Western businesspeople are keenly following the case, looking on with a mixture of polite sympathy and hidden schadenfreude as Danone slides into disaster. The multinational food company, which earned revenues of ‚Ç¨14.1 billion ($19.2 billion) in 2006, has since slipped into the role of public enemy No. 1 in the People’s Republic, partly as a result of its clumsy and arrogant handling of the situation.
The public quarrel is highly symbolic, because it ultimately affects every foreign company, and because it serves as a lesson in how not to behave in the huge Chinese market otherwise so highly praised by corporate executives in the West. And yet, despite their enthusiasm they know how fragile economic relations with the Chinese can be, and how narrow the divide is between a good deal and the risk of being taken to the cleaners by the Chinese. [Full text]