February 9, 2010
Is the foreign business community fed up with China? Panda-huggers vs. dragon slayers
Here's a short take on that from Gady Epstein of Forbes.
For some background on the debate, here's the article that got the discussion started, by James ("One Billion Customers") McGregor. He writes, "In my more than two decades in China, I have seldom seen the foreign business community more angry and disillusioned than it is today. . . .Visiting CEOs' banquet-table chatter is now dominated by swapping tales of arrogant and insolent Chinese bureaucrats and business partners. The litany includes purposefully inconsistent and nontransparent enforcement of regulations, rampant intellectual-property theft, state penetration of multinationals through union and Communist Party organizations, blatant market impediments through rigged product standards and testing, politicized courts and agencies that almost always favor local companies, creative and selective enforcement of WTO requirements ... The list goes on."
On the other hand, last summer the US-China Business Council did a survey of its members (who all do business in China); the responses there indicate what the survey report called "cautious optimism" and don't seem to reflect a lot of anger and disillusionment. Perhaps things have gone downhill a lot in the last half year, or perhaps everyone is seeing a different part of the elephant. (See "Survey Reveals Cautious Optimism," China Business Review, Nov.-Dec. 2009, pp. 60-64.)
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Critical factor is not MNC frustrations in China, but American unemployment rate.
They can be frustrated forever and continue milking the Chinese market. Who cares about their "feelings." But if the American economy continues to run aground with high unemployment, the structure of global trade relations will get shaken up.
Posted by: lark | Feb 9, 2010 2:07:35 PM