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Comment by ChuckMcM | Hacker News Reader

Aside from the general anti-China slant that is fairly common in the journal, I have yet to see a 'manage the market' to achieve results desired by the state to ever succeed, anywhere. Markets just don't work that way in my experience, they evolve, they change, and if you box them in they die.

So the fundamental question is, "What did these people expect?" (and were thus disillusioned when they didn't get their expectation). Did they expect that they would be able to build large foreigner controlled businesses? Did they expect that their success would not be impeded by a desire on the part of political entities to craft a narrative? Did they expect to secure more wealth for themselves before they were shut down?

I am always surprised by people who think they can do what they do in their home country in any other country and get the same results. But it is particularly true of people in the US it seems. If you don't really internalize how the laws, politics, and policies of a country shape what is, and what is not possible, you are setting yourself up to be disappointed.

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Some of them had probably expected that the laissez-faire attitude of the Chinese authorities that was noticeable up to the mid-2000s would continue indefinitely, but that turned out to be a bad bet. Once the Chinese authorities started to become more serious about things like environmental regulations or higher salaries (both these things mentioned in the article like something bad ?!) then many “napkin” business-plans turned to nothing. I really cannot feel any empathy for this type of investors.

"both these things mentioned in the article like something bad ?!"

It is the Wall Street journal.

Didn't realize requiring a separate 8 square meter space to prepare salad was for saving the environment.

>s like environmental regulations or higher salaries

They didn't become more serious about these things. They passed rules to kill off businesses arbitrarily to maintain power under the guise of "environment". The salad preparation rules have nothing to do with the environment.

Aside from the general anti-China slant that is fairly common in the journal

To be fair, the perceived anti-China slant wasn't always that way. It used to be one of the most pro-China publications in the early days of the Chinese economic ramp-up. But as things have changed in China, so has the tone of the Journal.

It's a reaction to what's happening there. An over-reaction, probably. But a reaction, nonetheless.

It could be a reaction to what's happening in China. But it could also be a reaction to what's happening at the WSJ. Rupert Murdoch, who among many media properties created and owns Fox News, bought the WSJ in 2007. That led to changes both obvious and subtle: http://www.journalism.org/2011/07/20/wall-street-journal-und...

For what it's worth, I attended an event where Murdoch spoke a couple years ago [0][1]. Despite the interviewer's best efforts, he actually seemed a bit extreme to the other direction in refusing to say a negative thing about China. To paraphrase what I remember, "I've visited plenty of Chinese startups, there is real innovation," and "I don't think China is a military threat."

0: https://www.manhattan-institute.org/html/young-leaders-circl...

1: I have zero affiliation with the above organization -- stumbling into the event was purely right-place-right-time circumstance.

Well, he did marry Wendy Deng. Some have said it was to help break into the Chinese market. If it wasn't for Tony Blair, they'd probably still be married.

https://en.wikipedia.org/wiki/Wendi_Deng_Murdoch

Wow I thought you must be joking, but looks like Rupert broke up with Wendy due to reasonable suspicions about Tony, the stuff of reality TV!

> I am always surprised by people who think they can do what they do in their home country in any other country and get the same results. But it is particularly true of people in the US it seems. If you don't really internalize how the laws, politics, and policies of a country shape what is, and what is not, possible you are setting yourself up to be disappointed.

I don't think this is particularly true of the US in comparison with, say, China. There are people who will blame Chinese nationals or immigrants in the US for behaving incorrectly or irrationally. And there are people here who will blame Americans for not accommodating or understanding the Chinese community. (I'm going to make an unfair generalization: and then there are always Europeans who pipe in to comment without really understanding American race relations, American culture, or Chinese culture. America has its own politics of race, identity, and nationality that have significant differences from the way it works in Europe. Just as I'm liable to go to Europe and, say, make a fool out of myself trying to have a conversation about Catalonia, a European is liable to make a fool out of themselves coming to America and talking about Black Lives Matter.)

Coming back to the original article, I do think these people are mostly just bad entrepreneurs trying to cash in on a fad, or being led by exoticism and memories of 19th century trade rather than an understanding of the market and a sound business plan. It's not some kind of testament to US arrogance, even though that makes a good narrative.

>America has its own politics of race, identity, and nationality that have significant differences from the way it works in Europe.

The average European has a much better grasp of those than the average American has of any European situation (assuming they can even pinpoint France on the map, that is).

We read lots of American news, websites and books, follow US music, movies, and so on. With a small exception of UK music, the US can hardly do 1/100th of the European following US culture we do.

As an American, I agree. I think one of the factors is that it's easy for the US to be a world unto itself. With 325m people versus the EU's 505m (soon to be 440m), and with roughly equivalent GDPs, it's really easy for Americans to stay in their bubble. E.g., hear only English, experience only one culture, deal with only one system of law. We can easily move a thousand miles and still be in a place where, well, people measure in miles.

There's some hope, though. As recently as 1994, only 10% of Americans had passports. But now that number is above 40%. [1] Part of that's due to to no longer having passport-free travel to our nearest neighbors since the 9/11-inspired security tightening. But I think part of it's real.

[1] https://www.bbc.com/news/world-us-canada-42586638

Just because one reads any number of American news outlets doesn’t mean they’re familiar with American race relations in the way the average American on the street would experience them. Most American ‘news’ is entertainment and is written and marketed that way. I read BBC, guardian, observer, independent almost every day to name just a few but I still don’t pretend to ‘know’ a thing about how life works on a day-to-day basis in London. Doing so otherwise seems entirely misguided and arrogant.

Also, there's no typical American. Its a country of 3.8 million square miles, as big as then entire continent of Australia. It has a 5000 mile border with Canada, 2000 mile with Mexico, 12000 miles of coastline. Half a million legal immigrants and half that many estimated illegal folk. Enclaves of culture for just about every region of the planet.

Entirely agreed. Shows the inherent bias in my thinking of culutres and customs as nationally-based when, in a place as diverse as America, there’s far more variation in perspective and manner. (Thank goodness for it)

Again, why can't Americans have a perspective on life in Europe or China? (And vice versa as well frankly.)

Is our perspective any more misguided or arrogant than the perspective of a European, or a Chinese person? Because if it is, then we can all stop complaining about Europe and China right? Because our perspectives are all just misguided arrogance.

Now I'm not saying that our perspective on foreign nations is necessarily "right" and "factual". I'm only saying that our perspective is certainly no more "wrong" than any other perspective. Perspectives are not objective realities, but they do become subjective realities for the people who hold them. (Read, "all of us".)

So here's the thing, whether or not those subjective realities are "misguided" or "arrogant" is not really a function of where the holder of the subjective reality grew up, it's a function of a lot of other factors unrelated to national origin. Everyone will have a perspective any given issue. Everyone may even have different perspectives on different issues, but whether or not one perspective is more valuable than another is usually not a function of things like citizenship. The relative value of different perspectives usually turns more on factors such as power and influence; sometimes on other factors like intelligence, and thoughtfulness. Outside of maybe power, rarely do these factors respect national borders.

In my book anyone is allowed to have any number of perspectives on any number of things and I consider those perspectives valid as human perspectives. Where I consider these perspectives ‘misguided’ or ‘arrogant’ is when the purveyor of these perspectives state their perspectives as fact like the op did in this sub thread. I think having a constructive conversation around a set of varying perspectives is to entertain your own perspective as a possibility (as you might others) without necessarily believing it. This way your perspective is just as valid as everyone else’s and is only held as an opinion after. Why try to advertise ones perspective as anything but a limited cache of experience prone to invalidation based on new information? Please, share the perspectives, have them, nurture them and then tear them down when more accurate information arrives; but don’t disingenuously push them as fact by stating them as unappealable facts.

I guess I just don't get too hung up about what people believe. For instance, if Southerners want to believe the Civil War was about state's rights and preventing Northerners from coming south to turn the family farms into factories, they should be free to have that perspective. (From my perspective it's asinine, but I mean whatever. I'm sure they believe my perspective on slavery to be asinine.) Point is, they aren't obligated to discuss their perspective, or entertain other perspectives if they don't wish to do so. That's what the freedom of thought is about, none of us are obliged to listen to any other of us as a matter of course.

If you want to discuss your perspectives on life with other people that's fine. (Actually I think it's admirable even.) There just shouldn't be the expectation that anyone else has to sit down and discuss their perspectives on life with you.

Other than that though, I think we're in agreement. Different people can have different perspectives that become subjective realities, but are usually not even close to being objective realities. People have the freedom to discuss, or ignore, other perspectives at their sole discretion. Thereby fulfilling the promise, and conveying to us the benefits, of freedom of thought.

Unfortunately this comment is an example of what I am talking about, the kind of behavior that frustrates me.

Pop culture, news, and books give an incredibly limited and skewed perspective of what a country is actually like. Worse yet, if you remove these things from their context and then give them to someone who has a different culture, you end up missing large chunks. American pop culture is also stripped of realism and specificity to make it more broadly accessible to Americans and even abroad.

To draw a comparison which might be more familiar to the HN crowd, consider what happens when you learn programming by reading a bunch of blog posts, articles, and books about programming, but you never actually write a single line of code. You’ll have a very distorted idea of what programming or software engineering is like.

I’ve had similar conversations with both groups of people. A novice programmer might have an arrogant attitude and explain to me why the code base is terrible, or might have the attitude of a learner and ask me questions about the design decisions. A European might have an arrogant attitude and explain to me what the problems are with American race relations, or they could be more humble and ask me questions about what living in America is like.

I don't know man?

I think the Euros have perspectives that are just as valid as anyone else'. I mean, Americans get their ideas from the pop media too, and then we experience life through that lens. Americans are not somehow less susceptible to pop media influence than, say, Europeans, simply by virtue of being Americans. We are just as manipulated as they are. Probably more manipulated, since we consume more of our pop media.

The media changes the perspective of people. The perspective becomes the reality. Doesn't matter who those people are, or where they happened to grow up. The media you consume, shapes your perspective, which becomes reality for you. No one is immune to it. This is deeply ingrained psychological stuff. With several decades worth of study to back it up. (Along with countless billions in profits derived from exploiting that very human proclivity.)

To say that the European perspective is invalid because they didn't grow up here, would be like saying that Americans don't have valid perspectives on life in Europe or China, because we didn't grow up in any of those nations. Well, maybe we didn't, but we can have a perspective that is as valid as anyone else'. Doesn't make our perspective more "right" than anyone else', but I'd hardly say that our perspective on those nations is outright "wrong" just because we didn't grow up in them.

> Americans are not somehow less susceptible to pop media influence than, say, Europeans, simply by virtue of being Americans.

Of course they are! Propaganda is much less effective when you constantly see conflicting evidence with your own lying eyes.

There is a reason why trust in the mainstream media is at an all time low in the US.

???

Are you implying that Europeans can't see through propaganda? That, somehow, only Americans have this gift?

> Are you implying that Europeans can't see through propaganda? That, somehow, only Americans have this gift?

I’m saying reality is a hell of an antidote to propaganda.

I’m certain French people are far better at recognizing biased and misleading reporting concerning France than I am.

Hindsight is always 20/20, but as an anecdote I can attest that in 200 (when I started my 9 year stint), optimism about China was much greater than the way it eventually turned out. Back then, China was opening up, most major foreign websites were still unblocked, a lot of foreigners thought they could actually make their futures there, and they were being egged on by the Chinese government and institutions in agreement.

Of course, the reality turned out to be way different, but back then everyone had already sunk their costs. BTW, not everyone in the article is from the US, Blue Frog for one thing is most definitely Australian (who else puts beets on their burgers?).

> [I]n 200 (when I started my 9 year stint), optimism about China was much greater than the way it eventually turned out.

It's because back then Han dynasty was just getting started after the fall of Qin dynasty. You gotta give them some time.

Typo. I meant 2007. I was just a baby during the Han dynasty.

"Back then, China was opening up". I can tell you that in 1990 it was the same, I remember reading a very similar article in a newspaper and a friend who was sent out to head up the office of an industrial power supply company came back in 95 with the very same dissolution.

1990? Maybe 1988, but as soon as May 35th hit, China backed away rapidly from the liberation of the 1980s. The reasons the students marched on the square in the first place was because they thought they could.

Many Americans believe that the meaning of China opening up their economy is that they can go there and dominate all industries they want. This may even be the case in some third-world countries, but China is way past the point that they need to bow to western countries. If you go to any other developed nation like France, Switzerland or Canada, you won't be able to do business as it pleases you, you need to follow the local political rules.

True but the local political rules in these places are pretty predictable and don’t change drastically on edict. So, yes, follow the rules, but the rules applied to you are the rules applied to all.

Of course, France is an old country with very stablished rules, even more than the USA. It is normal that a new economy, like China, will have new rules more often than the US. This doesn't mean that they have an obligation to create laws to facilitate American business.

Why does everyone just assume all the businesses talked about in the article are American? Obviously some of them were not. It seemed that they were focusing more on foreigners.

China does not have rule of law, full stop. They have a constitution that guarantees freedom of press, religion, and speech, and it is completely meaningless because they do not have rule of law. What this means is that Baidu can make most of its money on medical scams and porn while any foreign company would immediately be prosecuted for any small transgression. Whatever rules China makes up, its just for convenience, if they want to get you, they'll find something.

No one is asking for favoritism, only level playing field. Of course people would also be okay with exceptions, so long they remain exceptions and not the rule.

Even an unlevel playing field would be fine — if it were stable and not subject to the arbitrary whims of the CCP. Predictability and consistency are paramount.

You only get to the level playing field when you join the Old Boys’ Network.

On the other hand, if you have a light complexion, you can easily get a well paying English tutoring job. It often pays higher than what an engineering grad would make!

Why do you deserve level playing field? The rules always favor locals. No foreigner can just come to the US to work or try to make a fortune from scratch. You need to bring something special: capital or knowledge/skills. Why do you expect China to be different? You need to give them what they want if you want to prosper there.

> You need to bring something special: capital or knowledge/skills.

Unfortunately that is not really true. But it’s certainly a good idea!

The other thing to note when doing a compare and contrast is that China is a high savings country with no shortage of capital. Maybe in the very beginning of the reform and opening era they did but it hasn't been the case for over two decades. US on the other hand is the largest importer of capital in the world. So it can be expected that China with its thirsts for know-how and market access but not capital will behave very differently from the US, all else being equal. This is generally true for other East Asian countries as well.

> No foreigner can just come to the US to work or try to make a fortune from scratch.

plenty of politicians love to tell everyone ad nauseam about someone who came to the US and "found the American Dream". America is the freest, most open society in the world. it's what makes us different from other countries. blah blah blah. you hear this kind of idealism all the time. some people would say it's a foundational, fundamental feature of America. (Others would not.)

does anyone say that in China?

> If you go to any other developed nation like France, Switzerland or Canada, you won't be able to do business as it pleases you, you need to follow the local political rules.

No, you will need to follow actual laws, as both France and Switzerland are very "rule of law" countries. This actually makes doing business there much easier, because the rules are clearly defined and the same for everyone.

In China, the rule book is ambiguous and anyways, enforcement is very selective (they will get you on something if they want to). A textbook example of a "rule by law" country.

Just drink tea or baijiu with more people. And then, since Xi started the anti-corruption campaign, hope that they don't drink with the wrong people.

Never really worked well for foreigners, especially Americans who are subject to the FCPA.

And yet, every election cycle there will be candidates complaining that the regulations are too burdensome and killing entrepreneurship.

> because the rules are clearly defined and the same for everyone.

The rules are the same for citizens and non-citizens? There is a reason why the Immigration lawyer AMAs on this site are so popular.

> And yet, every election cycle there will be candidates complaining that the regulations are too burdensome and killing entrepreneurship.

So? The rules are still there and applied fairly consistently. Whether or not the rules should be changed is what democracy is all about.

> The rules are the same for citizens and non-citizens? There is a reason why the Immigration lawyer AMAs on this site are so popular.

You mean the rules are different because non citizens need visas and citizens do not? I guess you got me there, but I’m not sure what your point is.

The rules are clearly defined for entrepreneurs and investors: (usually) any foreigner can incorporate a company and that company being a „legal citizen“ is to be treated like all other legal citizens of a country, regardless of its owner’s nationality.

give me the man and i will find the crime

Markets just don't work that way in my experience, they evolve, they change, and if you box them in they die.

But with enough money and power, you can convince yourself it's working on a temporary basis, until the market distortions make things suck enough, something has to break or change.

If you don't really internalize how the laws, politics, and policies of a country shape what is, and what is not possible, you are setting yourself up to be disappointed.

Don't forget culture.

The US is largely a country of immigrants, who in effect are risk takers. Even in times of war and famine, typically only a small percentage (approx 10%) of the population leave. In the past, our country may have taken the lion's share of immigrants compared to other nations.

The US still takes the lion’s share of immigrants.

You're right

https://read.oecd-ilibrary.org/social-issues-migration-healt...

interesting table. Japan and Korea appear on it. but i don't see China.

I read an interesting argument over at Foreign Policy highlighting the failures of China's One Belt One Road foreign policy, and attributed those failures (and their continuation) to the increasing authoritarianism of President Xi, and the breakdown of the Party's meritocractic efficiency seen over the last 20 years or so.

https://foreignpolicy.com/2018/12/06/bri-china-belt-road-ini...

That probably deserves its own submission as a link. I can quibble with some of the details but I agree with the general thesis that China's execution of the OBOR initiatives have failed to meet expectation and that the initiative has become more important than the results politically. I keep looking for signs for this effort to collapse and take the RMB with it, but China has more direct control over the levers than most economies would trying to pull off what they are doing.

I submitted it about an hour ago. https://foreignpolicy.com/2018/12/06/bri-china-belt-road-ini...

> 'manage the market' to achieve results desired by the state to ever succeed,

Well, apart from the entire modern history of Chinese export-led growth.

I'd argue that this wasn't "managing the market", it was dropping suicidal economic policies that kept the entire population in serfdom. The state actually gave up a huge amount of control in the process (relative to the status quo circa 1970). It's still much more "managed" than other developed nations, but vastly less so than under Mao.

It is strange that you see a lot of folks who feel that in China they'll be less restricted in some ways, and that might be true, until it isn't and in that case with an authoritarian government, it's just over. No legal options, no heads up.

I went to China after I repeatedly hit the Bamboo ceiling in the US. Luckily my parents forced me to learn Chinese as a kid, so I was able to network with the people there.

Along with my credentials, I am now at a fulfilling C-level position.

I guess we’ll have to see if my luck lasts.

I think an individual is quite less risky than a business that may be far less portable.

I was thinking more as a business.

> Aside from the general anti-China slant that is fairly common in the journal, I have yet to see a 'manage the market' to achieve results desired by the state to ever succeed, anywhere. Markets just don't work that way in my experience, they evolve, they change, and if you box them in they die.

I strongly disagree.

Since the Great Depression, farming is incredibly heavily subsidized in the United States. World-wide, but particularly in the US, agriculture is probably the most government-managed/subsidized/regulated industry you can think of.

And yet, over the past 85 years, despite the many economic ups and downs, changes in global demand for, and global prices of staples, US agriculture remains a resilient pillar of the economy. You can go to any grocery store, country-wide, and buy more cheap food then you can ever eat, despite wars, shipping problems, droughts, natural disasters, crop failures, and other calamities.

Now, all of this comes at a cost. It costs a lot of taxpayer dollars to ensure that cheap food is available for everyone. The alternative, of course, is an unresilient, market system, with fluctuating outputs, shortages, and price spikes.

These sorts of things tend to lead to bread riots, revolutions, and bourgies being strung up on lamp posts.

As a bourgie, I'd rather not risk seeing the price of bread triple.

Agreed, the key is how much you box in versus grants and early pushes to get to a tipping point IMO. is China doing it right? Hell if I no, but there is a ton of good data from what the USA/EU have done right, and what they have screwed up to do better.

> Did they expect that they would be able to build large foreigner controlled businesses? Did they expect that their success would not be impeded by a desire on the part of political entities to craft a narrative? Did they expect to secure more wealth for themselves before they were shut down?

No, I believe most gold-rush Westerners were actually looking to join up with established (or government-blessed) Chinese businesses and help them introduce their businesses back to the West and help there - such as marketing Huawei or Xiaomi to Americans for example, or working with government lobbyists on pro-China PR campaigns.

Funny, I always say the same about foreigners coming to the U.S.

What they can do or what they couldn't do?

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