
Ask HN: Do US companies regret entering China? - dmfjfj
Some US companies flourish in China (e.g. KFC, Costco) while most end up being defeated by local rivals due to multitude of reasons.  For those that entered, has the money and effort been worth it?  What ended up costing more of your time than expected?
======
anonu
Abro certainly regretted it:
[https://www.npr.org/sections/money/2019/03/15/702643451/epis...](https://www.npr.org/sections/money/2019/03/15/702643451/episode-900-the-
stolen-company)

~~~
Ankhers
But they never actually entered the Chinese market. They just had a
counterfeiter that was based in China. And, through the help of Chinese
officials, they were actually able to shutdown the counterfeit manufacturer.
Tim, the ABRO rep from that podcast, even claims that the Chinese government
is doing a great job at protecting foreign IP.

------
mscasts
I know of a Swedish company that made a deal with a Chinese company, the
Swedish company no longer exist.

~~~
coldtea
Funny, I know of a Finnish company who placed as its CEO an ex-executive of an
American company.

The company then adopted said American company's platform, had consecutive
huge losses (for the first time in decades), and was forced to sell several
divisions to the same American company...

~~~
a012
Nokia, right?

~~~
coldtea
I can neither confirm or deny this

------
davismwfl
Micron regrets it, essentially having a significant amount of their chip IP
stolen by Chinese firms they were involved with one way or another.

~~~
dis-sys
Please read more recent news before posting out of date info not useful for
anyone. Micron is actively seeking more technical cooperation with Chinese
companies completing in the NAND business. Source here [1].

[1]
[http://www.businesskorea.co.kr/news/articleView.html?idxno=3...](http://www.businesskorea.co.kr/news/articleView.html?idxno=35665)

~~~
davismwfl
I read the article you linked, and don't see where that is incongruent to what
I said.

Micron has stated they regret the situation and how they were forced to do
business in China (which many other companies have expressed too, e.g. forced
JV's etc). China is a substantial amount of Micron's sales, so they cannot
walk away and they have to find a way to mange the situation and still protect
the company. They are a business, having regret doesn't mean you take your
balls and go home, they need to make money for their shareholders so they will
do what is required.

To be clear, the US opened a trade investigation last year into it [1], and
China opened it's own anti-trust style investigation as retaliation [2].

[1] [https://www.reuters.com/article/us-usa-justice-china-
espiona...](https://www.reuters.com/article/us-usa-justice-china-
espionage/u-s-indicts-chinese-taiwan-firms-for-targeting-micron-trade-secrets-
idUSKCN1N65R2)

[2] [https://www.investors.com/news/technology/micron-
technology-...](https://www.investors.com/news/technology/micron-technology-
stock-china-antitrust-probe/)

------
smacktoward
Who ever regretted training their replacement?

~~~
scoobyyabbadoo
And why make China come here to steal your IP when you can just ship it to
them directly?

------
TRossi
It would be nice to show statistics, isolated cases are rarely really
interesting to discuss. I've been in China recently and there are plenty of
foreign brands, the most successful ones are those who adapt their message,
naming, colours, etc.. to the Chinese taste, which of course should be
expected.

~~~
dmfjfj
KFC famously sold congee on their menu and Costco only sells foreign made
goods (ie. made in Canada/USA) in China.

~~~
uranusjr
The Costco part is not true. There is definite evidence the recently-opened
Costco in Shanghai sells Chinese Moutai (or at least sold at its grand
opening, not sure what happens after they got snapped off the shelves). This
is not specific to China either; it is common for Costco to sell goods local
to its stores, not just made in Canada/USA.

------
gourou
In "AI Superpowers: China, Silicon Valley, and the New World Order", Kai-Fu
Lee (former president of Google China) says many US companies don't give
enough resources to their Chinese branch and that's why they fail. The Chinese
internet ecosystem being so different than the Western one.

For example, Western users are used to refining their search query and
clicking a single link among the results. Whereas Chinese users click most of
the links and are used to them opening in different tabs.

However, it took months of convincing to get Google to create a new tab when
clicking a link in search results.

[https://en.wikipedia.org/wiki/AI_Superpowers](https://en.wikipedia.org/wiki/AI_Superpowers)

------
css
Google probably regretted it:
[https://en.wikipedia.org/wiki/Google_China](https://en.wikipedia.org/wiki/Google_China)

------
danzig13
Prior to my involvement in my current company, they were discussing setting up
production in China. After my involvement in the company, I have no idea how
they thought they could pull it off. For whatever reason, they did not do it.

Rumor is a Chinese owned company is already ripping our products off; I can
only imagine if we had production occurring there.

------
baybal2
This will be a very interesting topic to talk about for me, I beg and hope
that it will not be subject to "automatic" deranking.

The topic getting controversial, by far does not indicate it being unworthy of
discussion.

~~~
dmfjfj
Unfortunately, this submission is already flagged. I am genuinely interested
to know. And it wasn’t meant as an anti-China question.

------
Leary
Depends on the business model. Some businesses cannot operate without
outsourcing manufacturing to China. China also has more potential for growth
than US and Europe combined.

------
dirtyid
For a holistic overview it's useful to read Chamber of Commerce surveys,
there's a recent one by CGCC (China General Chamber of Commerce - US). The
basic gist is that growing market and financial motives play biggest role in
something like 85% of respondents. Kind of no-shit take away. Don't rely on
cherry picked anecdotes of XYZ failed ventures or attributing "regret" because
some IP got stolen. There was an interview covering a recent American Chamber
of Commerce in Shanghai poll of US data on top priorities for current trade
talks and 0.4% of respondents think force tech transfer is an important issue.
Which should be obvious since the vast majority of foreign businesses
operating in China don't have extremely technical IP that can't be easily
replicated, or have very well funded and vocal lobbying groups state side, or
is an legitimate intersection of commerce and security with respect to dual
use technology, or even that the cost of stolen IP is not factored into these
business decisions in the first place. Many US companies are not in China as
supply chain operators, they're there to meet demands of Chinese consumers and
serve Chinese market to the point where China is a significant share of their
revenue. Another example, latest U.S. China Business Council's (USCBC) survey
tldr was basically US companies overwhelmingly convinced Chinese companies
receive (alledged) unfair state subsidies but they literally don't care
because even with the tradewar, 97% of respondents said their China operations
were profitable which is UP from 85% in 2015. There's also good podcasts like
The Trade Guys (CSIS), Sinica / ChinaEconTalk that covers these topics by
actual subject matter experts.

E: I think it's important to highlight that while that data suggests profit
seeking US companies overwhelmingly do not regret entering China, that doesn't
mean it's beneficial to long term US interests. You have to understand that on
paper, China - US trade accounts for a few percentage points of each other's
GDP, and indeed both economies are actually not very trade dependent. Many
companies and people will still get hurt, the pain will be disproportionately
applied, but this tradewar is mostly political theater that both leaders are
exploiting since there is no existential risk.

------
robin_reala
Why US companies specifically?

~~~
skrebbel
Some HN'ers forget that not all of HN is from the US. Not too werid given the
amount of local SF news on here. OP likely means "non-Chinese" or "Western".

