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Comment by gonehome | Hacker News Reader

I'd heard that the Chinese government unfairly favors local companies. Is this no longer the case?

Seems like it'd be difficult for uber to compete in a rigged game.

They still do. Indeed Carl Icahn recently dumped his Apple stock for this exact reason. Your market status in China is temporary, until the government can replace you. More interestingly there are few Western companies that have actually made a net positive cash flow out of China, even those that today have large market shares ( such as automotive).

The relationship has consistently been unilateral free trade in the long term, with investors giving money for market share and getting little in return.

Your argument doesn't hold. Apple is pretty replaceable in China, yet they are making yuge money from this one market.

The argument is that regardless of Apple's current profits it could all be gone tomorrow without any recourse.

“Your market status in China is temporary, until the government can replace you”

China has 2-3 (due to different standard) of the top smartphone manufacturers in the world, I don't think govt cannot replace Apple. Yet apple is still there.

China just cut off some of Apple's services without any warning:

http://www.nytimes.com/2016/04/22/technology/apple-no-longer...

> Last week, Apple’s iBooks Store and iTunes Movies were shut down in China, just six months after they were started there. Initially, Apple apparently had the government’s approval to introduce the services. But then a regulator, the State Administration of Press, Publication, Radio, Film and Television, asserted its authority and demanded the closings, according to two people who spoke on the condition of anonymity.

The biggest threat may be a security/encryption related court case similar to the one the US just backed down on. Apple would be put in a very tough place.

Apple had a 2016 Q1 YoY decrease of 25% for revenue in China. They are still making good money but the future is very uncertain for those cash flows.

Because 6S is a boring phone, and people didn't want it as bad as 6.

The reason Apple's sales in China are slowing is not because of local favoritism. It has more to do with new iPhones being not much different than older models, much more expensive than similar hardware with Android, and competition (like Huawei, Xiaomi, Oppo, Samsung) catching up.

Yes and the future for Apple in China is looking pretty grim since the government has recently just shut down the iTunes movies and books stores. It's only a matter of time before music and apps get similar treatment.

A government willing to block gmail of all things is not going to have qualms about killing an app store they can't control.

It is still the case, as it is in nearly all countries (albeit to a greater degree than most).

I don't think it's worse in China compared to how it is in the US or anywhere else.

It is still the case, as it is in US(Huawei looks at you).

It is a myth that Chinese government bans foreign companies for the explicit goal of protecting local players. Chinese businessmen are better at figuring out what works in China, than some arrogant foreigners - that & few other factors is why they win in China[1].

The goal of banning certain companies is not protectionism of local companies, but protection of Chinese government and the bureaucrats(by censoring certain media and disabling channels that could be used for forming groups, which could upset social order). Remember, Chinese government doesn't respond to people or commercial entities. They don't need the money for political campaigns from entrepreneurs, which is why they don't need to promise them anything like ban of foreign companies.

[1]https://www.linkedin.com/pulse/20130605230952-18448-why-ebay...

Interesting - if you're still getting banned, but the cause is censorship and control rather than protecting local companies that's arguably even worse.

I guess it might only affect information companies though so maybe it's less widespread.

Yes - Startbucks, Walmart, McDonalds and many other International companies are NOT banned in China. One thing these companies that are not banned have in common is that they do NOT threaten the social order of the country. Could Starbucks help start a revolution, like Facebook could? No, that is why Startbucks is not banned and Facebook is. You know, there are many local competitors of Starbucks, so why isn't government banning Starbucks to protect Chinese companies? Because they don't care about opinions of people or local_entrepreneurs. Their goal is not protectionism. Uber will not be banned, since it is harmless to government.

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