China moves to revitalize 'time-honored brands'

BEIJING -- China will increase policy support for its century-old traditional brands as many of them are struggling amid a rapidly changing domestic market.

The Ministry of Commerce (MOC) and 15 other central authorities have jointly published a general plan to bring new life to long-established brands, to preserve and improve traditional techniques, improve online and offline integration, and strengthen brand protection.

Under the plan, such brands will be encouraged to carry out ownership reforms and receive favorable policies in fund-raising.

There are currently 1,128 time-honored brands, or "laozihao" in Chinese, that have obtained official recognition from the MOC, and the companies date back about 160 years on average. More than 60 percent are engaged in pharmaceuticals, food and catering.

However, only about ten percent of "laozihao" are fit for the demands of the modern economy, such as Quanjude, a Beijing-based restaurant known for its roast duck. Many of the laozihao have limited popularity, run in small-scale workshops and barely keep afloat.

"Commonly small and medium-sized enterprises, the brands are facing a survival crisis due to their lack of competitiveness and their vulnerability to fierce competition amid rapidly-evolving technologies and business models," an industrial insider told the Economic Information Daily.

The insider called for more efforts from the government to help the brands to thrive in modern society.

Revitalizing the laozihao to preserve culture and memories for future generations of customers has remained a focus for the government for years. The MOC initiated a revival program more than ten years ago, and conducted a nationwide survey on the status of the brands last year to renew favorable measures.

China's political advisors agreed that the laozihao were the true embodiment of traditional Chinese commercial culture and deserved more protection and guidance, in a meeting held on Jan. 12.

"It is a bound duty of the government to increase support and publicity for time-honored brands," MOC official Zheng Wen said, citing similar measures in France, Japan and Italy.

Zheng said the conditions of laozihao had seen marked improvement after the MOC program.

By bold and decisive transformation, some laozihao have found ways to restore their former glory. Tongrentang, a pharmaceutical company founded in 1669, has successfully introduced modern technology to herbal medicine production. Tsingtao Brewery, headquartered in eastern China's Shandong Province, has revived through reorganization and become one of the most valuable traditional brands.

"The laozihao is both economic and cultural. It represents China's traditions in commercial morality and the spirit of the craftsman," said Zhang Lijun, vice president of the China General Chamber of Commerce. "Supporting more businesses to establish time-honored brands is significant to steady economic development."

The MOC will improve its management of the laozihao, being tough on those with poor credit, while adding competitive ones with a good reputation and cultural characteristics to the official list, according Zheng.