When It Comes To China, Google's Experience Still Says It All (backchannel.com)

Uber's defeat by its local competitor in China was the latest of a string of such cases, and Google's experience trying to establish itself there is illustrative of the challenges facing all American tech companies that aspire to dominate in that market, writes reader mirandakatz. Steven Levy writes at Backchannel:Perhaps because its market share never rose high enough, Uber did not experience the brunt of China's regulation. Still, who's to say what would have happened if Uber had managed to outperform Didi? If Uber's market share topped fifty percent, would the government have sat by as a neutral observer? Would the Uber app start experiencing slowdowns? Would its drivers be stopped? Would airports welcome Didi cars and not Uber? My bet is that, mixed with disappointment at not winning the country, Uber executives might be feeling a bit relieved that such worries are now off the table. As it is, Uber has become one more casualty in China's other wall, a towering fortress of restrictions, regulations and unfair play that keeps down American internet companies.

Comments

Re:Unfair?

[Ogive17]

Spoken like someone who has zero knowledge of business in China.

They do not allow wholly owned foreign subsidiaries, any investment must be at least 50% China owned. They do this to keep profits inside China and to rip off (borrow) technology for any company that does it. It's not just American companies, it is everyone.

China's 1 billion potential customers is hard for companies to pass up. Exporting to China is very difficult because they will price you out of the market. Your option is to give up 50% of control or stay home.

Regulatory enviornment is only a small factor

[wickerprints]

The overriding issue with doing business in China is corruption and intellectual property theft. In plain English, that means (1) the government runs on bribery, and (2) Chinese cultural values do not regard things like corporate espionage, patent infringement, bootlegging, and knockoffs, as being unethical. This is why non-Chinese companies tend to fail, because they allowed to enter the market only long enough until a Chinese company can copy their ideas and property.

Re:Unfair?

[Ogive17]

Any manufacturing must be 50% Chinese partnership.