Foreign firms shouldn’t walk from China

Marketplace Staff Mar 22, 2010
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Foreign firms shouldn’t walk from China

Marketplace Staff Mar 22, 2010
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TEXT OF COMMENTARY

Kai Ryssdal: Doing business in China has never been easy, but it’s gradually getting harder. You can just ask the enormous global mining conglomerate Rio Tinto about that. Today in Shanghai, four of its executives confessed to taking bribes. And they are still facing charges of corporate espionage. Overall, though, Beijing is just counting on homegrown companies to be able to do more.

Commentator Kent Kedl has been working in China for 20 years. He says foreigners just have to get used to that.


Kent Kedl: The other day I was sounding off about something a Chinese company had done when a Chinese friend of mine cut me off. “Kent” he said, “We Chinese have only being doing this for about 18 years. In terms of global business, China is like a teenager.”

Now China’s a country with 5,000 years of history, and I wouldn’t normally have the audacity to call her a teenager. But since my Chinese friend said it, I’m going to run with it.

Back in the ’80s and ’90s — China’s pre-teens, if you will — doing business here was pretty straightforward: Every foreign company was forced into a joint venture. It was basically an arranged marriage. The Chinese government chose partners for the kids while they were still young. And it wanted to marry off the ugly ones first.

We foreigners played along. After all, this was a big family destined to have a lot of clout: A billion people, a squillion dollars. Let’s buy the ring! And order the cake.

But since the 2008 Olympics, China has emerged into what you might call its teenage years. It’s confident, some might say arrogant, even, belligerent.

Last year, Beijing said, “If you want to supply all the infrastructure boondoggles we’re investing in, here’s the key requirement: Don’t be a foreign company.”

And at the Copenhagen Climate Conference, the Chinese did not play nice. “Hey,” they told the West, “you guys got to pollute when you were adolescents. Now it’s our turn.”

This is not the smiling kid China your grandpa remembers. Today, the country is high on hormones and feeling its power. It’s the high-school quarterback and the prom queen rolled into one. Heck, it’s the lunch lady too. China can tell the world: “It’s my house, my toys, my rules. You don’t wanna play? Go home.”

Now, lots of American companies are pretty miffed about this, and some want to walk away.

But I say: let’s stay in the game. China still needs lots of help and support from foreign companies. It’s just more choosy now about who can help, and how. You know, nobody gains if you abandon a teenager. And nagging doesn’t work either. Let’s not sit and whine about China. Let’s respect it as the adult it’s becoming, even if we’re a bit anxious sometimes about how it will turn out when it grows up.

Ryssdal:Kent Kedl is a management consultant in Shanghai.

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