Those seers who predicted America’s infatuation with China would backfire are looking awfully smart these days.
As Business Week reports today,
Nearly a decade after China’s entry into the World Trade Organization, many foreign companies say the warm reception they once received has turned frosty. While China can still be highly profitable, some question how long that will last as Beijing changes the rules to give a lift to its domestic companies, especially state-owned enterprises.
The piece goes on to quote government officials and others who share several anecdotes suggesting China is no longer a “level playing field.”
News flash: It never was a level playing field. When the laowai (foreigners) showed up, they were “partnered” with Chinese enterprises, usually failing, government-owned or -backed businesses with out-of-date equipment and no management prowess. We got what we wanted (entree into the world’s most populous, and arguably, cheapest, place to manufacture), and so did the locals (massive investment, access to Western business methods, and most important, customers).
But for those critics who counseled against the rush, recent events are making them look more and more prescient. Like a novice bodybuilder on steroids, given its new muscles, China wasting no time in flexing them, whether it be in currency markets, its ever-changing tax laws, its military buildup, its bull-snorts over mining the moon’s minerals, and so on.
And given China’s eons-long history of opening the door to outsiders only to slam it shut again, in hindsight, should we be at all surprised?