Rising East Essays

Introduction

In the run-up to the Beijing Olympics in 2008, Chinese officials were the preferred target of many Western protestors. This year, by contrast, President Hu Jintao could waft into London for the G20 summit without anyone being ‘kettled’ on his account. Perhaps fear of China’s cheap labour, authoritarian regime, and enormous appetite for raw materials, has given way to grudging acceptance that, whatever can be done about global recession, will largely depend on goods and capital from China. In short, Chinese officialdom has dropped down the list of villains now that China is widely expected to act as the heroic engine of economic recovery.

But the West has hardly addressed the question of China’s political role – a failure of will which can hardly affirm the willingness of the Chinese to perform more economic miracles. Why should they carry on producing the goods downstairs, if upstairs still belongs exclusively to Western countries? Unless the West finds within itself a way of accommodating an expanded social role for China, even current levels of East-West interaction will not rise to their full potential; and economic interdependence – the fact that neither East nor West can do without the other – is more likely to be experienced as pain rather than gain.

The motorcycle industry is a case in point. China’s motorcycle production has been expanding massively; but taken as a whole it operates at a relatively low level of technological development. Meanwhile, the Western tradition of advanced manufacture and high-end design is put at risk by lack of investment, its workforce assigned an equally hazardous existence for the same reason.

Instinctively recognising their own limitations, already these two sides of the global motorcycle industry have been fumbling towards increased cooperation; and there have been encouraging signs that each can overcome its own internal weakness by learning to play to the strengths of the other. But it is hard to see how increased levels of economic congress can be sustained when there is such a discrepancy between the heavy-duty economic role China is called upon to play and the limited amount of political recognition which has been China’s meagre reward for shouldering it.

As long as international relations await re-development, there is more chance of a stand-off developing between West and East: on one side of the world, low levels of industrial investment threatening to demobilise a technically advanced, highly skilled, media literate workforce; and this combination also threatening to mobilise protectionist tendencies. Meanwhile in the East, reduced demand from the West may be offset by state funded capital programmes designed to stimulate domestic consumption. But this too is latent with protectionist tendencies; and it will also have the effect of reducing productivity and marketability by partially isolating Chinese manufacture from some of the most advanced technologies and design sensibilities developed in the West.

If such divisions are allowed to materialise further, although the two parties may remain interdependent, each would be more likely to regard the other’s extra-mural activities as an unwelcome incursion. This would be a disappointing step backwards: West and East have much to offer each other in production, and their growing reciprocity would be of huge benefit to the world economy as a whole. But capitalising on the potential for this level of economic cooperation requires matching levels of political initiative.

Motorbike producers on both sides of the world have been getting it together up to a point; but there comes a point where their ad hoc arrangements require ratification. The balance of economic forces must be expressed in the reformation of international relations. Without political reconfiguration, economic advance may well go into reverse. When instead of beginning a new chapter in East-West relations the G20 summit opted to re-tell the old story of Continental Europe versus the Anglo-Saxon model, the best that can be said is that the potential for East-West co-production is currently on hold.

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The Clock Is Not For Turning

After first suggesting that the US dollar might be replaced as the international currency, and then quietly dropping the suggestion, at the G20 China agreed to provide 40 billion of those dollars to back up the International Monetary Fund. Having financed our ability to buy its goods and develop a huge financial industry for years, China has no interest in bankrupting the West. To a considerable degree, it has every interest in seeing the economies that buy its exports back on their feet. But this does not mean that China will want to reset the world economy to how it was before, going back to lending us cash to buy its goods.

While such arrangements may have been temporarily advantageous to all concerned, they also gave rise to the assumption that what is good for Chinese manufacturing is bad for everyone else’s. But there is no iron law which says that the advance of Chinese production spells the end of production elsewhere. China’s expansion into new markets may actually provide the opportunity for more British factories and design workshops, not less.

A hundred years ago there were precedents for integrated motorbike manufacture, when, for example, the East London Rubber Company first used Belgian engines to improve the performance of locally assembled bikes; and again in the 1960s when the same company sought to customise Italian scooters for a new market led by Swinging London’s Mods. Now there is a much greater opportunity to correlate capital flows between East and West with cross-country currents in design and technology, possibly resulting in a new generation of the most technically and aesthetically advanced machines.

The motorbike industry is perhaps better placed to achieve this level of cooperative co-production than its ailing big brother, car manufacture. Motorbike sales are suffering as a result of recession: in Britain in February 2009 new registrations of scooters and bikes were 25 per cent down compared to February 2008 (source: Motorcycle Industry Association 1); but viewed alongside the fall-out from auto production, casualties sustained by bike manufacturers have been relatively light. This gives motorcycle producers the opportunity to work out the regeneration of their industry, rather than leaving it to the ‘creative destruction’ of crisis-ridden market forces.

Western attitudes to China have shifted under pressure of recession, but do not yet reflect how much of an opportunity the increasing involvement of Chinese companies in Western industry really is. Over the last few years, away from the high tables of politics and finance, the Western-oriented expansion of the Chinese motorcycle industry has illustrated the possibilities that commercial co-operation can bring.

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How The Bike Market Was Internationalised

The motorcycle industry is an internationalised market featuring one superpower, Japan, and a bloc of canny competitors based in Europe and the USA. In the early days of motorcycle exports from Japan, Japanese machines were dismissed as ‘rice burners’; but by the end of the 1960s they were making serious inroads into the British market. The Japanese achieved pole position in the 1970s by working flat out on price, functionality and technical specifications.

Having been overtaken on these counts, European and American producers reconfigured themselves around the aesthetics of their machines and the rebel ethos embedded in them. Largely outside the Japanese-led race for low-price and high functionality, they have played with and capitalised on the Outsider status of bikes as cultural artefacts. Under their guidance, alienation has been successfully transmuted into metal. In this market, bikes are not only a mode of transport, but also a rhetorical device for the display of ‘rugged individualism’ in which heavy engineering collides with product design and branding.

Firms such as Harley-Davison, Ducati, BMW and Triumph have learned to differentiate their products from those of the Japanese. Each of these manufacturers has traded on the associations of its name with racing, craftsmanship and rebelliousness. Harley-Davison and several other marques are well-known even beyond biking circles because they have worked hard to build their brands as the leftfield alternative to straightforward Japanese products. European and American manufacturers hardly ever build a bike with the same capacity, engine layout and target customer as Honda, Suzuki, Yamaha and Kawasaki. They have survived or been revived by building on the racing pedigree and the iconic status of their names.

This means more than just tinkering with image and identity. Perhaps not the most advanced technologically, European and American manufacturers are no strangers to innovation in product design, even if this tends to occur in the interests of aesthetic affect; rather than its effects on the work-rate of strictly functional machines.

Harley-Davison is the world’s most famous motorbike. The particular noise a Harley engine makes has even been trade marked. The brand’s association with Easy Rider and outlaw groups such as Hell’s Angels has extended its appeal, but even Harley cannot sit back and rely on selling the same cruisers (see Appendix on bike markets and product classification) to its home market. Having lived through the upheavals of the 1970s and 1980s, largely by taking advantage of Washington’s protectionist measures, Harley still had to make its engines cleaner and smoother, and confront a series of design problems.

To do this, Harley bought out Buell, a small-scale producer of Harley-engined sports bikes, retaining Eric Buell, its innovative engineer-founder. Harley-Buell machines have sold well here in Britain. Harley then went on to acquire Italian company MV Augusta in 2008. MV Augusta has a strong racing heritage and reputation for building beautiful, high-end statements of engineering art. The world’s most famous motorcycle marque sees its future in a combination of extended branding and product development derived from the incorporation of substantial, new design elements.

BMW makes Britain’s most popular big bike, the adventure-oriented 1200GS. Two versions of the robust touring machine with off-road styling are available, one of which is very similar to the bikes used by Ewan McGregor and Charley Boorman in their Long Way Round and Long Way Down TV programmes. The GS has pushed sports bikes out of the top-selling slot for big machines in the British market (See Appendix). But BMW’s bikes, unlike their cars, had become associated with a staid, old-man’s image. The company has had to develop several new sports bikes, wild supermotos and off-roaders (see Appendix) to replace their outdated image with something that satisfies the rebellious streak among today’s Western bike buyers.

Triumph’s machines were still very popular in the late 1970s when the company, like much of British manufacturing, started to have serious problems. After management reshuffles and, finally, a period as a workers’ co-operative, its Meriden plant closed down. Property tycoon John Bloor revived the marque at Hinckley in the late 1980s and, after earlier attempts to compete with Japanese four-cylinder sports bikes, Triumph concentrated on developing triples and twins, building around configurations for which the old firm was well known. It now designs and builds sportsbikes, middleweights and cruisers for the American market, although production has moved mainly to Thailand to cut costs.

Ducati has recently enjoyed racing success, iconic design status and substantial sales worldwide. Ducati rose to renewed prominence by selling large numbers of its middleweight Monster throughout the 1990s. The machine’s spar frame and V-twin engine layout was even copied by Japanese manufacturer Suzuki.

Meanwhile Austrian producer KTM has broken out of the niche off-road market and into the sports and naked markets for road bikes (See Appendix). Its success, again, was built on racing, unusual design and the merits of a middleweight bike (the Duke). Middleweight sales are strategically significant because some owners will change up to the big bikes that are generally more profitable for manufacturers and lend kudos to their brands.

Relationships between manufacturers have often involved re-badging small bikes and sharing production and development of similar, larger models. Thus the biggest motorcycle manufacturer in the world, Honda, had its FMX650 designed and built in Italy; and it has extensive production facilities in Brazil. Honda set the precedent for establishing production outposts the world over, and other manufacturers soon followed suit.

These various developments have combined to produce a market in which motorcycles are globally produced and internationally consumed. Besides price and functionality, bikes are often sold on the basis of strong image and compelling design, and these in turn are frequently associated with national identities.

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Meanwhile… Back in China and South-East Asia

Almost unknown outside the East, Chinese manufacturers have been churning out millions (and millions more) of technologically obsolescent runabouts for the home and south-east Asian markets. China largely lacks the high-tech production facilities to build machines that are competitive with the Japanese. The Chinese have zero racing pedigree. But China must still compete directly with Japanese products in international markets for small bikes, scooters and middleweights (see Appendix on motorbike markets and product classification). Low-price (based on cheap labour and cheaper technology) has been the basis of Chinese competitiveness at the bottom end of the market so far.

The Chinese home market remains something of a mystery to outsiders. Small-engined 50cc bikes require no licence to ride but various reports of local regulations suggest that bigger bikes are often forbidden in urban centres. Accordingly, Chinese bikes tend to be small and even the very best achieve only engineering parity with other makes. While demand for big bikes will surely grow among China’s middle classes (still relatively small in proportion to the rest of the population, but amassing in large numbers nonetheless), until now there has been little indigenous production for this market, and no foreign firms claim to sell large quantities of such machines.

Without brand histories and with no tradition in the home market for bigger and more sophisticated bikes, it seems implausible that China could rise from its current position as the supplier of cheap, little learner and commuter bikes to purveyor of dream machines on a par with the best of Honda, Harley-Davison, BMW, Ducati or even Triumph. Accordingly, the biggest Chinese bike currently sold in Britain is the Zing Storm, a 400cc cruiser derivative of a discontinued Yamaha model.

Hemmed in by the technical and aesthetic achievements of others, the Chinese have shown remarkable open-mindedness. In response to the technical and aesthetic dominance of Japan and the West respectively, Chinese producers have not attempted to go against the grain of existing development, as the Japanese once did, nor have they closed ranks and focussed their attention on domestic and regional markets exclusively; instead they are actively seeking to integrate new technologies with high-end design, and going about it in a way which signals cooperation alongside profitability, rather than single-minded, cut-throat competition.

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The Future Could Be Cooperative

Honda already has a strategic alliance with Jialing, the largest Chinese bike manufacturer, which is directly owned by the Chinese government. BMW’s strategically important middleweight bikes are powered by a recently developed 800cc twin-cylinder engine, the basic form of which is manufactured in China by Loncin. Other European companies have also understood the advantages of making alliances with Chinese companies. The Italian scooter giant Piaggio is in commercial partnership with Zongshen, a large-scale Chinese producer of small bikes and scooters. Another Chinese firm, FYM, now owns the German marque Sachs, known for small-batch production of unusual, design-led bikes, and for large quantities of suspension parts produced for many other European firms.

China’s most fruitful European acquisition so far is Qianjiang’s purchase of the Italian marque Benelli, a company renowned for engineering adventurousness (and for going bust almost as frequently as Italian governments). With large amounts of capital at its disposal, Qianjiang has been able to bring forward the Benelli 2ue project. The 2ue is a middleweight twin that aims to develop new technology to greatly improve engine performance, economy and emissions. This machine is much anticipated in Europe, since it promises a clean and fuel-efficient four-stroke engine with exciting two-stroke power characteristics. When it is launched in 2010, the Benelli will go head-to-head in the market with BMW’s hugely successful F650 (incorporating an 800cc twin engine, the one built in China) and F800 series. The 2ue looks, at least on paper and in prototype form, a formidable competitor (Newbiggin 2009). The new bike also marks a shift, away from Benelli’s former niche status as a sports bike maker, towards a new position as a mainstream, volume manufacturer in a crowded, competitive and highly strategic sector of the market.

Qianjiang has approached expansion into the European middleweight market by financing Italian engineers to build a better middleweight. Other Chinese firms may contribute to major projects such as this. Others still are offering generic products open to particular, local modification, thereby enabling the revival of old marques, particularly British and Italian ones.

AJS is already emblazoned on some imported Chinese small bikes, a name so long gone I haven’t have seen one on the road since the 1970s! AJS is really the rebadging of the Spanish Regal Raptor importer CSR, which in turn is owned by another Chinese firm!

Many small bikes are now sold in Britain under assumed names. But this is usually more than just a marketing trick. Bikes with the same basic engineering may take on different identities and design qualities depending on importers’ modifications. In some cases ‘modification’ is an understatement. The degree of local customisation suggests that it is equally plausible to regard the original engine as having been reconfigured by the bespoke frame in which it comes to be embedded. Sometimes various levels of re-branding, modification and re-engineering come together in one and the same company and its various commercial ventures.

For example, Clews Competition Machines (CCM) is a small British manufacturer with a long tradition of building racing, road and off-road bikes with donor engines, recently from Suzuki and the Austrian firm, Rotax. CCM now rebuilds, rebadges and modifies small Chinese bikes and at the same time uses Chinese engines in British frames. While Suzuki engines power CCM’s custom-built higher-end road and race bikes, the firm relies on Chinese metal to power its sales to learners and new riders (see Appendix). CCM’s new LC2 model for the new rider uses a Chinese 250cc engine in CCM’s own innovative frame. Spanish company Reiju also rebadges smaller Chinese bikes.

The co-operative approach taken by Chinese firms suggests that China is trying to understand the Western motorcycle market, including the ‘rebel sell’, i.e. the branding of alienation and consumers’ identification with designs that represent it.

In a suitably conducive atmosphere, the technical gap between the Chinese and the Japanese, European and American manufacturers may be shrinking fast. CCM’s Managing Director, Gary Harthern, told Bike magazine: ‘China is the key for us. We’re never going to compete in mass-manufacture but we can design great bikes and all we need is a partner to build them to high standards’ (Rose 2009). Harthern went on to say that he had ‘serious issues’ with assembly and transit packing, but that the bikes themselves were good. Similarly, the Loncin factory that builds engines for BMW cannot afford quality control issues if it is to maintain its partnership with a marque famed for finish and reliability.

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Conclusion

Investments, trade alliances and acquisitions bode well for East-West joint production. This is an especially significant development since it counters the otherwise-increasing division between production in the East and the financialisation of major Western economies – a division expressed first in ‘the credit crunch’ and latterly in worldwide economic recession.

The motorcycle industry may show that fears of being overrun by Chinese competition are just plain wrong. Chinese firms are not just knocking out cheerfully cheap runabouts. They have sought out the most advantageous ways into Western markets, yes; but they have often done so on the basis of Western companies’ ability to be innovative and daring. There may be a lesson here for the daring and the innovators in any industry.

Critics will say that there are two ruses at work here: the Chinese operating a Trojan Horse in a long game to capture the Western citadel; and Western firms taking profits from dressing up Chinese machines to make them look locally produced. But this interpretation is more cynical than current reality, which widens the scope for integrated innovation instead of being narrowly preoccupied with domestic production and short-term profitability.

However, this is indeed the kind of cynicism which may well take root if there is no political equivalent of economic cooperation. If they are constantly working against the grain of an outdated political fabric, even the most daring innovators will tend to lose faith in cooperation and adapt to something more like protectionism. Without political strategy to match the potential in production, tightly-drawn self interest is bound to win out against the social aspect of capital; and we will all be poorer as a result.

Sean Bell is a motorbike rider, a journalist, and a postgraduate student of the UEL programme in Journalism and Society.

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References

• Newbiggin, C (2009) ‘Powervalve is back’, Motorcycle News, 18/02/09, pp4–5
• Rose, S (2009) ‘Good guys: CCM’, Bike, May 2009, p150

Notes

1. 1 The Motorcycle Industry Association is also the source for my brief introduction to motorbike classification in the Appendix.

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Appendix: Motorcycle Market Sectors and Classification

In Britain, learner riders must use a bike between 51 and 125cc to pass their tests on. Younger riders must then spend a probationary period on a bike that makes no more than 33bhp at the crank. 250cc bikes or larger bikes that have been power restricted are used during this period. A middleweight between about 400 and 850cc is often the next step up for both younger riders finishing their probationary period, and for older riders who qualify for direct access to a bigger bike.

All the above come in the styles described below. The Motorcycle Industry Association (www.mcia.co.uk) separates bike-styles into the following categories, although many models cross over between them:

• Custom, also known as Cruisers, are American-style factory-built customised machines.
• Adventure Sport – off-road style combined with pillion and touring capability and luggage facilities, such as BMW’s GS, but, strangely, this category includes Supermotos that are off-road racer-style, stripped down with wide, road sports wheels and tyres, and no touring capacity at all!
• Supersport - also known as sports bikes, are road racing-inspired machines with high performance, low weight, an excruciating riding position and nominal pillion passenger seat.
• Sport/Tour – middleweights or big bikes that do a bit of everything and have at least a half-fairing for wind and weather protection.
• Naked – bikes without fairings, similar to sports bikes and sport/tourers. This category includes Streetfighters: radically designed sports bikes without fairings.
• Touring – huge fairings and stereos with two comfy seats and lots of luggage space.
• Trail/Enduro – off-road bikes legal for the road; they are tall, light, slim and have knobbly tyres.
• Scooters – mostly 50cc and 125cc runabouts but some have 500cc, 650cc and even 800cc engines. All have automatic or semi-automatic transmission.
• Unspecified – anything odd such as a sidecar or a three-wheeled, leaning scooter.

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