The China market for its foreign investors

China is not a good market to put your money. This is about what a Shanghai-based foreign business owner, blogging as MyLaowai, said in a post at his China-bashing blog.

I’ve read quite a few China blogs, and his is one of the most personally vicious, so negative about his host country and its people, whining, chastising, satirizing, and complaining all the time. I must say reading his posts is a very depressive experience. (But, his and guests’ posts make very good jokes, though, if you read them that way.) I can hardly associate such darkness and gloom in attitudes with a typical can-do businessman.

MyLaowai’s style of China-bashing is relentless. He bashes everything about and never has a problem with insulting and offending the country and its people. For example, he makes fun of Chinese-English the Chinese people often use; and “debunks” everything the Chinese like, e.g. the noises Chinese New Year’s celebration fireworks make.

MyLaowai’s China-market claim is dubious. My common sense tells me it’s not true.

As is known, China is a developing country, which means that it has a long way to go before it can match the developed ones in the West in terms of market maturity. Though people like MyLaowai rightly have loads to complain about, this should not stand in the way for other investors who want presence in China. After much complaining, MyLaowais must get down to work to solve or shun problems they are complaining about. If they don’t, they might fail in a market of this size:

China, which excludes Hong Kong, Macau and Taiwan, had an inbound FDI flow of US$108 billion in 2008 and had the world’s third largest economy (and according to the latest statistics, the second largest). In 2009, the country exported US$1.2 trillion worth of goods (Office machines & data processing equipment ($134.5 billion), Telecommunications equipment (123.6), Electrical machinery (101.7), Apparel & clothing (95.4), Miscellaneous manufactures (55.5)) and imported US$1.01 trillion (Electrical machinery ($174.8 billion), Petroleum & related products (84.1), Professional & scientific instruments (48.6), Metalliferous ores and scrap (44.0), Office machines & data processing equipment (40.7)).

Building a “harmonious” society is a comprehensive program of the Chinese government. Looking at it historically, nothing is new about this concept. It’s just another slogan word that represents a natural addition to China’s national strategic aims it set more than three decades ago – to make China into a country of Wealth, Strength, Democracy, and Ethics. Though it’s true that China is a country far from being “harmonious”, at least the country is making great progress towards her goals.

China is a country that had increased the life expectancy at birth of her people from an average of 35 years in 1949 to 70.4 years for men and 73.7 years for women in 2004; grown its gross national product to US$2.6 trillion in 2006; and sent her people aboard her own spaceships into the outer space. China’s achievements represented by the three examples are extremely laudable in Human history, especially considering the country’s vast land and huge population and the short time in which the achievements had been made.

For the market prospering in such a country, investors should consider joining it instead of avoiding it, as their business dictates.

However, from an individual investor’s point of view, it’s up to him or her how the operations are run. It’s their business. China’s market welcomes successful companies and eliminates losing underachievers.

Running businesses in China and the rest of the world carries risks associated with management/administration, thefts, labor disputes, legal and judicial problems, and consumer preference (MyLaowai’s grievances). If managed badly,  these risks might lead to disasters. This is what running businesses is about, isn’t it?

Contrary to MyLaowai’s recommendation, my idea is that if you are an ambitious investor, are sure that you have the products and/or services the local Chinese consumers can use, and you are well prepared for a market new to you, come here, because the market here is for you. But, before and after you set up shop here, bear these in mind: don’t try to fight local people and their ways of getting things done; and go about things within the Law and Government Regulations.

17 thoughts on “The China market for its foreign investors”

  1. Good work, well done. A very patriotic post that says exactly what the Dear Leaders want you to say, and does not address a single issue.

    Again, well done. Congratulations.

    Your $0.50 cheque is in the mail.

    1. I’ve never been ashamed of and very happy about saying things I want to say. So I won’t feel bad about your “patriotic post” claim.

      It’s good you raised the “single issue”. I did address single issues, in comments to your post. You decided to agree to disagree with me.

      Let’s be more specific.

      Regarding your missing inventory and assets, who stole them at when, in where and how? (A crime or management blunder?)

      About goods held up at the ports, what type of goods were held there? (Garbage imported from your home?)

      And about petitioners at your doors, what was the BONE they went to pick with you?(It’s you who owed them something?)

      Your answers will help address these single issues.

      Without further information about your issues, nothing meaningful can be concluded from your verbal claims. Talking about verbal claims, you should present your case with supporting evidence. Don’t generalize. Be specific.

      Finally, I would be a very bad wumaodang if I was one. And I would only settle for much higher rates for my posts.

      1. MyLaowai’s China-market claim is dubious. My common sense tells me it’s not true.
        My experience as a foreigner in China is that there is a lot of truth in that claim. My experience as a German in his home country is that there are smaller Chinese investors here expect much of the same treatment here, too – when their rights are violated, they keep their heads low and don’t expect anything better. I’ve been of some help in such situations here twice, and was surprised how surprised they were to discover the rule of law. Any rights stemming from it, in many cases, only need to be claimed here.
        And I’m hopeful that such positive experience may help to get a more positive pattern of doing business across.
        But I wouldn’t invest more than I’m prepared to lose in China myself – not because I distrust my own skills, but because there is usually no level playing field there. It’s mostly power and close relation with power which defines the rules.

        Regarding your missing inventory and assets, who stole them at when, in where and how? (A crime or management blunder?)
        Sorry, that was a weak one, Guohua, and I believe that you know it yourself. Asking for details there would amount to abandoning anonymity.

        1. By “dubious”, I mean that his claims are not supported by evidence, which makes his claims meaningless.

          MyLaowai’s claims:

          – They will be stealing from you, and I don’t just mean paperclips. Your inventory will be sold out the back door, and you’ll never even know it. Your assets will be sold out the front door, but you’ll never see it go.

          Of course, this claim can be true. However, anyone can understand it in a way as how MyLaowai wants the reader to understand it.

          But my question is: If he never knows the things go missing, how does he know they exist at his premises in the first place? (His administration and control systems are so bad that he cannot detect any missing items? If he has another boss above him, I suggest he sack MyLaowai.)”

          – Your customers will be diverted towards local competitors, your orders will suffer the same fate.

          My two cents: If his customers and orders can be diverted so easily, I suggest he ask himself why it happens. Is it because his products and services can be easily substituted by those of others? If yes, he is in a very competitive market sector (this is competition), or his offerings are not good enough to retain his customers (his business is uncompetitive).

          – Your suppliers will not deliver what you want, when you want, or how you want, but they will deliver your orders to the parallel company your workers have set up.

          My two cents: If this happens, I’m sure MyLaowai must be struggling to run his business: he has to fight on all fronts. He not only has to suffer losses caused by his employees, but also have to put up with his suppliers! A very funny question: why are his suppliers not afraid of losing MyLaowai as a client/customer and his employees not afraid of losing their jobs?


          Now to the rule of law and level playing ground.

          I don’t deny that by western standards it needs better rule of law and a more level playing ground. But China is a multi-trillion dollar market where so many big and small, foreign and domestic businesses propser. If MyLaowai’s business is struggling or fails, it is his own problem or can be a losing business or failure in a business sense, but which he attributes to lack of rule of law and of a level playing ground. Only he knows what’s happened or happening.


          I don’t know whether the missing items were a result of a crime or management blunder or something else. Only MyLaowai of us three knows.

          One of his problems is he despises the country and its people. It’s no wonder he’s “hated” there in Shanghai.

          We have a saying that 强龙不压地头蛇, which I think is for MyLaowai. It means that “a powerful dragon cannot crush a snake in its old haunts”. So, if MyLaowai chooses to fight locals, he will lose.

          It doesn’t take real names and real places to present his case. But I do understand his anonymity is important for him because he knows he’s hated by his Chinese employees, banks, custom officials, partners, and suppliers. For him lost anonymity means PR diasters and maybe closures.

  2. JR, here is a joke that illustrates my insistence on asking for more evidence. If you read it through, you will understand the possible absurdity of MyLaowai’s claims.




    亲爱的你来吧,你第一眼看到我,就会很满足!—-不想再看第二 眼

  3. 我闲遐时研究中国古代史,尤其是清史
    Hehe – if only they did!
    But the stuff about an ignorant know-it-all doesn’t apply here. I believe that you don’t know a thing about foreign investors in China. I know several of them who wanted to fire a person with good reason – the economic commission decided against it ever time, if no other level of jurisdiction blocked the foreign side successfully before – and the foreigners struggled against a lot of people with “hurt feelings” who did everything to outdo the previous to-be-sacked candidate. Fortunately, my working environment was somewhat more harmonious, but I have first-hand experience with the matters Mylaowai is pointing out. And basically, I believe his point is legitimate.
    It’s laudable that you defend your country’s image. But I believe that you need to know those corners of your country’s economy much better before you can make such a case convincingly. Nobody needs to know every detail about his own place – but when he comes across some information contrary to his own picture, he shouldn’t resort to knee-jerk denial without inside knowlege of his own.

    I do understand his anonymity is important for him because he knows he’s hated by his Chinese employees, banks, custom officials, partners, and suppliers. For him lost anonymity means PR diasters and maybe closures.
    Too many conclusions without prior evidence, Guohua. How can you know if he’s hated or not, successful or not? Just because he sounds off about the things he hates?

    I’m feeling tempted to link to a blog which would suggest that the blogger really hates his stay in China (and where I’d wonder myself why he’s hanging on). But is too entertaining for me to think that the blogger hates his host country.

    1. I came across this in my reading “书不尽言,言不尽意。” (another very old line under the sun, but completely new to me) It can be roughly translated as “You cannot write down everything you want to say; and you cannot say everything you mean.” It’s about the limitations of writing and speaking.

      For my country, 我是恨铁不成钢 (hard to translate. literally, “I’m angry about iron unable to become steel”. it’s about expectation. what I mean by it is that I want China better, but I find that it’s no better, which therefore makes me feel sort of angry.

      Maybe I’m not defending China’s image. I’m just counerbalancing MyLaowai’s post so that a fuller view of China can be presented.

      About MyLaowai’s being hated and other claims of mine about him, I drew the conclusions from his various posts, including “A Word of Advice”.

      I agree with you that his posts are entertaining, for example, in the sense that “兄弟,最近有什么不开心的事情,说出来让大家开心一下”.

      finally, you must have missed my point in posting the joke. Again, 书不尽言,言不尽意. what i mean is if he gives more information, the claims can be totally different.

      E.g.: 走到哪里都拎着笔记本———————是记录冷饮销售量的笔记本

    1. Thanks! I’ll try to order this book. Last time, my Encyclepedia Britanica disk had to be shipped to an American address and then to my Beijing address via a friend in the U.S. because Amazon did not sell software to China. Still wondering why. Hope my luck is better this time.

  4. Here’s a thought for you, Guohua (and anyone else reading this):

    A person is not the place s/he lives. It’s actually possible for a person to loathe and despise nearly everything about the place s/he lives, whilst still loving nearly everything about his or her own life.

    Think about that.

    1. As I said to JR, 书不尽言,言不尽意.

      It then follows that your life is kind of detached from the place you live, or well protected against it. For example, you won’t leave the comfort zone of hanging around with other rich expats in Shanghai and remain outside of the local mainstream community. If I were you, I’d learn the language, leave the comfort zone for a while, and learn to appreciate something local.

    2. Which then begs the question- why on Earth would they live in that place?

      When I don’t like the place I’m living- I up and leave. I moved to Shanghai, and I’m fairly happy here, compared to any of my previous domiciles. Why stay?

      And, furthermore, why hate? Where one man sees heaven, another sees hell- and only thinking makes it so…

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