44 ms·

When It Comes to China, Google’s Experience Still Says It All

277 points by dwaxe 10y ago

paradite 10y ago
duplicate of this: https://news.ycombinator.com/item?id=12218211 https://news.ycombinator.com/item?id=12218211
- dwaxe 10y ago
  My bad, didn't see Steven himself posting it! Not sure why he used a different title than the one he chose for his own publication.
cronjobber 10y ago
Articles like these never fail to drive home just how much of a US patsy the EU has always been.
- mtgx 10y ago
  Indeed. And yet you keep seeing articles from NY Times, Bloomberg, and even Reuters, with an almost negative tone about how the EU basically wants to destroy American companies by putting some more regulations on them or daring to investigate them for anti-trust or tax avoidance. And here comes China that basically says from the start to all foreign companies: "You give us half, or you're out. Take it or leave it. And we still get to impose whatever regulations, official or unofficial, want, depending on our mood. We'll also turn a blind eye to local Chinese companies completely ripping off your technology. Sounds good?"
- mywittyname 10y ago
  Unlike the EU, China has the capability to build companies that could rival top US players. So it's unsurprising that China takes the uncompromising approach to foreign investment that they do. I'd love to see an American's reaction to a speech where Xi Jinping exclaims that he will ensure that all Americans start using Baidu as their search engine.
  - cronjobber 10y ago
    Europeans had been promised and conditioned that their countries would give a shit about privacy. It would have seemed unlikely to European founders that they'd be allowed to run a blatant commercial spyware operation like Google or Facebook; and in fact I'd bet that they would have met fierce regulatory resistance... until Google and Facebook waltzed in from the US and surprise, nobody put up any resistance until the war was won. Yeah, sure, long after the war was lost, some EU regulatory theater. I actually bought a N900 back in the day. It was good. Nokia smartphones could have been a thing, not just because they were good, but they'd taken off just a few years later especially on privacy grounds. There's not nearly enough conspiracy theorizing about Elop blatantly Osborning Maemo...
    - cptskippy 10y ago
      Elop's actions as a whole seem so blatantly towards selling the company off and yet there has been very little scrutiny of them.
    - pitaj 10y ago
      > Europeans had been promised and conditioned that their countries would give a shit about privacy Do Europeans really care that much about privacy? As an outsider, I don't see much fighting for privacy coming from Europe. > blatant commercial spyware operation like Google or Facebook What kind of regulation do you think would stop this "spyware" as you call it? Are you really going to restrict an internet firm from collecting user information with the user's consent and then selling that information? What regulation would you do? Something like "right to be forgotten" is the absolute worst direction to go. When I first heard about it, I knew the regulators were idiots. That is patently opposed to free expression.
  - serge2k 10y ago
    > I'd love to see an American's reaction to a speech where Xi Jinping exclaims that he will ensure that all Americans start using Baidu as their search engine. Why would anyone care?
    - 10y ago
- xiaoma 10y ago
  Europe is a has been. And it has been for at least 70 years. China is rising.
  - jsn117 10y ago
    Europe is free, China is not.
    - xiaoma 10y ago
      China is competently run, Europe is not.
      - jazzyk 10y ago
        Oh, really? https://www.theguardian.com/business/2016/jun/16/chinas-debt-is-250-of-gdp-and-could-be-fatal-says-government-expert https://www.theguardian.com/business/2016/jun/16/chinas-debt...
        xiaoma 10y ago
        Yes. http://data.worldbank.org/indicator/NY.GDP.MKTP.CD?end=2015&locations=XC-CN&start=1960&view=chart http://data.worldbank.org/indicator/NY.GDP.MKTP.CD?end=2015&...
        jazzyk 10y ago
        Showing total GDP, without accounting for population is disingenuous. Don't you think that GDP per capita would be a better indicator, perhaps? http://data.worldbank.org/indicator/NY.GDP.PCAP.PP.CD?end=2015&locations=XC-CN&start=1960&view=chart http://data.worldbank.org/indicator/NY.GDP.PCAP.PP.CD?end=20...
        xiaoma 10y ago
        China's outperformance of Europe is undeniable. In the chart you shared China was at barely 1/20 of Europe's level a generation ago and now is over 1/3. What will the comparison be in one more generation?
- notfromhere 10y ago
  What are you going to do when your national defense is wholly dependent on the U.S.?
deleted 10y ago
[deleted]
Unbeliever69 10y ago
"Put simply, China likes locals to succeed over foreign companies, and will act accordingly." This is SO Un-American!
- deleted 10y ago
  [deleted]
sunstone 10y ago
The West and China are playing a global chess game and have been for some time. An impoverished China was not in the West's interests and so they agreed to buy all kinds of lowish tech Chinese made goods. In return most jurisdictions enforced a balance of trade with China, with the exception of the US. On their end China insisted on joint ventures and technology transfer to the extent Western companies would comply. Western companies were reluctant to give up their best tech so China ended up with last generate tech which, still, was way better than it had. This was a status quo that benefited both sides enough that it worked well enough for 20 to 30 years. Now the stakes are getting higher. China wants to level up by buying foreign tech companies with, essentially, state capital and the West naturally doesn't see that to be in their interests and so they block those purchases. The West wants to enter China with their latest internet block busters and China doesn't see that in their interests and so they block that but, more often in a soft way. They open the door, allow foreign companies to enter and train locals in the technology and then slam the door when they gain traction. Both sides are well aware of the stakes and the situation what's evolving are the techniques and strategies of the competitors. It's a big boy's game for large nation states and if you're not that big you're likely to take some bruises. If you're a fan of raw capitalism though pull up a chair and a beer and watch the game.
- skynetv2 10y ago
  > China ended up with last generate tech we are way past that point. China has leap frogged pretty much everyone else in every aspect. It took China less than a year to build the worlds fastest supercomputer (unclassified) after US placed restrictions on related technology exports to China. China was building components for supercomputers over the past decade, they would show case a network, a small processor, cooling system etc individually. No one and I say again, NO ONE, expected they would build a full system at such a capability in such a short time.
  - batbomb 10y ago
    Owning the fastest supercomputer in the world is mostly irrelevant these days, because the entire thing just gets partitioned into smaller chunks in actual use. It's just never in anyone's interest to run a job that utilizes all the resources. At the end of the day, most of these computers are just a pissing contest and are rarely cost effective, and are almost always a huge pain in the ass to use.
erikb 10y ago
I wish more countries would support their own brands as much as China.
- cocotino 10y ago
  Political correctness is the plague of our time.
merraksh 10y ago
According to reports on the ground, Didi used its local knowledge to act more nimbly in satisfying Chinese customers. But my guess is that if the American ride-sharing company had been more successful, China would have put a Mao-sized thumb on the scales. So Didi was actually better; it's a bit unfair to say that otherwise the game would have been rigged.
- hyh1048576 10y ago
  Didi seems to be better at e.g. customer service. For example, their support can be reached by phone, and Uber support can be only reached via Email. I'm sure people know, in China, call center operates way cheaper than in U.S. This and the fact that people are unwilling to use Email are some of the major sources of complaint on Uber I've heard about.
  - MrBuddyCasino 10y ago
    If thats true, Uber was simply being incompetent here. We recently launched a shop on Tmall (Alibaba version of Amazon), and you usually hire a local agency to provide customer support for the chinese. 80% of the traffic is mobile, so they use SMS and phone calls a lot, emails much less than in the west. Also chat, they expect to be able to directly talk to someone via chat from the website. Not doing so means disregarding local habits, good luck with that.
- steve-howard 10y ago
  That's true, and I think this article was just using Uber as a jumping-off point to talk about doing business in China. I worked for a company not long ago that did business there, and the hoops they had to jump through were enormous.
- amasad 10y ago
  Yup, this is poor writing: "Y is true because had X been true then Y would follow"
teawithcarl 10y ago
It's actually worse than described in this article. XiJinPing is beyond ruthless, law is meaningless. Even this under-describes the reality.
- LiweiZ 10y ago
  Your comment should be the foundation for discussion about China nowadays.
hyh1048576 10y ago
> As late as this past June, Uber was predicting it would pass its rival within a year. This is simply <del>not true</del> (edit: not going to happen). I'm a fan of Uber, but using Uber is kinda like a exotic thing to do (while Didi is more common). Uber can be only used in major cities, on the other hand Didi can be used almost anywhere. Didi simply expand faster in China. (Uber is available in less than 20 Chinese cities while Didi appears in hundreds.) Also I don't view the merge of Uber China and Didi as a failure on Uber's side. It's more or less a peace treaty or truce (edit: between Uber per se and Didi, yes I know Uber China was merged). Uber-like service is simply too cheap in China for a long time, (I Uber to work for less than $2 for example), and both side cannot hold it any more. It's as simple as that. (Before the Didi-Uber merge, there's a similar merge of Didi and it's major competitor Kuaidi, thus the full name Didi-Kuaidi, in which both side are Chinese companies and it's just that after long competition investors decided to facilitate a merge. This merge makes Uber the second largest, before that they were the 3rd.) The story between Google and Baidu is a whole different one. First search engine as a gateway to informations is viewed as vital by the Chinese government and government really worked on Baidu's side.
- erdevs 10y ago
  > > > As late as this past June, Uber was predicting it would pass its rival within a year. > This is simply not true. Yes it is true. Kalanick's investor updates from 24-12 months ago were all gung ho on China and how Uber was seeing as much or more success there as any Western country ever had. Their explicit goal was to outcompete Didi and become the #1 on-demand service in China (on-demand generally... not just for transportation). Their timeline for winning majority market share was 12-24 months out, and that is how they justified the extremely, extremely aggressive cash burn in the market. (Nobody burns $1B+/yr in cash gunning to grow slowly into second place.) Believe me when I say that several billion dollars of raised capital and $10B+ of Uber's imputed valuation was attributed to their potential in China, their growth there, and their plan to dominate in the next 12-24 months. What evidence have you that this is "simply not true." Some of these statements to investors have become public knowledge, which you'll see with a simple google search. Just one of many articles and quotes from this timeframe outlining Uber's explicit goal of becoming dominant in marketshare in China within a year: http://www.digitaltrends.com/business/uber-beat-didi/ http://www.digitaltrends.com/business/uber-beat-didi/ Note as well how cocky and aggressive Uber was here in their marketing, public statements, etc. > Also I don't view the merge of Uber China and Didi as a failure on Uber's side. It was absolutely a failure. Uber's goal was to beat Didi and dominate in China, as is their goal in every single market they enter. Did they succeed or fail in that goal? Uber did a good job salvaging value here in having its Chinese operation acquired by Didi. But make no mistake, it was a failure and this falls far short of both their intentions and their promises to investors. Also, this was forced on Uber by investors. People lost faith that Uber could win in China, and rightfully so. The cash burn was staggering and there was no end in sight and no clear path to actual victory, despite the previously lofty updates and promises. > It's more or less a peace treaty or truce No. A peace treaty or truce means each side remains independent but they agree to stop warring with each other. This is an outright purchase. Uber lost the war and it's best option was to salvage value in Uber China by merging into a minority, small position (only 18%) within Didi's business. > Uber-like service is simply too cheap in China for a long time, (I Uber to work for less than $2 for example), and both side cannot hold it any more. It's as simple as that. Yes. It was a war of attrition. And Uber lost the war. As simple as that. That's why it makes no sense that you're framing this as somehow just a "peace treaty". > Before the Didi-Uber merge, there's a similar merge of Didi and it's major competitor Kuaidi.. Yes, this was a brilliant move on Didi's (and Kuaidi's) part. On top of this, Didi struck a partnership with Lyft. In terms of military strategy, Didi was encircling Uber on all sides. Instead of having to fight a war on two fronts with Kuaidi and Uber, they used Kuaidi and Lyft as springboards. This was absolutely brilliant and bold strategy and it's an approach few start-ups could pull off or would even attempt trying. M&A and mergers are extremely complex for start-ups to tackle and this was brilliant strategy. 2 years ago, Uber was playing the role of the big dog and pressuring to buy Didi. After Didi's great growth and very effective strategy over the past two years, the roles were totally reversed and Didi bought Uber's China operations for what was ultimately a pittance. 18%, which will be further diluted over time. > The story between Google and Baidu is a whole different one. First search engine as a gateway to informations is viewed as vital by the Chinese government and government really worked on Baidu's side. I think the governemnt helped Didi quite a bit too. As did Tencent.
lambdasquirrel 10y ago
> But my guess is that if the American ride-sharing company had been more successful, China would have put a Mao-sized thumb on the scales. Anyone remember when GM had to be bailed out, but at the time, they were actually generating profits in China and it was one of their few bright spots? Ford likewise. I just don't buy this.
- Buge 10y ago
  Well some members of my family own a factory making car parts. Many parts ship to Ford plants in China. China recently created a new rule saying Ford cannot buy parts from the US. So we either had to build a plant in China, or stop shipping to Ford. We stopped shipping to Ford. They were our largest customer.
  - rahimnathwani 10y ago
    Wait, what? Can you point us to the rule? It sounds like the WTO might be interested.
notliketherest 10y ago
Not to mention China's state sponsored thefts of American IP (esp tech), which is no doubt being used in Chinese carbon copy corporations protected behind the great firewall.
- anonymousDan 10y ago
  I'm probably opening myself to accusations of whataboutery but it's not like America has never partaken in state sponsored industrial espionage: http://www.washingtonsblog.com/2013/10/nsa-busted-conducting-industrial-espionage-in-france-mexico-brazil-and-other-countries.html http://www.washingtonsblog.com/2013/10/nsa-busted-conducting...
bduerst 10y ago
Are there any cast studies on multinational companies that were successful in China and outlined why? Companies like Danone?
- optforfon 10y ago
  Sure. There are tons. Starbucks is everywhere, KFC, McDonalds, Walmart is doing okay along with Carrefour. Apple ofcourse is completely crushing the phone market (and it's not just so they can employ a few factories of manual laborers) Car comapnies do just fine. I'm sure there is a ton of industrial espionage and technology transfer from government to local companies (hard to explain some advances otherwise.. ), but articles screaming about Chinese protectionism mostly stink of "bad sportsmanship". Some of these companies just blew it (Uber and Ebay) or they're social media platforms. The reality is that the government wants control over the media and what 99% of people hear and read. So platforms like Facebook or Google (with their vague moral obligation about not being "evil") make them very nervous. I talked to a Malaysia Chinese guy who supported the censorship and he explained it this way. In the third world (esp if you look at the middle east) there is a huge problem of misinformation and hysteria. People eat up all sorts of conspiracy theories and factoids gets spun out of control and can't get contained. In a country with lots of superstitions like China that's almost doubly worrying. So the government seems it in it's interest to control that kind feedback loop (obviously in part to keep itself in power... you could see some local protest about some minor issue blowing up into a national protest) So in general once some social media platform seems to get a critical mass it gets either brought down a peg or brought into the fold somehow (like Tencent buying League of Legend and some Android game) I'm not condoning their policies, but they have their own internal consistency that's a little more nuanced then just "fuck the foreigner companies"
  - walrus01 10y ago
    Car companies do fine in weird ways: Buick is a super luxury prestigious brand in mainland China because 100 years ago, some of the first cars imported were Buicks... In the USA it's seen as your grandfather's land yacht.
diego_moita 10y ago
> Uber felt it was treated fairly by a government > my guess is that if [...] had been more successful, China would have put a Mao-sized thumb on the scales. This is how it lost me, it shows how light he is on facts. I do agree with the 2 statements "China is protectionist" and "protectionism is bad". But I am cynical enough to see that everyone carefully pics which protectionism they complain about. As a Brazilian I am still waiting to hear Americans, Japanese and Europeans complaining about their own farming protectionism, at least as loudly as they complain about other countries.
- throwaway201607 10y ago
  I HATE American protectionism in farming. One such example is the ridiculous subsidies of corn that lead to obesity, feeding ruminants grain and even crappy cocacola! Other terrbile side-effects of our agrisubsidies include crap processed food, agricultural practices built on assumption of nearly free water leading to droughts, nutritional deficiency in produce etc etc.
  - SapphireSun 10y ago
    Other terrible side effects of our subsidies are a reliable food supply as we overproduce far beyond what's necessary which makes us nearly immune to supply shocks like pre-1930s america. Ever heard of famine in the united states in recent memory? Didn't think so. Know what else causes nutritional deficiency? Not eating. While there may be some problems with our current system, they are firmly in the "good problem to have" territory. Exporting food for free is a more complicated topic, on the imports side, protectionism is justified for critical functions. If we outsourced our food production, we could get it more cheaply (it's already cheap), but imagine if a supplier suddenly decides to cut us off? Food security is a national security priority moreso than typical military stuff like steel mills.
    - diego_moita 10y ago
      > protectionism is justified for critical functions Then don't complain about other countries' protectionism. They also have the right to decide what is critical to them, right?
noisy_boy 10y ago
China is a peculiar case. It has embraced parts of capitalism that ensure market growth. The huge domestic market coupled with aggressive stealing of IP to create cheapest-in-the-world knock-offs have fuelled its exports. However, having this selective breed of capitalism has allowed its leadership to sidestep aspects of American capitalism e.g. influence of corporations on leaders. This means that companies don't have the same lobbying power in influencing policy/laws/IP etc. So basically we have this wealthy nation with its leadership not generally obliged to listen to either market or its people. So they do what they want to do. Its like the skinny kid hit the gym, made a ton of money and is now back in the neighbourhood throwing its weight around.
- smallnamespace 10y ago
  > However, having this selective breed of capitalism has allowed its leadership to sidestep aspects of American capitalism e.g. influence of corporations on leaders This is not a surprise if you understand China's political culture and its long, long history. For literally thousands of years, political elites in China have understood that political power follows economic power, which is why the richest in China are generally Party members and high officials. When Deng Xiaoping said "let some people get rich first", he meant those with political connections. American politicians and citizens allowing corporate interests to slowly take over the political process is due to not understanding how history works.
  - serge2k 10y ago
    > which is why the richest in China are generally Party members and high officials. Wouldn't that be the case with pretty much any totalitarian regime? > American politicians and citizens allowing corporate interests to slowly take over the political process is due to not understanding how history works. I'll take the flawed lobbying system over the Chinese system any day.
    - smallnamespace 10y ago
      > Wouldn't that be the case with pretty much any totalitarian regime? No. There are plenty of totalitarian regimes where any actual wealth held outside of a tiny ruling clique is considered unacceptable. China's trick is that they 1) embraced de facto capitalism and 2) managed to spread the wealth amongst a relatively large Party base (as a % of the population) while still maintaining insider control. That's a very, very fine balancing act, and most authoritarian regimes can't manage to do it, leading to either failure to sustain economic growth (e.g. Russia, or North Korea) or complete loss of control to new economic elites. In fact, Xi's anti-corruption campaign may potentially destabilize the Party because it breaks the implicit contract that has kept the Party together for the last 3 decades (namely, support the Party, and we'll look at the other way on corruption).
throwaway201607 10y ago
Remember this, If you do not like the status quo in China, then stop supporting it. As American companies economically invaded other countries, much of the culture became the norm. If you think censorship, collusion, corruption, disparity et al are ok traits for a society, then by all means keep inviting them into the country to control more and more of American culture.
auggierose 10y ago
Making deals with someone who has an entirely different value system is dangerous, especially when there is no neutral institution to enforce those deals. Western companies doing business in China are lead by a mixture of braveness, greed and naiveness, I guess.
Nokinside 10y ago
Most successful nations today did protect their markets and relied on tight government coordination when they were doing catch-up after WWII: Japan, Korea, ,Taiwan, France, Germany, Finland, ... The question we should ask is how much is proper and beneficial. Asking China to play the same game as already developed nations is not fair or realistic.
danbruc 10y ago
I really dislike this tone of China acting fundamentally badly. It's their country, they can do whatever the heck they want. If they want a local replacement for everything already existing outside of Chine, so be it. If you just let established big players have all the cake, chances for success of local competitors become pretty slim. Stealing trade secrets if of course not okay, but that is more of a theoretical argument, the west probably has his fingers equally deep in the Chinese cookie jar. If you make agreements and China later unilaterally breaks them, that is of course also not okay. But investors don't seem to care, it's not that nobody knows what to expect, but the lure of huge profits seems to win again and again.
- ryanobjc 10y ago
  "stealing of trade secrets [...] is more of a theoretical argument" I just wanted to point out this pretty amazing sentence.
  - danbruc 10y ago
    What is so amazing about this sentence?
    - jgroch 10y ago
      in theory it's stealing something very very very abstwact?
      - danbruc 10y ago
        It is of course theft, my point was that I assume the west is also taking whatever they can get so that it would be hypocritical to blame China for doing it.
        6stringmerc 10y ago
        Eh, that's kind of rationalizing away the threat posed by China's habitual targeting of US military tech, specifically in aviation. I'll believe China has corrected its dirty sourcing ways when they build their own reliable Mach 2 Fighter Jet from scratch without reading Lockheed's homework first.
gist 10y ago
The "local knowledge" argument doesn't hold much water. The reason is any company entering China hires natives and people who in theory (and at the level they hire at) are quite capable of rivaling those who work for companies in that country.
teslaberry 10y ago
google IS the nsa and u.s. deep state. why would any competent super power allow google operate freely , if at all, in their country. look at europe. all of europe has crap internet entrepreneuriship and is totally and utterly infiltrated by usa/nsa search.
astazangasta 10y ago
This is horseshit nationalism, again. What Chinese companies have made huge inroads into the American tech world? Every time they do, some commentator (probably the same guy who wrote this article) will show up to shake a big stick at them and try to chase them off, with tales of impending Chinese takeover. The real story, there and here, is one of large corporations using whatever means they can, including their friends in local government, to increase their own power.
- pitaj 10y ago
  Money infiltrates politics because politics has power that normal money can't achieve. Remove that power from politics, and the money will leave as well.
eva1984 10y ago
The article is off-the-topic. It states clearly, Uber hasn't got to the state that Chinese government would put the thumb on the scale, but go straight and use Google's example to picture what would happen if Uber ever close to domination, in order to resell pieces of his book about Google's exit from China. He might be right. Chinese government is as shady as it has ever been. But since Uber hasn't ever got close to what Google has been in China(Google has been close to dominate the market back in 2009), and their completely different nature of business, Uber's failure in China resembles very little to what forces out Google. I won't go in deep analysis why Uber decided to make the move. But bear in mind, China has its own internet ecosystem, because the infamous Great Firewall, to the point, the government publish pieces that the 'internet' will keep functioning even US decides to cut China off, showcasing how 'secure' and isolated it is. When it comes to internet, I cannot remember what foreign services cannot be replaced by local counterparts. Besides, those local companies are very successful, Tencent and Alibaba are both 100B worth company, they both invest huge money in Didi. And when it comes to internet, China is pretty much catches up to U.S. in terms of technology. If the situation is reversed, would you ever believe Didi can compete with Uber here in U.S.? I don't think so. And for Uber, China is something good to have, but for Didi it is that they couldn't afford to lose, the determination to battle to the ground is different.
wangii 10y ago
I'd say Chinese government's position is well justified, given every presidential candidate in last 30 years competed to trash it. You want an enemy, you'll get one.
6stringmerc 10y ago
Thanks, Nixon.
darkhorn 10y ago
It is their country, they can do whatever they want. I think USA should do whatever it wants too, like blocking Chinese tech companies in the USA.
- nneonneo 10y ago
  The US doesn't need to - as the article indicates, most Chinese tech companies have no interest in operating outside of Asia. To give some concrete examples: WeChat (微信), which is entirely ubiquitous in China, has essentially zero market share in the US - parts of the app aren't even localized to English! Baidu is the biggest search engine in China, and it doesn't have an English version. Alibaba operates one of the world's largest online stores (like Amazon), but has no presence in the States. And so on. Western tech companies want in on the Chinese market, but by and large, the reverse is not true.
qiqing 10y ago
A few important segments that really seem to get buried in the rest of the text. "This is not to say that Chinese government regulation drove Uber’s deal with Didi, which was clobbering Uber in the ride-sharing market; in fact, Uber felt it was treated fairly by a government interested in transportation innovation. According to reports on the ground, Didi used its local knowledge to act more nimbly in satisfying Chinese customers. ... Google’s retreat came in 2010, so it’s fair to ask whether those regulatory issues still exist. ... To be fair, the American marketplace has not exactly been a fertile ground for Chinese internet companies hoping to break in. Though many of the really big players — Baidu, Alibaba, TenCent, WeChat — have moved on from clone-ish beginnings and actually come up with important innovations, none have made an impact here. But that’s due more to a lack of resolve than any regulatory barriers."
dr_faustus 10y ago
Don't kid yourself thinking that the US is above those tactics. They might use some other techniques but it is in many regards just as protectionist as China. One common theme is completely exaggerated fines leveled against foreign companies. Look at the banks: while doing very little to punish U.S. banks (if you take net transfers into account) who where without a doubt the main culprits in the sub-prime crisis and thereby causing a global financial crisis, the U.S. almost exclusively punished foreign banks - and with that also foreign tax payers - for wrong doings like dealings with countries the U.S. dislikes, etc.. Another striking example is the fines imposed in Volkswagen. While it certainly was immensely stupid to cheat on the emission test, the fines are completely over the top: $16b and counting. After every state and agency is through with VW, it might be $30b or more. At the same time, U.S. car companies that caused actual casualties with there shoddy engineering are left of the hook with a slap in the wrist. Some sources: http://www.forbes.com/sites/timworstall/2014/12/22/isnt-it-strange-that-the-us-gets-to-fine-alstom-a-french-company-for-bribery-not-in-the-us/#28903e6c2de3 http://www.forbes.com/sites/timworstall/2014/12/22/isnt-it-s... http://www.nytimes.com/2015/09/29/business/dealbook/volkswagen-faces-harsher-penalties-than-a-us-company-might.html http://www.nytimes.com/2015/09/29/business/dealbook/volkswag...
touristtam 10y ago
Weird that all those tech company didn't learn from the car industry trying really hard in the 90s to dominate the Chinese market.
drawkbox 10y ago
Protectionism and currency manipulation in a free trade setup will end badly. Every trade deal we do needs to address these issues with consequences. China joined the WTO in Oct '01 and full participation in '05, the US has suffered since then. Problem is sometimes our greed drives these deals over long-term futures. The time of selling out the whole country with non-protectionism for a country that does protectionism and currency manipulation is truly a catastrophic deal for trade partners futures.
idra 10y ago
Haven't noticed that anyone is talking about the fact that just a week ago, the Chinese government issued a press release about "legalizing" ride-sharing apps [1][2]. Article 21 of the new law, which should take effect this November, basically says that subsidizing the drivers would be illegal, effectively killing Uber's strategy. The Uber case is classic in China, governemnt using "laws and regulations" to kill foreign businesses. Didi's competitive advantage was just being Chinese, nothing else. Now that Uber has surrendered, I wonder if the regulations will actually be implemented. [1] http://news.xinhuanet.com/politics/2016-07/28/c_129186192.htm http://news.xinhuanet.com/politics/2016-07/28/c_129186192.ht... (Official press release in Chinese) [2] https://techcrunch.com/2016/07/28/china-issues-guidelines-to-legalize-ride-hailing-apps-like-uber-and-didi-chuxing/ https://techcrunch.com/2016/07/28/china-issues-guidelines-to... (Article in English)
foxwoods 10y ago
Encrypted communication would be the next game changer.

277 points by dwaxe 10y ago

paradite 10y ago

duplicate of this: https://news.ycombinator.com/item?id=12218211 https://news.ycombinator.com/item?id=12218211

dwaxe 10y ago
My bad, didn't see Steven himself posting it! Not sure why he used a different title than the one he chose for his own publication.

cronjobber 10y ago

Articles like these never fail to drive home just how much of a US patsy the EU has always been.

mtgx 10y ago
Indeed. And yet you keep seeing articles from NY Times, Bloomberg, and even Reuters, with an almost negative tone about how the EU basically wants to destroy American companies by putting some more regulations on them or daring to investigate them for anti-trust or tax avoidance. And here comes China that basically says from the start to all foreign companies: "You give us half, or you're out. Take it or leave it. And we still get to impose whatever regulations, official or unofficial, want, depending on our mood. We'll also turn a blind eye to local Chinese companies completely ripping off your technology. Sounds good?"
mywittyname 10y ago
Unlike the EU, China has the capability to build companies that could rival top US players. So it's unsurprising that China takes the uncompromising approach to foreign investment that they do. I'd love to see an American's reaction to a speech where Xi Jinping exclaims that he will ensure that all Americans start using Baidu as their search engine.
- cronjobber 10y ago
  Europeans had been promised and conditioned that their countries would give a shit about privacy. It would have seemed unlikely to European founders that they'd be allowed to run a blatant commercial spyware operation like Google or Facebook; and in fact I'd bet that they would have met fierce regulatory resistance... until Google and Facebook waltzed in from the US and surprise, nobody put up any resistance until the war was won. Yeah, sure, long after the war was lost, some EU regulatory theater. I actually bought a N900 back in the day. It was good. Nokia smartphones could have been a thing, not just because they were good, but they'd taken off just a few years later especially on privacy grounds. There's not nearly enough conspiracy theorizing about Elop blatantly Osborning Maemo...
  - cptskippy 10y ago
    Elop's actions as a whole seem so blatantly towards selling the company off and yet there has been very little scrutiny of them.
  - pitaj 10y ago
    > Europeans had been promised and conditioned that their countries would give a shit about privacy Do Europeans really care that much about privacy? As an outsider, I don't see much fighting for privacy coming from Europe. > blatant commercial spyware operation like Google or Facebook What kind of regulation do you think would stop this "spyware" as you call it? Are you really going to restrict an internet firm from collecting user information with the user's consent and then selling that information? What regulation would you do? Something like "right to be forgotten" is the absolute worst direction to go. When I first heard about it, I knew the regulators were idiots. That is patently opposed to free expression.
- serge2k 10y ago
  > I'd love to see an American's reaction to a speech where Xi Jinping exclaims that he will ensure that all Americans start using Baidu as their search engine. Why would anyone care?
  - 10y ago
xiaoma 10y ago
Europe is a has been. And it has been for at least 70 years. China is rising.
- jsn117 10y ago
  Europe is free, China is not.
  - xiaoma 10y ago
    China is competently run, Europe is not.
    - jazzyk 10y ago
      Oh, really? https://www.theguardian.com/business/2016/jun/16/chinas-debt-is-250-of-gdp-and-could-be-fatal-says-government-expert https://www.theguardian.com/business/2016/jun/16/chinas-debt...
      - xiaoma 10y ago
        Yes. http://data.worldbank.org/indicator/NY.GDP.MKTP.CD?end=2015&locations=XC-CN&start=1960&view=chart http://data.worldbank.org/indicator/NY.GDP.MKTP.CD?end=2015&...
        jazzyk 10y ago
        Showing total GDP, without accounting for population is disingenuous. Don't you think that GDP per capita would be a better indicator, perhaps? http://data.worldbank.org/indicator/NY.GDP.PCAP.PP.CD?end=2015&locations=XC-CN&start=1960&view=chart http://data.worldbank.org/indicator/NY.GDP.PCAP.PP.CD?end=20...
        xiaoma 10y ago
        China's outperformance of Europe is undeniable. In the chart you shared China was at barely 1/20 of Europe's level a generation ago and now is over 1/3. What will the comparison be in one more generation?
notfromhere 10y ago
What are you going to do when your national defense is wholly dependent on the U.S.?

deleted 10y ago

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Unbeliever69 10y ago

"Put simply, China likes locals to succeed over foreign companies, and will act accordingly." This is SO Un-American!

deleted 10y ago
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sunstone 10y ago

The West and China are playing a global chess game and have been for some time. An impoverished China was not in the West's interests and so they agreed to buy all kinds of lowish tech Chinese made goods. In return most jurisdictions enforced a balance of trade with China, with the exception of the US. On their end China insisted on joint ventures and technology transfer to the extent Western companies would comply. Western companies were reluctant to give up their best tech so China ended up with last generate tech which, still, was way better than it had. This was a status quo that benefited both sides enough that it worked well enough for 20 to 30 years. Now the stakes are getting higher. China wants to level up by buying foreign tech companies with, essentially, state capital and the West naturally doesn't see that to be in their interests and so they block those purchases. The West wants to enter China with their latest internet block busters and China doesn't see that in their interests and so they block that but, more often in a soft way. They open the door, allow foreign companies to enter and train locals in the technology and then slam the door when they gain traction. Both sides are well aware of the stakes and the situation what's evolving are the techniques and strategies of the competitors. It's a big boy's game for large nation states and if you're not that big you're likely to take some bruises. If you're a fan of raw capitalism though pull up a chair and a beer and watch the game.

skynetv2 10y ago
> China ended up with last generate tech we are way past that point. China has leap frogged pretty much everyone else in every aspect. It took China less than a year to build the worlds fastest supercomputer (unclassified) after US placed restrictions on related technology exports to China. China was building components for supercomputers over the past decade, they would show case a network, a small processor, cooling system etc individually. No one and I say again, NO ONE, expected they would build a full system at such a capability in such a short time.
- batbomb 10y ago
  Owning the fastest supercomputer in the world is mostly irrelevant these days, because the entire thing just gets partitioned into smaller chunks in actual use. It's just never in anyone's interest to run a job that utilizes all the resources. At the end of the day, most of these computers are just a pissing contest and are rarely cost effective, and are almost always a huge pain in the ass to use.

erikb 10y ago

I wish more countries would support their own brands as much as China.

cocotino 10y ago
Political correctness is the plague of our time.

merraksh 10y ago

According to reports on the ground, Didi used its local knowledge to act more nimbly in satisfying Chinese customers. But my guess is that if the American ride-sharing company had been more successful, China would have put a Mao-sized thumb on the scales. So Didi was actually better; it's a bit unfair to say that otherwise the game would have been rigged.

hyh1048576 10y ago
Didi seems to be better at e.g. customer service. For example, their support can be reached by phone, and Uber support can be only reached via Email. I'm sure people know, in China, call center operates way cheaper than in U.S. This and the fact that people are unwilling to use Email are some of the major sources of complaint on Uber I've heard about.
- MrBuddyCasino 10y ago
  If thats true, Uber was simply being incompetent here. We recently launched a shop on Tmall (Alibaba version of Amazon), and you usually hire a local agency to provide customer support for the chinese. 80% of the traffic is mobile, so they use SMS and phone calls a lot, emails much less than in the west. Also chat, they expect to be able to directly talk to someone via chat from the website. Not doing so means disregarding local habits, good luck with that.
steve-howard 10y ago
That's true, and I think this article was just using Uber as a jumping-off point to talk about doing business in China. I worked for a company not long ago that did business there, and the hoops they had to jump through were enormous.
amasad 10y ago
Yup, this is poor writing: "Y is true because had X been true then Y would follow"

teawithcarl 10y ago

It's actually worse than described in this article. XiJinPing is beyond ruthless, law is meaningless. Even this under-describes the reality.

LiweiZ 10y ago
Your comment should be the foundation for discussion about China nowadays.

hyh1048576 10y ago

> As late as this past June, Uber was predicting it would pass its rival within a year. This is simply <del>not true</del> (edit: not going to happen). I'm a fan of Uber, but using Uber is kinda like a exotic thing to do (while Didi is more common). Uber can be only used in major cities, on the other hand Didi can be used almost anywhere. Didi simply expand faster in China. (Uber is available in less than 20 Chinese cities while Didi appears in hundreds.) Also I don't view the merge of Uber China and Didi as a failure on Uber's side. It's more or less a peace treaty or truce (edit: between Uber per se and Didi, yes I know Uber China was merged). Uber-like service is simply too cheap in China for a long time, (I Uber to work for less than $2 for example), and both side cannot hold it any more. It's as simple as that. (Before the Didi-Uber merge, there's a similar merge of Didi and it's major competitor Kuaidi, thus the full name Didi-Kuaidi, in which both side are Chinese companies and it's just that after long competition investors decided to facilitate a merge. This merge makes Uber the second largest, before that they were the 3rd.) The story between Google and Baidu is a whole different one. First search engine as a gateway to informations is viewed as vital by the Chinese government and government really worked on Baidu's side.

erdevs 10y ago
> > > As late as this past June, Uber was predicting it would pass its rival within a year. > This is simply not true. Yes it is true. Kalanick's investor updates from 24-12 months ago were all gung ho on China and how Uber was seeing as much or more success there as any Western country ever had. Their explicit goal was to outcompete Didi and become the #1 on-demand service in China (on-demand generally... not just for transportation). Their timeline for winning majority market share was 12-24 months out, and that is how they justified the extremely, extremely aggressive cash burn in the market. (Nobody burns $1B+/yr in cash gunning to grow slowly into second place.) Believe me when I say that several billion dollars of raised capital and $10B+ of Uber's imputed valuation was attributed to their potential in China, their growth there, and their plan to dominate in the next 12-24 months. What evidence have you that this is "simply not true." Some of these statements to investors have become public knowledge, which you'll see with a simple google search. Just one of many articles and quotes from this timeframe outlining Uber's explicit goal of becoming dominant in marketshare in China within a year: http://www.digitaltrends.com/business/uber-beat-didi/ http://www.digitaltrends.com/business/uber-beat-didi/ Note as well how cocky and aggressive Uber was here in their marketing, public statements, etc. > Also I don't view the merge of Uber China and Didi as a failure on Uber's side. It was absolutely a failure. Uber's goal was to beat Didi and dominate in China, as is their goal in every single market they enter. Did they succeed or fail in that goal? Uber did a good job salvaging value here in having its Chinese operation acquired by Didi. But make no mistake, it was a failure and this falls far short of both their intentions and their promises to investors. Also, this was forced on Uber by investors. People lost faith that Uber could win in China, and rightfully so. The cash burn was staggering and there was no end in sight and no clear path to actual victory, despite the previously lofty updates and promises. > It's more or less a peace treaty or truce No. A peace treaty or truce means each side remains independent but they agree to stop warring with each other. This is an outright purchase. Uber lost the war and it's best option was to salvage value in Uber China by merging into a minority, small position (only 18%) within Didi's business. > Uber-like service is simply too cheap in China for a long time, (I Uber to work for less than $2 for example), and both side cannot hold it any more. It's as simple as that. Yes. It was a war of attrition. And Uber lost the war. As simple as that. That's why it makes no sense that you're framing this as somehow just a "peace treaty". > Before the Didi-Uber merge, there's a similar merge of Didi and it's major competitor Kuaidi.. Yes, this was a brilliant move on Didi's (and Kuaidi's) part. On top of this, Didi struck a partnership with Lyft. In terms of military strategy, Didi was encircling Uber on all sides. Instead of having to fight a war on two fronts with Kuaidi and Uber, they used Kuaidi and Lyft as springboards. This was absolutely brilliant and bold strategy and it's an approach few start-ups could pull off or would even attempt trying. M&A and mergers are extremely complex for start-ups to tackle and this was brilliant strategy. 2 years ago, Uber was playing the role of the big dog and pressuring to buy Didi. After Didi's great growth and very effective strategy over the past two years, the roles were totally reversed and Didi bought Uber's China operations for what was ultimately a pittance. 18%, which will be further diluted over time. > The story between Google and Baidu is a whole different one. First search engine as a gateway to informations is viewed as vital by the Chinese government and government really worked on Baidu's side. I think the governemnt helped Didi quite a bit too. As did Tencent.

lambdasquirrel 10y ago

> But my guess is that if the American ride-sharing company had been more successful, China would have put a Mao-sized thumb on the scales. Anyone remember when GM had to be bailed out, but at the time, they were actually generating profits in China and it was one of their few bright spots? Ford likewise. I just don't buy this.

Buge 10y ago
Well some members of my family own a factory making car parts. Many parts ship to Ford plants in China. China recently created a new rule saying Ford cannot buy parts from the US. So we either had to build a plant in China, or stop shipping to Ford. We stopped shipping to Ford. They were our largest customer.
- rahimnathwani 10y ago
  Wait, what? Can you point us to the rule? It sounds like the WTO might be interested.

notliketherest 10y ago

Not to mention China's state sponsored thefts of American IP (esp tech), which is no doubt being used in Chinese carbon copy corporations protected behind the great firewall.

anonymousDan 10y ago
I'm probably opening myself to accusations of whataboutery but it's not like America has never partaken in state sponsored industrial espionage: http://www.washingtonsblog.com/2013/10/nsa-busted-conducting-industrial-espionage-in-france-mexico-brazil-and-other-countries.html http://www.washingtonsblog.com/2013/10/nsa-busted-conducting...

bduerst 10y ago

Are there any cast studies on multinational companies that were successful in China and outlined why? Companies like Danone?

optforfon 10y ago
Sure. There are tons. Starbucks is everywhere, KFC, McDonalds, Walmart is doing okay along with Carrefour. Apple ofcourse is completely crushing the phone market (and it's not just so they can employ a few factories of manual laborers) Car comapnies do just fine. I'm sure there is a ton of industrial espionage and technology transfer from government to local companies (hard to explain some advances otherwise.. ), but articles screaming about Chinese protectionism mostly stink of "bad sportsmanship". Some of these companies just blew it (Uber and Ebay) or they're social media platforms. The reality is that the government wants control over the media and what 99% of people hear and read. So platforms like Facebook or Google (with their vague moral obligation about not being "evil") make them very nervous. I talked to a Malaysia Chinese guy who supported the censorship and he explained it this way. In the third world (esp if you look at the middle east) there is a huge problem of misinformation and hysteria. People eat up all sorts of conspiracy theories and factoids gets spun out of control and can't get contained. In a country with lots of superstitions like China that's almost doubly worrying. So the government seems it in it's interest to control that kind feedback loop (obviously in part to keep itself in power... you could see some local protest about some minor issue blowing up into a national protest) So in general once some social media platform seems to get a critical mass it gets either brought down a peg or brought into the fold somehow (like Tencent buying League of Legend and some Android game) I'm not condoning their policies, but they have their own internal consistency that's a little more nuanced then just "fuck the foreigner companies"
- walrus01 10y ago
  Car companies do fine in weird ways: Buick is a super luxury prestigious brand in mainland China because 100 years ago, some of the first cars imported were Buicks... In the USA it's seen as your grandfather's land yacht.

diego_moita 10y ago

> Uber felt it was treated fairly by a government > my guess is that if [...] had been more successful, China would have put a Mao-sized thumb on the scales. This is how it lost me, it shows how light he is on facts. I do agree with the 2 statements "China is protectionist" and "protectionism is bad". But I am cynical enough to see that everyone carefully pics which protectionism they complain about. As a Brazilian I am still waiting to hear Americans, Japanese and Europeans complaining about their own farming protectionism, at least as loudly as they complain about other countries.

throwaway201607 10y ago
I HATE American protectionism in farming. One such example is the ridiculous subsidies of corn that lead to obesity, feeding ruminants grain and even crappy cocacola! Other terrbile side-effects of our agrisubsidies include crap processed food, agricultural practices built on assumption of nearly free water leading to droughts, nutritional deficiency in produce etc etc.
- SapphireSun 10y ago
  Other terrible side effects of our subsidies are a reliable food supply as we overproduce far beyond what's necessary which makes us nearly immune to supply shocks like pre-1930s america. Ever heard of famine in the united states in recent memory? Didn't think so. Know what else causes nutritional deficiency? Not eating. While there may be some problems with our current system, they are firmly in the "good problem to have" territory. Exporting food for free is a more complicated topic, on the imports side, protectionism is justified for critical functions. If we outsourced our food production, we could get it more cheaply (it's already cheap), but imagine if a supplier suddenly decides to cut us off? Food security is a national security priority moreso than typical military stuff like steel mills.
  - diego_moita 10y ago
    > protectionism is justified for critical functions Then don't complain about other countries' protectionism. They also have the right to decide what is critical to them, right?

noisy_boy 10y ago

China is a peculiar case. It has embraced parts of capitalism that ensure market growth. The huge domestic market coupled with aggressive stealing of IP to create cheapest-in-the-world knock-offs have fuelled its exports. However, having this selective breed of capitalism has allowed its leadership to sidestep aspects of American capitalism e.g. influence of corporations on leaders. This means that companies don't have the same lobbying power in influencing policy/laws/IP etc. So basically we have this wealthy nation with its leadership not generally obliged to listen to either market or its people. So they do what they want to do. Its like the skinny kid hit the gym, made a ton of money and is now back in the neighbourhood throwing its weight around.

smallnamespace 10y ago
> However, having this selective breed of capitalism has allowed its leadership to sidestep aspects of American capitalism e.g. influence of corporations on leaders This is not a surprise if you understand China's political culture and its long, long history. For literally thousands of years, political elites in China have understood that political power follows economic power, which is why the richest in China are generally Party members and high officials. When Deng Xiaoping said "let some people get rich first", he meant those with political connections. American politicians and citizens allowing corporate interests to slowly take over the political process is due to not understanding how history works.
- serge2k 10y ago
  > which is why the richest in China are generally Party members and high officials. Wouldn't that be the case with pretty much any totalitarian regime? > American politicians and citizens allowing corporate interests to slowly take over the political process is due to not understanding how history works. I'll take the flawed lobbying system over the Chinese system any day.
  - smallnamespace 10y ago
    > Wouldn't that be the case with pretty much any totalitarian regime? No. There are plenty of totalitarian regimes where any actual wealth held outside of a tiny ruling clique is considered unacceptable. China's trick is that they 1) embraced de facto capitalism and 2) managed to spread the wealth amongst a relatively large Party base (as a % of the population) while still maintaining insider control. That's a very, very fine balancing act, and most authoritarian regimes can't manage to do it, leading to either failure to sustain economic growth (e.g. Russia, or North Korea) or complete loss of control to new economic elites. In fact, Xi's anti-corruption campaign may potentially destabilize the Party because it breaks the implicit contract that has kept the Party together for the last 3 decades (namely, support the Party, and we'll look at the other way on corruption).

throwaway201607 10y ago

Remember this, If you do not like the status quo in China, then stop supporting it. As American companies economically invaded other countries, much of the culture became the norm. If you think censorship, collusion, corruption, disparity et al are ok traits for a society, then by all means keep inviting them into the country to control more and more of American culture.

auggierose 10y ago

Making deals with someone who has an entirely different value system is dangerous, especially when there is no neutral institution to enforce those deals. Western companies doing business in China are lead by a mixture of braveness, greed and naiveness, I guess.

Nokinside 10y ago

Most successful nations today did protect their markets and relied on tight government coordination when they were doing catch-up after WWII: Japan, Korea, ,Taiwan, France, Germany, Finland, ... The question we should ask is how much is proper and beneficial. Asking China to play the same game as already developed nations is not fair or realistic.

danbruc 10y ago

I really dislike this tone of China acting fundamentally badly. It's their country, they can do whatever the heck they want. If they want a local replacement for everything already existing outside of Chine, so be it. If you just let established big players have all the cake, chances for success of local competitors become pretty slim. Stealing trade secrets if of course not okay, but that is more of a theoretical argument, the west probably has his fingers equally deep in the Chinese cookie jar. If you make agreements and China later unilaterally breaks them, that is of course also not okay. But investors don't seem to care, it's not that nobody knows what to expect, but the lure of huge profits seems to win again and again.

ryanobjc 10y ago
"stealing of trade secrets [...] is more of a theoretical argument" I just wanted to point out this pretty amazing sentence.
- danbruc 10y ago
  What is so amazing about this sentence?
  - jgroch 10y ago
    in theory it's stealing something very very very abstwact?
    - danbruc 10y ago
      It is of course theft, my point was that I assume the west is also taking whatever they can get so that it would be hypocritical to blame China for doing it.
      - 6stringmerc 10y ago
        Eh, that's kind of rationalizing away the threat posed by China's habitual targeting of US military tech, specifically in aviation. I'll believe China has corrected its dirty sourcing ways when they build their own reliable Mach 2 Fighter Jet from scratch without reading Lockheed's homework first.

gist 10y ago

The "local knowledge" argument doesn't hold much water. The reason is any company entering China hires natives and people who in theory (and at the level they hire at) are quite capable of rivaling those who work for companies in that country.

teslaberry 10y ago

google IS the nsa and u.s. deep state. why would any competent super power allow google operate freely , if at all, in their country. look at europe. all of europe has crap internet entrepreneuriship and is totally and utterly infiltrated by usa/nsa search.

astazangasta 10y ago

This is horseshit nationalism, again. What Chinese companies have made huge inroads into the American tech world? Every time they do, some commentator (probably the same guy who wrote this article) will show up to shake a big stick at them and try to chase them off, with tales of impending Chinese takeover. The real story, there and here, is one of large corporations using whatever means they can, including their friends in local government, to increase their own power.

pitaj 10y ago
Money infiltrates politics because politics has power that normal money can't achieve. Remove that power from politics, and the money will leave as well.

eva1984 10y ago

The article is off-the-topic. It states clearly, Uber hasn't got to the state that Chinese government would put the thumb on the scale, but go straight and use Google's example to picture what would happen if Uber ever close to domination, in order to resell pieces of his book about Google's exit from China. He might be right. Chinese government is as shady as it has ever been. But since Uber hasn't ever got close to what Google has been in China(Google has been close to dominate the market back in 2009), and their completely different nature of business, Uber's failure in China resembles very little to what forces out Google. I won't go in deep analysis why Uber decided to make the move. But bear in mind, China has its own internet ecosystem, because the infamous Great Firewall, to the point, the government publish pieces that the 'internet' will keep functioning even US decides to cut China off, showcasing how 'secure' and isolated it is. When it comes to internet, I cannot remember what foreign services cannot be replaced by local counterparts. Besides, those local companies are very successful, Tencent and Alibaba are both 100B worth company, they both invest huge money in Didi. And when it comes to internet, China is pretty much catches up to U.S. in terms of technology. If the situation is reversed, would you ever believe Didi can compete with Uber here in U.S.? I don't think so. And for Uber, China is something good to have, but for Didi it is that they couldn't afford to lose, the determination to battle to the ground is different.

wangii 10y ago

I'd say Chinese government's position is well justified, given every presidential candidate in last 30 years competed to trash it. You want an enemy, you'll get one.

6stringmerc 10y ago

Thanks, Nixon.

darkhorn 10y ago

It is their country, they can do whatever they want. I think USA should do whatever it wants too, like blocking Chinese tech companies in the USA.

nneonneo 10y ago
The US doesn't need to - as the article indicates, most Chinese tech companies have no interest in operating outside of Asia. To give some concrete examples: WeChat (微信), which is entirely ubiquitous in China, has essentially zero market share in the US - parts of the app aren't even localized to English! Baidu is the biggest search engine in China, and it doesn't have an English version. Alibaba operates one of the world's largest online stores (like Amazon), but has no presence in the States. And so on. Western tech companies want in on the Chinese market, but by and large, the reverse is not true.

qiqing 10y ago

A few important segments that really seem to get buried in the rest of the text. "This is not to say that Chinese government regulation drove Uber’s deal with Didi, which was clobbering Uber in the ride-sharing market; in fact, Uber felt it was treated fairly by a government interested in transportation innovation. According to reports on the ground, Didi used its local knowledge to act more nimbly in satisfying Chinese customers. ... Google’s retreat came in 2010, so it’s fair to ask whether those regulatory issues still exist. ... To be fair, the American marketplace has not exactly been a fertile ground for Chinese internet companies hoping to break in. Though many of the really big players — Baidu, Alibaba, TenCent, WeChat — have moved on from clone-ish beginnings and actually come up with important innovations, none have made an impact here. But that’s due more to a lack of resolve than any regulatory barriers."

dr_faustus 10y ago

Don't kid yourself thinking that the US is above those tactics. They might use some other techniques but it is in many regards just as protectionist as China. One common theme is completely exaggerated fines leveled against foreign companies. Look at the banks: while doing very little to punish U.S. banks (if you take net transfers into account) who where without a doubt the main culprits in the sub-prime crisis and thereby causing a global financial crisis, the U.S. almost exclusively punished foreign banks - and with that also foreign tax payers - for wrong doings like dealings with countries the U.S. dislikes, etc.. Another striking example is the fines imposed in Volkswagen. While it certainly was immensely stupid to cheat on the emission test, the fines are completely over the top: $16b and counting. After every state and agency is through with VW, it might be $30b or more. At the same time, U.S. car companies that caused actual casualties with there shoddy engineering are left of the hook with a slap in the wrist. Some sources: http://www.forbes.com/sites/timworstall/2014/12/22/isnt-it-strange-that-the-us-gets-to-fine-alstom-a-french-company-for-bribery-not-in-the-us/#28903e6c2de3 http://www.forbes.com/sites/timworstall/2014/12/22/isnt-it-s... http://www.nytimes.com/2015/09/29/business/dealbook/volkswagen-faces-harsher-penalties-than-a-us-company-might.html http://www.nytimes.com/2015/09/29/business/dealbook/volkswag...

touristtam 10y ago

Weird that all those tech company didn't learn from the car industry trying really hard in the 90s to dominate the Chinese market.

drawkbox 10y ago

Protectionism and currency manipulation in a free trade setup will end badly. Every trade deal we do needs to address these issues with consequences. China joined the WTO in Oct '01 and full participation in '05, the US has suffered since then. Problem is sometimes our greed drives these deals over long-term futures. The time of selling out the whole country with non-protectionism for a country that does protectionism and currency manipulation is truly a catastrophic deal for trade partners futures.

idra 10y ago

Haven't noticed that anyone is talking about the fact that just a week ago, the Chinese government issued a press release about "legalizing" ride-sharing apps [1][2]. Article 21 of the new law, which should take effect this November, basically says that subsidizing the drivers would be illegal, effectively killing Uber's strategy. The Uber case is classic in China, governemnt using "laws and regulations" to kill foreign businesses. Didi's competitive advantage was just being Chinese, nothing else. Now that Uber has surrendered, I wonder if the regulations will actually be implemented. [1] http://news.xinhuanet.com/politics/2016-07/28/c_129186192.htm http://news.xinhuanet.com/politics/2016-07/28/c_129186192.ht... (Official press release in Chinese) [2] https://techcrunch.com/2016/07/28/china-issues-guidelines-to-legalize-ride-hailing-apps-like-uber-and-didi-chuxing/ https://techcrunch.com/2016/07/28/china-issues-guidelines-to... (Article in English)

foxwoods 10y ago

Encrypted communication would be the next game changer.