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

reciprocity

[OrangeTide]

If US companies can't operate under fair rules in China, should Chinese companies be permitted to operate in the US without restrictions?
We can still trade, but do we necessarily have to allow service oriented businesses operate on each other's soil?

Re:reciprocity

[npslider]

Allowing over a billion Chinese workers willing to earn far less to compete directly with higher paid Western workers sounds good to me. Every company out there would rather pay their employees well, than earn a greater profit through reduced payroll expenses, and every consumer would rather pay 3 times more for the same product because it is made in their home country.

Re:reciprocity

[Anonymous Coward]

It is not about open and unrestricted. It is about an even playing field. A Chinese company coming to the west mostly finds that even playing field. A western company going to China finds that he not only competes against his competitors but also against the Chinese state.

There is no way this can be construed as benefiting the west. It does not and never will. It is unfair competition and it cannot endure if you want a thriving, open, unrestricted economy.
It is just like one country throwing up tariff-walls and the country not . That is only good for one country.

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.

Re:Regulatory enviornment is only a small factor

[johanw]

"Intellectual property" is an stupid "invention" that has gone too far and is reducing inventiveness. The Chinese are wise to ignore that bullshit.