Shut Out at Home, Americans Seek Opportunity in China
nytimes.com
nytimes.com
Indeed, it's increasingly not accurate to call China a communist state any more. Communism is about collectivism, planned economic policies, and egalitarianism. China began abandoning these policies nearly immediately after the death of Chairman Mao in 1976. Granted, there are still warehouses full of grain and pork, and only the government can officially "own" land, but the reality at street level is that it's a pretty thriving capitalist state with 100 year leases on land, increasing dismantling of state-owned enterprises (SOEs), and a vibrant mercantilism I've not seen anywhere else in the world.
What China is, though, is an autocratic state with a single party central government that maintains tight control over the press. Look closer, however, and it exercises the tight control over a few key topics with which most Westerners are familiar (and porn - porn is bad). If you are a reporter, then these controls can be frustrating, if not downright aggravating, but otherwise, life here is pretty relaxed and open.
The reality on the street? The locals engage in vibrant discussions and arguments about Taiwan, Tibet, or whatever online on a daily basis. Sometimes they use encoded keywords to keep the noise level down, but they talk about it all the time. What the government really cares about is people organising - that is verboten. I've tried to avoid talking about all these "sensitive" subjects in my years here in China (largely because politics stresses me out), and I am constantly approached by locals who want talk about it and give me their opinions.
The Great Firewall isn't nearly as big of a deal as you'd think either. No Twitter? Facebook? Livejournal? Guess what? The locals weren't using it anyway (not in appreciable numbers). They were (are) using local Chinese equivalents, which are far better at catering to their needs and desires. I don't know a single foreigner who hasn't found a way around the firewall to use Twitter on a daily basis either.
So, to summarize: China is an autocratic state, it has some definite problems with various values and things that many Westerners take for granted as important, but to just sit on the sidelines saying "Boo, China" isn't going to change a thing. China will gradually change by engaging with them and by working to move forward with them. Indeed, by not coming here to visit and or spend a bit of time, you're denying yourself experiencing one of the more vibrant and fascinating places on earth.
Correct. They're usually dragged into an alleyway first.
Yesterday the Chinese authorities said Rio's "spying" had cost the country $102 billion over 6 years. Only problem with that story is that Rio's total worldwide iron ore revenues for the last 6 years was $40.75 billion. More here: http://www.businessspectator.com.au/bs.nsf/Article/The-real-...
So by all means do business in China - just don't be too successful. Because your competitive negotiation with a state run business might just turn into spying on "state secrets". The Chinese government has some growing up to do.
I don't have many good things to say about the Chinese govt, but Rio Tinto is an absolutely awful company and it would not surprise me if they had tried their dirty tricks one too many times and been caught trying to bribe or blackmail officials.
Let's wait until the facts come out in this case.
These mega-corps always work within the letter of the law, but not the spirit. They can wreak horrendous damage, taking actions in obvious bad faith, and yet get off scot-free because they've legally dotted every "i". Well, it would not surprise me if some part of Officialdom there is really pissed off at Rio for something they've done, can't actually hang anything specific on them, so is just holding them without charge for a while to punish them. That is also within the letter of the law, but not the spirit.
China could be sending a message here - "you play dirty, we'll play dirty". Anyway, just a theory and probably not a good one, but I hope it demonstrates that Rio's unclean hands are relevant to any discussion of the matter.
Simply stating "be too successful in China and this is what happens!" is unlikely to be the whole story.
http://www.businessday.com.au/business/rio-spy-case-stern-hu...
As expected, the charges are commercial bribery and obtaining "commercial secrets of China's steel and iron industry through improper means" in violation of "the country's Criminal Law".
I am not trying to whitewash China here, but I doubt this case is all that unreasonable, and I for one am hardly less confident about business dealings in China because of it.
No it is just a dark gulag where people are arrested and then beaten for expressing or acting on vaguely pro-democracy thoughts.
People still disappear in China into "re education camps" and are never seen again and are beaten, tortured and killed. Other than that, sure, it is "just" "an autocratic state, it has some definite problems"
The govt is a repressive dictatorship with a horrific human rights record. The fact that outsiders can make money there, while they can't (today) in say, North Korea, doesn't change the essential nature of the beast. Dictatorships can be great places for non citizens who are treated well and can always leave if they want to. Except that the jews/communists/gypsies/homosexuals etc were killed in their millions, Nazi Germany was a great place to live and work in(See IBM and the Holocaust), as long as you didn't challenge the gang of thugs ruling the country.
I should add that I have lived (and am writing this) in China. It's clear that many of the "OMG Communists!" posters have not been to he country.
Are you a Chinese citizen?
"No Twitter? Facebook? Livejournal? Guess what? The locals weren't using it anyway (not in appreciable numbers)"
appreciable numbers or not - how important are they in interaction with the outside world without mediation of the state. (eg: sichuan earthquake - twitter/youtube played an important role in revealing to the 'outside world' the live events rather than orchestrated statements that usually come from the govt. after a week.)
More about the dark gulag or not: It is well known how people in prisons make many of the items that land up on a 'westerner's desk' (eg: promotion items like key chains for coke) - and yes the prisoner is paid for what he works - an apple a week. More examples to cite - the Iphone prototype kid who killed himself? Let's speculate this iphone prototype being developed in another country - say US or even India. That kid did no harakiri. I will rest the case for the conspiracy theorists.
Do you know of the efforts the govt. takes to "erase" the memories of the 1989. The only chinese youth that have 'heard' of this event are the ones that live abroad.
Here's what I would like to hear about - "real" entrepreneurs from China. real -> first generation with no connections to the military or the govt. Everyone we know and hear about are the from the govt. or sons of govt. officials (like the rich russians)
We have few Canadian Chinese here - why don't they speak?
"Indeed, by not coming here to visit and or spend a bit of time, you're denying yourself experiencing one of the more vibrant and fascinating places on earth." - Agree with you.
PS: for context - I am writing this from a chinese special area zone,not china. I am not a citizen.
Credulously reporting unemployment statistics from the US government is naive. Credulously reporting unemployment statistics from a Communist dictatorship is journalistic malpractice.
[T]he Chinese economy is more hospitable for both entrepreneurs and job seekers, with [government lie]. Unemployment in urban areas is [government lie].
Absent the statistics, the "more hospitable" claim is the reporter pulling something totally out of their hindquarters to make the story work.
This is just an anecdote, but it really caught my attention and made me think about what the future may hold. That's a Harvard graduate who left the US and ended up starting a business in China.
I would think doing a web based company would be limiting if you have to deal with the government's internet policies.
And any user generated content is strictly forbidden by the government because eventually UGC will involve politics topics.
And corruption, you have to go through months apply process of a video site 'license', or blog site 'license' or news site 'license', and they are managed by different bureaucratic departments of the central government.
And big companies like QQ.com is likely to copy your idea and deploy it on their own QQ.com infrasture and overtake your start-up by one day.
So overall it's very hard to do start-ups in China, unless you have a very strong social background.
1. Chinese sites are all "[rip-offs] rip-off of existing sites and translate of interface and function"
When anybody comes up with a good idea, a dozen other people will try the same thing. Have you ever seen Freundfeed? How many blogging sites are there out there (livejournal, blogger, blogspot, wordpress)? Copying of your idea encourages competition and innovation.
Indeed, the reality is the EXACT OPPOSITE of what you said: western companies fail here in China because they come and translate the interface and functionality, and then expect the locals to flock to their site and use it in the same way westerners would. They bring in a team of western managers to hire some locals to do the translation, and then basically sit there waiting for the $$ to roll in.
The problem is, the locals use the Internet in a radically different way from Westerners. The locals are nearly all kids, spend hours and hours a day in front of the computer, and are lonely and bored. (single child policy). They don't want to "connect" with their friends and post daily updates of what they're doing / eating for breakfast. They want to meet new people and play and talk about crap.
So, companies like xiaonei, that take the basic Facebook formula, but then add in tonnes of gaming and fun ways to interact with other people will of course kick the foreign companies' collective derrières. Ebay failed because they don't understand how locals pay for things. Taobao came along with a better idea and won the market.
2. "... any user generated content is strictly forbidden by the government ..."
China has a zillion BBSes (sorry, I don't have the exact number. It's huge). There are over 2 billion registered BBS users here in China - For only 300+ million internet users. People spend hours online with multiple accounts and personalities so that they can chat with their various girl- and boy- friends and take on different viewpoints in different places. (* note these are not old school dial-up BBSes but basically online community forum websites they just call BBSes).
People talk about politics all the time, either directly, or indirectly via codewords and the like. Avoid talking about organising large demonstrations and strikes, and you're likely to avoid the ire of any officials or censors.
Websites like Tudou.com, youku.com, and yupoo.com have massive massive massive amounts of content uploaded to them daily. Of course, lots of it is pirated TV and movies, but the locals are also constantly uploading the same kinda stuff you see on youtube and flickr. (Funny sidenote: the locals go to Herculean efforts to try and get around the ban on pr0n too. It turns out, they like it as much as anybody else in the world).
3. Months to get a license.
You can get an ICP, which is the local internet content license, in a matter of days. One of the big restrictions is that you usually need a local to do this registration for you. However, the reality of the matter is that few (if any) foreign companies succeed without local partners and the like here anyway (foreigners -really- don't get the local market), so it's not that onerous. Worst case, find somebody with a local husband or wife and just get them to help you with the whole process.
4. Companies copy your idea and overtake you.
What company in the US or Europe doesn't worry all the time that Google, Microsoft, or Apple isn't going to do the exact same thing? This is like saying "competition is bad". It's the cornerstone of what we're all doing here. And again, if your idea is good and you know what you're doing, you'll have a big edge over these guys. (There are one or two big examples to the contrary to what I've just said, but they're in court here in China and could very well go the way of the "little guy").
Every market in the world has its peculiarities, differences, and problems. China is no different. Look closer, spend some time really trying to understand the market, look at the numbers, and you'll find that this is a very fun place to do startups. Only 25% of the country is on the internet here right now. There are hundreds of millions of bored and lonely kids (and adults) who want to play and connect with others. The growth opportunities are staggering.