U.S. Brands Have Special Luster in China

(CBS)  Tuesday in Beijing, President Obama credited China with helping to pull the United States out of its recession. And while Mr. Obama continues to push China to open its markets to more American products, U.S. companies are already making lots of money there, CBS News correspondent Celia Hatton reports.

Sam's Club is winning customers over in the southern Chinese city of Guangzhou. A recent store opening - complete with drummers and other festivities - marked the 173rd in China for parent company Wal-Mart in just 13 years.

The enthusiasm for spending money over there is pulling the U.S. company - and many others - through the global recession.

It's "American Products Day," and the store's 10,000 customers are celebrating, snapping up U.S. brands from vitamins to laundry detergent.

Clearly, capitalism is a hit in Communist China. Older generations still save half their paychecks, but that trend's reversing as a nation of young shopaholics is born. Salaries for young, urban Chinese have almost tripled in less than a decade from $858 to $2,300 a month, but people in their 20s and 30s save next to nothing.

Instead, they're on a spending spree. The best indicator? The number of credit cards is exploding - from 13 million cards in 2005 to 180 million now.


American businesses are riding high on the buying boom, thanks to people like Zhao Mengyao. She drives a Buick, chats on an iPhone, eats at McDonald's and wears Nike.

"Brands are really important to me," she said through a translator, "and then I look at the price tag."

It seems like every major American company is digging its way into China. Caterpillar's had a bumpy ride because of the U.S. recession, but in China its revenues have grown from $700,000 a year in 2005 to $2.6 billion this year.

The NBA's 30,000 Chinese retail spots are selling 60 percent more merchandise this year than last.

Nike entered China early back in 1980 and now it's the country's No. 1 sports brand. Revenue went up 22 percent in China this year. In the United States it was just 2 percent. The Chinese bought $1.7 billion worth of Nike products in 2009, up from $1.4 billion a year earlier.

KFC and Pizza Hut are also feeding Chinese appetites faster than ever before. They're opening one or two restaurants a day in China.

"We think this is the best growth opportunity of the 21st Century and maybe even beyond," said Sam Su, president of Yum! Brands - the chains' parent company - in China.

But perhaps no one's as thankful for China's big spenders as General Motors. The company faced bankruptcy early this year in the U.S., but it's never been hotter in China, where first-time drivers are still excited to get behind the wheel of a brand new American car.

Still, experts caution it's just as hard for U.S. companies to succeed in China as it is back home.

"If you are ready to operate in an environment that is chaotic, that is brutal but that has real opportunity, that's when you should come over here," said analyst David Wolf. "But don't come over here with candy corn dreams about some beautiful pot of gold that awaits you here."

Getting that pot of gold requires work. But American companies that haven't expanded to China may regret missing out on the great Chinese shopping spree.

[wyodutch]

Bless those red chinese!!!!
.
They're out there at Sam's Club in Wang-Bang City... buying those AMERICAN PRODUCTS!!!!
.
AMERICAN Products like the (made in red china) VISE-GRIP PLIERS and the (made in red china) RADIO FLYER wagons for the little red chinese tykes.
.
Ain't "flee tlade" wunnerful?

[robinspp]

China is building infrastructure and increasing its industrial production. They are making money by selling goods. For republicans war is everything. They are against science and research. USA is buying China?s products, China is slowly buying USA. Our senators instead of talking about how to fix healthcare and economy they are talking about the trial of some prisoners. What a shame?

[mydogroo]

It's really hard to watch this nonsensical glorification of China and the American companies that want to go there. The only reason the Chinese have so much money to spend is because all of our jobs have been sent there. Their middle class is doing SO well while OUR middle class is dying. EXCUSE ME if I couldn't care less about China or the American businesses that sold the American people down the river for profit. And your station glorifies it. It's sickening.

[airman33813]

It does not surprise me that they can work cheaper in China. Just look at the Sun-maid raisin segment, Did any one notice no gloves on any of the employees? Here in America food handlers are required to do a lot more hence the expense.

ps: Yuk no more raisins for me from Sun-Maid.

[brendett]

We the United States shouldn't be messing around with a communist country in the first place! But the U.S. government owe China a lot of money don't they shame on our government for borrowing money from China period. We have a government with No commonsense !
I don't want China's cheep junkie products in our stories in the United States is the bottom line. So I don't care what the Chinese people are thinking or doing.
I don't trust a communist country !

[brendett]

We the United States shouldn't be messing around with a communist country in the first place! But the U.S. government owe China a lot of money don't they shame on our government for borrowing money from China period. We have a government with No commonsense !
I don't want China's cheep junkie products in our stories in the United States is the bottom line. So I don't care what the Chinese people are thinking or doing.
I don't trust a communist country !

[bubbadubba]

HA HA HA HA HA HA HA
"US Companies making money in China"
Sam's club? AKA Walmart?
Yea, making money selling them their own junk. Just think, since it is made in China they don't have to put "made in China" on the products and the Chinese think the American brands are actually made in the US.
Poor Chinese don't know we have no factories to make anything since they were all moved to China and Mexico.
LOL

[skeezix06]

Sam's Club doesn't make anything. They only sell stuff.

[charlieo357]

what is so dumb is comments like cbs news correspondent Celia Hatton made about Zhao Mengyao She drives a Buick. She didn't tell you that the Buick was made in Chinia. With slave, and forced labor.This is what our goverment calls fair trade.Martin L King will roll over in his grave if he could hear that a black man and president sat down with a bunch of slave owners and wallmart

[jhgfkt]

Buicks that are made in China, by Chinese employees, with parts that are made in China, in factories that are constructed by Chinese and sold by Chinese dealerships are Chinese vehicles, supporting the Chinese economy, not the U.S. economy.

Ditto for McDonalds stores, built by Chinese, franchised by Chinese businessmen, serving food grown and processed in China and served by Chinese employees. The Chinese consumers benefit the Chinese economy, not the U.S. economy.

I think you missed the point entirely.