S01: The Business of China
Business History of Modern China
September 15, 2025
Key Questions
- Economics of Labubu: What can its success tell us about the Chinese economy and the world?
- Contradictions of trade: Why didn’t it bring democracy to China? Why didn’t it bring peace?
- What do we study when we study business history? And why China?
The Labubu Shock
The China Shock: Has Its Economy “Peaked”?
Discuss: Labubu
- A monster with sharp teeth: What’s the value proposition of Labubu’s intellectual property (IP)?
- Why is Labubu selling so well, when the Chinese economy is stalling?
- Labubu is neither the first nor the only blind box toy manufacturer. Why is it catching on?
- Does it matter that the parent company of Labubu is Chinese? Why (or why not)?
China: A Toy Story
From Toys to Technologies of the Future
“New three things”: electric vehicles (EV), lithium-ion batteries, and solar photovoltaics (PV).
China’s Supply Chain Advantage
- Striking resilience: Even after decades of fast-paced expansion, and despite quickly rising costs in the country and growing trade and other barriers globally, China’s weight in global production and exports continues to grow.
- Controlling tomorrow: According to the ASPI Critical Technology Tracker, China already leads the world in 37 out of 44 tracked critical technologies, including artificial intelligence (AI), communication technologies, biotechnology, and more.
China’s Low Human Rights Advantage?
- Overtime, lack of job site security, exposure to toxic chemicals, etc.
- Price pressure from multinational companies as a huge hurdle to improving Chinese workers’ rights.
- Weak enforcement of labor law; crackdown on labor union and political protest.
- Now Chinese manufacturers are shifting to lower cost countries: Vietnam, India, Bangladesh, Pakistan, etc.
Labubu’s Designer: Kasing Lung
Hong Kong: Former Toy Capital
- Post-WWII Hong Kong saw rapid industrial development due to refugee labor, plastic manufacturing advancements, and Western investment.
- By 1972, Hong Kong was the world’s largest toy exporter, driven by plastic trade and innovations like the watermelon ball.
- In the 1980s, China’s opening led to manufacturers relocating, but Hong Kong shifted to higher-value activities like design and marketing.
- Despite fewer Hong Kong-made toys today, the industry remains strong, ranking fourth globally in 2019.
Pearl River Delta
A Different Figurine
- What is this object? When was it made?
- Who was the maker? Who was the buyer? How was it exchanged?
- What can the object tell us about the society that made / consumed it?
From China to Europe: Re-exporting Racism
- A Chinese figurine commissioned by a rich European, offering a racist caricature of an African.
- It was made using the famille noire technique and commissioned by a rich European.
- Red lips, bulging eyes, and minimal clothing are common in Western depictions of Africans.
- Stretched earlobes, hairstyle, and lotus connect to the Chinese image of Buddha.
- The figurine represents the exchange of racial stereotypes and visual imagery of the “other” in circulation at that time.
Two Figurines, One History
Discuss: Myths of Chinese History
- What are these myths about China (and Chinese business)?
- What are the main turning points in modern Chinese history?
- What does business have to do with them?
Turning Points of Modern China
- 1792
- 1905
- 1949
- 1978
- 2008
Turning Points in Modern China: 1792
Qianlong’s Reply
Hitherto, all European nations, including your own country’s barbarian merchants, have carried on their trade with Our Celestial Empire at Canton. Such has been the procedure for many years, although Our Celestial Empire possesses all things in prolific abundance and lacks no product within its borders. There was therefore no need to import the manufactures of outside barbarians in exchange for our own produce…
Turning Points in Modern China: 1911
