Chinese brands struggle in luxury market

Established Shanghai brands should be offered financial aid from the government to ensure their survival. That was the message given to the city's top political advisory body over the weekend.

The Shanghai branch of the Chinese Peasants and Workers Democratic Party, a non-Communist group, suggested authorities set up a special fund to help local brands "enter first-tier commercial zones".

"Rental prices for units in the best locations, such as on Nanjing Road or Huaihai Road, range from 70 to more than 100 yuan ($11 to $16) a square meter, which is too high for most local brands," reads the proposal.

Established brands that show potential need more support to ease their financial stress, said the proposal, which was submitted to the Shanghai committee of the Chinese People's Political Consultative Conference.

The party is a member of the committee, which began its annual session on Saturday.

An earlier report by the Shanghai Academy of Social Sciences said just 10 percent of Shanghai's traditional brands are making a healthy profit. Roughly 70 percent are struggling, with the rest on the verge of bankruptcy.

Shanghai is home to many household brand names, including Three-gun underwear, Conch shirts and Maling food. In the 1980s and early 1990s, it was fashionable to be seen wearing Shanghai-made products. But as more overseas brands have arrived in China, local names have lost their place in the market.