China is a growing domestic market for local businesses and USA exporters with the right strategy and skills

US style stores in China will be a big strategic business mistake. China is not USA. It has a different historical experience and its rising middle class folks are not as wealthy, more frugal, evaluate essential and luxury expenses with a different set of criteria, and expect sellers to understand customer needs and offer good service.

As with past and future failures in transplanting wholesale western economic management, political systems, religious beliefs, culture and frameworks into totally different societies, Chinese and foreign sellers must be able to capture what Chinese consumers really need and willing to spend on. Marketing pitched at customers' priorities and preferences is the principle that works. Success comes to those who could adapt quickly with their offerings. 

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China is counting on rising domestic demand from this rapidly growing segment. So, too, are Western exporters, faced with anemic growth in Europe and North America.

But China's middle class isn't Charleston's. Western companies have misjudged Chinese shoppers' priorities and clumsily tried to export U.S.-style stores.

The potential buying power of China's middle class is vast. About 247 million Chinese, 18.2% of the population, qualify as middle class, meaning their households spend between $10 and $100 a day on average, according to Brookings Institution economist Homi Kharas.

If current patterns continue, the number will soar to 607 million by 2020, and spending by China's middle class will rival that of the U.S., after adjusting for inflation and purchasing power.

The trend has the potential to remake China. With export markets weakening in Europe and the U.S., economists say, Beijing needs to lift spending by its own middle class or risk that growth will slow sharply. Steady middle-class growth also could help China's trading partners, bolstering a market for computers, cars and trendy clothing, as well as for commodities such as copper, oil and cotton.

China already is the world's largest market for some middle-class emblems, including cars, personal computers and smartphones. And multinational companies show no signs of taking their feet off the gas.

Growing sophistication among some Chinese middle-class customers has led Five Star to upgrade in some cities. The Qingdao store has higher-priced electronics than older outlets—for example, cameras and high-definition video equipment for a first voyage overseas or a road trip across China.

With brighter lighting, additional seating and customer-assistance stations, the store in this port city of 8.4 million people also has more of the trappings of a stateside Best Buy.

Following its parent's lead, Five Star opened a small research department last year to conduct consumer surveys. When it learned that some customers considered the chain stodgy, Five Star developed a new icon: cartoon characters that appear to be drawn by Hollywood animators.

http://online.wsj.com/article/SB10001424052702303444204577460693377819420.html?mod=e2tw&mod%3D=e2tw

Secret war chapter missing in the public version of Australia's defence white paper

Who wants to fight a war? 

Not surprising, there are some who may benefit from wars. 

That's what the hushed up section of the defence white paper issued during PM Kevin Rudd's leadership. This was revealed in  a new book, The Kingdom and the Quarry: China, Australia, Fear and Greed.  

The Australian military establishment, like that of the US and other countries, have an interest in lobbying for increase defence spending against a played up enemy. Force 2030 set out in the white paper was to acquire 12 big conventional submarines with missiles, revolutionary Joint Strike Fighters, air warfare destroyers and giant landing ships to prepare for possible war with Australia's main trade partner. 

Unfortunately, it is dangerous weapons, human lives and properties that warmongers are toying with. It seems much easier to create enemies than enhance friendly relations in the post-Cold War era. 

Consistent with the overall strategic policy is reliance on close friendship with US at whatever costs. However, the contagion of global economic woes and other economic priorities has put pressure on the Gillard government to cut defence spending. 

http://www.theaustralian.com.au/national-affairs/foreign-affairs/secret-war-with-china-uncovered/story-fn59nm2j-1226381002984

"  A new book, The Kingdom and the Quarry: China, Australia, Fear and Greed, reveals how Force 2030 set out in the white paper - to include 12 big conventional submarines with missiles, revolutionary Joint Strike Fighters, air warfare destroyers and giant landing ships - was being prepared for a possible war with Australia's main trading partner.

In the lead-up to the release of the paper in May 2009, The Australian reported extensively on the debate among Australia's security and intelligence agencies over whether China was likely to pose a threat as it increased investment in its armed forces.

The public version of the paper stopped short of declaring that war with China was what the authors feared. To avoid offending the Chinese, and to create a degree of deniability, discussion of possible future conflict relied on euphemisms such as a "major power adversary".

 Even the sanitised public version of the white paper was enough to upset the Chinese. They asked Mr Pezzullo to revise the description of the regional security environment and, in particular, the references to China's military modernisation.

The Beijing media said the white paper was a victory for the "hawks" in Australia's defence establishment and that was partly because Mr Rudd wanted to show himself to the electorate as tough on China, to show loyalty to the US and to give Australia an excuse to increase its forces."