Cracking the China Market, Then and Now U.S. businessman Carl Crow arrived in Shanghai in 1911. His blockbuster 1937 book, 400 Million Customers, recently has spawned a crop of imitators, and many of his insights into doing business in China still hold true today.
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Cracking the China Market, Then and Now

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Cracking the China Market, Then and Now

Cracking the China Market, Then and Now

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Well, long before U.S. companies started marketing burgers and crispy chicken abroad, an American advertising agent named Carl Crow set foot in China. He arrived in Shanghai in 1911, with one suitcase, and he stayed three decades.

Crow died 60 years ago, but he left behind several books detailing his thoughts on life in the Far East. And as NPR's Louisa Lim reports from Shanghai, some of his instincts about the Chinese customer still hold true today.


LOUISA LIM: Throughout Shanghai's turbulent '20s and going '30s, Carl Crow was a regular at the city's clubs. His day job was selling Ponds face cream, Buick's and American cigarettes to the Chinese public. His other exploits included translating the rules of poker into Mandarin, negotiating with warlords and writing a book called "400 Million Customers." To find out whether that's still relevant, I've distilled some of his advice into words, which I tested on a panel of modern-day Carl Crows.

TOM DOCTOROFF: My name is Tom Doctoroff. I am the Northeast Asia area director of JWT and the Greater China CEO. A year ago, I published a book called, "Billions Selling to the New Chinese Consumer."

PAUL FRENCH: Well, my name is Paul French. I'm the chief China representative of the company called Access Asia, and the author of a biography of Carl Crow.

JAMES MCGREGOR: My name is James McGregor. I'm the author of "One Billion Customers." I guess I've styled myself a bit after Carl Crow, and then I'm a journalist-turned-businessman.

LIM: So let's hear what Carl Crow have to say about doing business in China in the 1930s.

Unidentified Man: Rule number one: Rule number one: No one will more stubbornly and successfully resist the tempts to sell him something he does not want than the Chinese consumer, no matter what the price will be.

DOCTOROFF: True. Products have to be put into a Chinese frame of mind. You earn - Chinese want to become modern. They want to become international. They don't want to become Western. Nothing in the world is going to make Chinese want to eat, en mass, crunchy, cold cereal in the morning.

FRENCH: Yeah, that's true. We find this now, as well, with people trying to bring in to the market various products. The Chinese, despite lots of advertising, have not been consumers, largely of lipsticks; they have not been consumers, largely of perfumes. Just because they sell well in the West, they don't necessarily sell in China, and not much you can do to convince the Chinese person that they should buy them.

Unidentified Man: Rule number two: Rule number two: Business deals in China are always full of surprises, because until the transaction is finally concluded, no one can ever be quite sure that all the details of the transaction have been settled.

DOCTOROFF: Yeah, it's funny, that's way it is today too. If you do a contract in China, that's like the opening round of negotiations. And then, everything is fluid from then on out. If regulations say you can't do something, then there's ways to do it, to go around that. It's a - what is it saying? Nothing is permitted and everything is possible in China.

FRENCH: People don't understand the bargaining process continues even after a contract is signed. And I often find it wonderful when a trade delegation returns to the U.S. or Europe and they announce, you know, X-billion dollars worth of deals that have been done. And you'll find that those billions, if you're lucky, become millions. And if you're less than lucky, turning to hundreds of thousands.

LIM: Rule number three: A cartel rule of conduct for the Chinese appears to be: Do not do anything today if you can possibly put off doing it until tomorrow or the day after. This is not the philosophy of a lazy man. It's solely because of their timorous avoidance of responsibility.


DOCTOROFF: Yeah. That's true. I think it's still that way with the government. It's not that way with the private sector. But with the government, it's always easy to say no. Why say yes, because it's always a risk? But there is definitely not a mañana attitude in China - it's get things done. I've had people who worked for me who slept under their desk, and I had to have send them home.

FRENCH: We still have that problem today. The important lesson from that is, of course, is that, you know, your contacts need to be at the highest level possible in a company, or at least to someone who has the ear of the highest person possible. Otherwise, things would just get bonked down, and so, you can eventually take out the master dinner and get him to make a decision in five seconds flat. And that's how it works.

Unidentified Man: Rule number four: Rule number four: In spite of our years of disillusionment, all of us secretly cherish the thought that a reasonable number of the 400 million Chinese may buy our goods next year.

DOCTOROFF: Basically, a lot of what he's saying is true, but what he's missing is this incredible explosion or purchasing power that has happened on a mass level amongst the new middle class. The emergence of a new Chinese middle class is the consumer's story of the 21st century. This did not exist in the 1930s.

MCGREGOR: He's talking about the dream of the huge market and the reality of the tiny market in those days. And even today, there is this dream of this gargantuan market, and even though it's getting to be a larger and larger market, the dream is always bigger. I think he's just pointing out the dream is out of kilter with the reality with - more and more of the reality is catching up.

LIM: So when it comes to doing business here, why has almost 60 years of communism apparently changed so little? As James McGregor put it: Chinese are commercials to their bone marrows, and 60 years of communism means little compared to 2,000 years of cultural determinism. It's a sign of just how much important people place on wealth that instead of saying happy New Year, people say congratulations on getting rich.

We thanked James McGregor, Paul French, Tom Doctoroff, and of course, Carl Crow for his insights from 70 years ago. I'm Louisa Lim reporting for NPR News in Shanghai.


SIEGEL: I'm Robert Siegel.


And I'm Melissa Block. You're listening to ALL THINGS CONSIDERED from NPR News.

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