Doing Business in China – Is the Pain Avoidable?

After a friend and fellow longtime China Hand in Beijing complained about the treatment of American companies in China, calling the shenanigans the worst he has ever seen, Forbes contributor Janet Carmosky asks “two obvious questions” about China’s unfriendly business environment:

1. If operating as a foreign firm in China is getting harder, why are we still there? Simply put, China’s importance to American business is growing. It’s a top line revenue source and an integral piece of global supply chains. The 2012 US-China Business Council Member Survey the China operations of 89% of its member companies are profitable. Moreover, China has replaced the USA as the world’s top trading partner, meaning it is an important supplier and customer everywhere in the world.

2.  Is any of this pain avoidable? Exactly who might do exactly what differently, given that China is not going away, that its impact is increasing, and that it is getting more difficult to deal with?

I’m afraid that America – from the head office of XYZ Inc. in St.Louis, to the Park Avenue Board of Directors of an operating entity based in Qingdao, to the US Congress and The American Public – has convinced itself that the problem is China Does Not Follow The Rules, and If They Did Everything Would Be Better.  The reason America is losing time, money, and global influence is that China Hands like me and Hank are overly sympathetic with the Chinese, who don’t play fair, and we are helping the Chinese to rob us blind. In other words, “China Hands” like me and Hank aren’t Team Players.  China negotiations expert Andrew Hupert is among those giving voice to this school of thought. (

Of course the China Hands, the Over Sympathetic saps such as me, see it differently. We’re stating the fact that, while the board is identical visually, the Chinese are playing chess and we are playing checkers. We need to accept that competition is not between firms (American firms and Chinese firms), but between our firms and China’s government.  If the objective is winning, we should teach more of our people the game as it really is being played. Don’t blame the people who do the dirty work for not being team players. The real issue is that head office doesn’t have a team. They have pain killers, denial, and the habit of indulging in the wishful thinking that the Chinese will start acting like us soon, or else…? We’ll get stronger pain killers, right?


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