develop local know-how in each new foreign market. And Bird managers acknowledge that they're just starting to overcome the mainland's reputation for shoddy goods and build an international brand. Still, Xu says, "what Chinese manufacturers can do, foreign companies can't do"--and that's make cell phones that are both chic and unbeatably cheap. The phone wars have only just begun. --By Michael Schuman. With reporting...