China's largest shoe company matches the aspirational branding of Nike or Reebok, but marries it to a uniquely Chinese blend of Buddhist philosophy and communist ideology, writes Fintan O'Toole in Qingdao
The mountains are wreathed in mist, but as you drive towards them, you can see a Buddhist pagoda on the top of one sharp peak. On the peak beside it, there is an even more extraordinary sight: a huge, garish dragon seems to be slinking down the hill, its tail in the air and its open mouth gaping on the ground. Between the two peaks, the outline in red paint of a giant Buddha has been painted on the rock face. Men on a high scaffold are beginning the job of drilling along the red marks to turn the outline into a vast, benign stone image. Between the embryonic statue and the lurid dragon, there is a wall with dozens of alcoves, each filled with smaller Buddhist and Taoist effigies. Lines of pilgrims pass the wall and enter the dragon's mouth.
As you follow them, you file up a winding concrete staircase until, at the first landing, you get to a large open room. The walls are lined with sacred treasures: dozens of different kinds of sports shoes, all marked with the eagle logo of China's most successful shoe company, Doublestar. From a distance, the logo is not a little reminiscent of the Nike swoosh, and Doublestar could be called China's Nike, a brand that tries to turn rubber and plastic into a kind of commodified magic.
The pilgrims making their way through the dragon's mouth are buyers from franchises all over China and they are here in Doublestar's startling corporate headquarters to cast their critical eyes over the company's new collections: shoes on this floor and, on the floors above, sports shirts, hats, gloves, balls, swimming costumes - most of it indistinguishable in style and quality from the big international brands that dominate the global youth market.
The resemblance is not accidental: Doublestar makes shoes for Nike and Reebok and its own brands, which sell for a quarter of the price, are aimed largely at those who are too poor, or too sensible, to pay €120 for a pair of runners.
What makes the company remarkable, though, is that it is still owned by the Chinese state, and that it is run according to a surreal amalgam of philosophies: western entrepreneurial capitalism, traditional Chinese philosophy and communist ideology.
That eclectic mix owes everything to the personality of the man his employees call "Big Boss": the 66-year-old company president Wang Hai. It also makes him an oddly representative figure in a contemporary China that seems to hold radically different systems of thought in its head at the same time.
If you climb all the way up to the dragon's tail, you pass beyond the showrooms to a small, rather dowdy space dedicated to the life and legend of Wang Hai. On the white boards running around the walls, there is an exhibition of photographs, beginning with black-and-white images of the Big Boss as a child, in the uniform of the People's Liberation Army and getting married, and moving on to big colour pictures of Wang at his desk with a map of the world behind him, or hugging small children, or addressing gatherings of political and business leaders. One picture shows him holding up one of his shoes at a conference in New York, to demonstrate the quality of his products.
"Two famous people took their shoe off in public in New York," one of his assistants tells me. "One was Khrushchev at the UN. The other was my Big Boss." The cult of personality may have gone out of fashion in Chinese public life, but it seems to be alive and well on this misty hillside an hour's drive east of the thriving coastal city of Qingdao, in the province of Shandong.
It is not hard to understand why. The transition from a command economy, in which central government determined everything that every factory did, to a market economy in which consumers make the ultimate decisions, has not been easy for China's enormous network of state-owned enterprises (SOEs). Thousands of SOEs closed, creating a serious problem of unemployment, and many of those that survived have struggled with mountainous debts.
Wang Hai's achievements at Doublestar, where he has led a classic old-style state enterprise into the marketplace and guided its rapid growth thus makes him a hero of China's transformation.
DOUBLESTAR'S ASSETS HAVE gone from less than 10 million yuan (roughly €1 million) in 1983 to 15 billion yuan (€1.5 billion) today. Including its large tyre manufacturing and machinery sidelines, it employs almost 50,000 people in 13 factories in different parts of China and produces 100 million pairs of shoes a year. Much of that success has undoubtedly been driven by Wang's eccentric energy.
At first sight, he seems like one of those brash businessmen who front their own ads on local cable stations in the American midwest. As I'm being led to the building in the company's headquarters complex where my audience with the Big Boss will take place, he emerges from another building flanked by half a dozen busy-looking young women. Though he is a portly man with big gold-rimmed glasses and a comb-over to disguise his receding hair, he is dressed in a bright-red Doublestar sports shirt, a matching Doublestar baseball cap, black Doublestar sports trousers and white Doublestar runners.
As we enter the appointed room, another small group of young women is already present, with their pens paused over notebooks, ready to note the Big Boss's answers to my questions.
But Wang Hai isn't a car salesman from Peoria or the guy who liked the product so much he bought the company. He's a senior Communist.
He was born in 1941 in a small village on the shore of Weishan Lake in Shandong. As a young man, he joined the People's Liberation Army and in 1965 he was sent to take part in what the Chinese call the War to Resist US Aggression and almost everybody else calls the Vietnam War.
He doesn't talk about his war record, but he was obviously regarded as a good soldier and gained promotion to the officer corps. His military experience still shapes his attitude to business. The entrepreneur, he says, is to be "equated with the generals of the war years". He also compares competition in the marketplace to a "battlefront". Less sententiously, he jokes that the Chinese army was "victorious" over the Americans in the Korean war because it was shod in Doublestar runners.
He also jokes that his unit in Vietnam didn't have Doublestar shoes, so he came home and took over the factory instead. It had started in 1921 as a shoelace factory, then, under the Japanese occupation of Qingdao, began to produce shoes.
When Wang Hai arrived from the army in 1974, it was as a political commissar. He was Communist Party secretary in a factory that was still very closely tied to the army that bought most of its products and that still gloried in the title Qingdao No 9 Rubber Factory. Two years later, he took over as factory manager, but retained his party affiliations. For five years, from 1992 to 1997, he was even a member of the Central Committee of the Chinese Communist Party.
His longevity in the management of the company during the reign of five different party leaders is itself proof of a remarkable adaptability. He tells me three times that he has survived here for 33 years, as if this is in itself a wholly remarkable feat.
"I was 33 years old when I began to manage the factory, now I'm 66 and I'm still president. I am the only person in a state-owned company in China who is still president after 33 years."
THE UNDERLYING MESSAGE is clear enough: surviving at the top in a period of massive upheaval requires a kind of genius. Speaking somewhat metaphorically, he says: "It is very difficult to be a shoe-factory director. The world has six billion people and each of them has a left foot and a right foot that don't quite match each other. You have to be able to create a way of fitting each one of them."
In 1986, when China's economic modernisation was still in its hesitant infancy, Wang Hai went on a tour of Japan, Hong Kong and Singapore, to look at companies who were making shoes for the global market. He came back with the belief that China had to adapt to a notion that was beyond the reach of traditional Marxist economics: the magic of branding that turns a functional commodity into an object of desire.
"In China we had no real economic market, but when I came back from that tour I was convinced that we had to create Chinese national brands if we were to compete successfully in domestic and foreign markets. People thought there was something wrong with me. At that time, neither party and government officials nor people in society generally really understood this idea. I remember going to speak to a primary school I had established and talking about this and a teacher looking at me like I was crazy. But I said 'China has its own long history and its own great culture. I have learned that China must have its own brands as well'. "
Though Doublestar makes products for western companies and exports much of its own, Wang Hai's real leap of faith was the belief that the Chinese poor would acquire the same aspirations as western youth. One of his slogans is that the strategic shift that turned Qingdao No 9 Rubber Factory into Doublestar involved "going out from the city, up to the hill and out to the countryside".
The journey was literal: he moved the corporate HQ out of the city and up into his extraordinary temple in the hills. But it was also metaphorical: urban consumers with higher incomes might still aspire to American and European brands, but rural young people needed a version of the dream that could match their slender means, a Chinese brand that mixed glamour with affordability.
Appropriately for a good Communist like Wang, the strategy is a kind of corporate Maoism. Just as Mao built his revolution by abandoning the cities and going out to the peasantry, Wang has concentrated on the vast countryside and the smaller cities.
THE BRAND IS promoted through sponsorship of popular sports such as badminton that the big multinationals tend to ignore. Franchises in rural areas and smaller cities are granted for as little as 100,000 yuan (€10,000). For all his comparisons of market competition to war, Wang has avoided direct confrontations with the Nikes and Reeboks, and operated a kind of guerrilla strategy.
Yet the Maoist analogies go only so far. Wang may be a good Communist, who has worked for little more than €20,000 a year while building a company that would have made a private entrepreneur very rich indeed. He may talk of establishing the brand as a political imperative, and of how "making full use of money is the best kind of political work". But what is most astonishing about the elaborate headquarters he has created for himself is what is not there: Communist Party iconography.
Apart from the national flag and the photograph of Wang in his PLA uniform, the complex bears little mark of the official ideology. Instead, Wang's ideology is openly and emphatically what he refers to as the "adaptation of the essence of the traditional culture of Confucianism, Taoism and Buddhism to modern enterprise". He tells me that the "secret of the success of Doublestar in the marketplace is using Chinese tradition, Buddhism and Taoism together".
When I ask him if the company sometimes made mistakes in trying to anticipate changes in public taste, he replies: "It is impossible to avoid all mistakes but if we made too many there would be no Doublestar. But the Buddha helps us to ensure that there are not too many." He designed the corporate headquarters himself in the area where Taoism began and, aside from its pagoda, giant Buddha and dragon-shaped showrooms, the complex has a reproduction of a traditional Shandong peasant's cottage and statues of Confucius and other ancient sages and heroes.
Its centrepiece, moreover, is a mini-theme park with 24 pavilions illustrating the moral tales of good children from the 14th-century book by Guo Jujing, 24 Paragons of Filial Piety. In the first of them, a young man who is beaten and scolded by his parents cries in private but remains obedient. He is rewarded by the kindly emperor who sends his sons to help him in the fields and his daughters to be his wives and who eventually makes him his heir. The obedient child becomes an emperor and the world lives happily ever after. Wearing, as the implied modern analogy would seem to suggest, Doublestar shoes.