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U.S. companies are picky about investing in China. The exceptions? Burgers, lattes

11 Comments
By AAMER MADHANI, PAUL WISEMAN and ELAINE KURTENBACH

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11 Comments
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Not much in the way of sensitive tech transfer in fast food /: Still, investors could lose big if there is a conflict between the US and China that leads to a rupture in trade.

5 ( +5 / -0 )

Yes, no burgers or coffee for China.

1 ( +1 / -0 )

Basically don't go into to China unless you don't really care about having your intellectual property stolen.

5 ( +6 / -1 )

This is surely not what Chinese President Xi Jinping had in mind as he made the case to American CEOs about the upside of China’s “super-large market”

Desert Tortoise is right. Fast food and coffee houses do not face the obscene challenges that most companies face trying to sell their products inside China.

Companies considering doing business in China face a central government doing almost everything it can to protect domestic business, while suctioning any corporate and manufacturing information it can from hapless foreign businesses.

First, Chinese regulations require the disclosure of trade and product secrets. Period.

Second, their regulations not only allow Chinese authorities to visit production facilities outside their borders, their regulations also applies to suppliers to those facilities.

Third, all product contents, production processes and R&D must be documented and disclosed.

If a compnay hesitates at all, then they are disallowed from their market. Period.

It is no secret that Chinese regulations impose restrictions on foreign companies that go against standards they routinely observe, that are widely accepted elsewhere. Instead of recognizing existing acceptable international industry standards, specific tests for the Chinese market are required. Time was that mutual recognition of standards allowed goods to be exportable at a reasonable cost. But since every business has to test its products for the globe THEN additionally for China, then business in China is often not economically feasible.

It is clear that Chinese authorities intend to thoroughly control access to the domestic consumer market in mainland China. Ironic that such strict protectionist policies comes from the same Party officials that frequently complain the loudest about any trade barriers - real or imagined - by any other country.

1 ( +2 / -1 )

all foreign companies should avoid having offices or factories in China. Unless you want them raised & your employees arrested for ‘spying’

5 ( +5 / -0 )

McDonalds, Starbucks, KFC and friends all pretty much had to write off every nickel they invested in Russia when Putin invaded Ukraine. All these new outlets they are opening in China are going to be equally worthless to them the second Xi decides to invade Taiwan. They are exposing themselves to a mountain of risk there.

4 ( +4 / -0 )

Basically don't go into to China unless you don't really care about having your intellectual property stolen.

By law the intellectual property must be shared with China..

Enter in a 1400 million people market worth it..

Cut the drama..

-4 ( +0 / -4 )

By law the intellectual property must be shared with China..

All the more reason not to do business there.

4 ( +4 / -0 )

There's a lot of reasons not, to do business with China at present.

I hope, the Xi Government will collapse - like the Roman Empire, and a new freer political landscape will flourish thereafter - leading to China becoming the next "Germany" of quality products, and respect.

3 ( +3 / -0 )

By law the intellectual property must be shared with China..

Enter in a 1400 million people market worth it..

Cut the drama..

In the 1990s firms could convince themselves that their intellectual property would be respected and nobody wanted to miss out on the theoretical bonanza of "the world's biggest market". Companies were willing to overlook a lot in order to get their corporate foot in the door.

But experience has proven convincingly that the CCP has absolutely no respect for a firm's intellectual property and is quite happy to use government organized theft to steal IP from abroad. But the real show stoppers are the requirement to put a CCP Zampolit on the corporate staff, pay people to sit through monthly CCP propaganda sessions and then see firms raided and staff arrested for doing basic financial due diligence. When doing a normal sort of job, normal for capitalist nations, can get you arrested for "spying" there are positive incentives to leave the Chinese market. No amount of fanboi hand waving can change that.

1 ( +1 / -0 )

Good luck.

0 ( +0 / -0 )

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