We all know company brands – Coca-Cola, Nike, McDonald’s. But we rarely talk about country brands. And the U.S. and China are waging a huge brand war.
When you size up the U.S.-China rivalry with a gimlet eye, it all comes down to which country will be more determined, ambitious, and agile in this decisive decade of upheaval. While the pattern of American history is one of progress and growth, the story is punctuated by frequent periods of conflict and financial disruption.
And from its founding to this day, America’s economic and political upheaval was not in isolation but rather enmeshed in world events. You might think that the pressures of globalization, emerging markets, religious strife and terrorism, pandemics, trade disputes, disruptive technology, conflicting ideologies and extreme political partisanship are unique to our day and age.
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But you would be dead wrong.
The world has been connected and in conflict for much longer than you might think. Jay Winik’s riveting book, The Great Upheaval: America and the Birth of the Modern World, 1788-1800, covers in vivid detail how in a mere decade, France would provide crucial support to American rebels before plunging into revolutionary chaos, Russia sealed its authoritarianism, and Muslims and Christians would clash in a Holy War. Catherine Drinker Bowen’s Miracle at Philadelphia chronicles the bitter, intense political combat during America’s 1787 Constitutional Convention, which moved into an even higher gear during the dramatic, high stakes, state-by-state ratification battle.
Many of the issues intensely debated during that turbulent time are still with us. Federal versus state rights and responsibilities, rural versus urban power, distinctions of wealth, class, rule by the people versus the establishment, who runs foreign policy, the separation of powers, the power of the purse, and perhaps most sensitive, the reach of the chief executive.
The political combat was so brutal that Benjamin Rush in his autobiography implored his family to avoid running for office because, “In battle men kill without hating each other, in political contests men hate without killing, but in that hatred they commit murder every hour of their lives.”
These issues remain a never-ending battle of intensity and emotion. What has changed dramatically is that the world is ever more linked, and the speed and scale of change are ever more unpredictable. In America, there has been a surge in acrimony, political partisanship, class warfare, identity politics, and cancel culture. Economic stagnation amidst breakneck technological change remains a troubling trend. All these can be reversed and repaired since, as famed 19th-century French philosopher Alexis de Tocqueville noted, “The greatness of America lies not in being more enlightened than any other nation, but rather in her ability to repair her faults.”
China will also need to address its weaknesses as it strives to protect the power and the brand of the Chinese Communist Party, achieve primacy in East Asia, and then expand its hegemony throughout the vast continents of Eurasia. The flip side of this is that it puts the party and grand strategy above the welfare and rights of its people.
Perhaps it’s best to begin the rivalry’s endgame by exploring just what makes up a country’s “brand.”
Brand Wars: U.S. vs. China
A country’s brand begins with something it can do little about – its location and borders. Where does a country sit in the world relative to its neighbors, sea routes, and natural resources? Then comes its people and what they share such as culture, values, language, commerce and history. A brand also reflects a country’s distinctive political and economic system with a government organized around a set of laws and institutions. These, in turn, regulate how a society promotes its citizens’ common safety, health, education, financial security, and national security.
You may not think of countries as having brands but David Ogilvy, a British advertising tycoon known as the “Father of Advertising”, created branding campaigns for both countries and products. Ogilvy defines a brand as the “intangible sum of attributes.” A simpler definition of a brand is what quickly comes to mind about a product or country. What do most citizens think about their own country? What does the rest of the world think about a country? This is the brand.
“Democracy is not Coca-Cola,” with the whole world having to drink from the American product, commented Chinese Foreign Minister Wang Yi, explaining in 2021 that all countries must follow a path of development that suits their own national conditions and the needs of their own people. In 1950, Chinese minister of culture Shen Dehong, writing in People’s Daily, warned that Coke was as dangerous as the U.S. military in spreading American civilization.
A country’s brand is largely framed by the perception of its people, power, reliability and influence. This perception can be just as important as a country’s real economic and military power. In short, a country’s brand largely reflects a country’s character.
Brand Finance, a leading brand consulting firm, each year calculates and publishes a ranking of country brand values. The scoring is based on 10 factors: openness and tourism, size of market, trade rules, quality of life, corruption, cultural image, talent retention, use of technology, research and development, taxation and regulation. For 2020, the United States ranked first with a brand value of $23.7 trillion followed by China at $18.8 trillion and then Japan at $4.3 trillion. I would have thought that the gap between the United States and China would have been much larger.
There are a few rules about brands that most experts agree upon.
While a brand never captures the whole truth, a brand relentlessly reflects reality. It usually takes a long time to establish a positive brand but it can be squandered in a heartbeat. And a positive and powerful brand is a very valuable asset in the global marketplace of ideas, influence, capital, trade, business, diplomacy, and national security. A positive and strong brand also serves to unite a country in pride and purpose.
A brand must always be aligned with a country’s values and principles. A country at odds with its foundational principles is a country in confused decline. For a country, a brand as trustworthy and dependable with a consistent and fair legal system, an educated and talented workforce, political stability and dynamic financial markets can mean the difference between prosperity and peace, or misery and conflict.
When investing, take into account the brand of the company and country.