When It Comes To China, Google's Experience Still Says It All (backchannel.com) 112
Uber's defeat by its local competitor in China was the latest of a string of such cases, and Google's experience trying to establish itself there is illustrative of the challenges facing all American tech companies that aspire to dominate in that market, writes reader mirandakatz. Steven Levy writes at Backchannel:Perhaps because its market share never rose high enough, Uber did not experience the brunt of China's regulation. Still, who's to say what would have happened if Uber had managed to outperform Didi? If Uber's market share topped fifty percent, would the government have sat by as a neutral observer? Would the Uber app start experiencing slowdowns? Would its drivers be stopped? Would airports welcome Didi cars and not Uber? My bet is that, mixed with disappointment at not winning the country, Uber executives might be feeling a bit relieved that such worries are now off the table. As it is, Uber has become one more casualty in China's other wall, a towering fortress of restrictions, regulations and unfair play that keeps down American internet companies.
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Just because one of the founders is Canadian doesn't make it a Canadian company. They've been operating their business out of San Francisco from the start, and the founders have been part of previous SF-based businesses. Now there are surely business entities registered in countries all over the world so that Uber can operate there, and the service has definitely been available in parts of Canada early on.
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As a Canadian, I have to apologize for parent AC's comment.
I'm sorry.
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I'm sorry.
You really are Canadian!
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He's sorry aye.
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He's a Canadian not a sailor.
It's, "He's sorry, eh"
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Google... you have failed me for the last time.
You told me it was spelled "aye".
Oh wait... it was Yahoo Answers... no wonder Verizon bought them!
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Of course, in Canada, Uber claims they are operating out of Europe, so cities can't drag them into court.
reciprocity (Score:5, Insightful)
If US companies can't operate under fair rules in China, should Chinese companies be permitted to operate in the US without restrictions?
We can still trade, but do we necessarily have to allow service oriented businesses operate on each other's soil?
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Re:reciprocity (Score:5, Funny)
Allowing over a billion Chinese workers willing to earn far less to compete directly with higher paid Western workers sounds good to me. Every company out there would rather pay their employees well, than earn a greater profit through reduced payroll expenses, and every consumer would rather pay 3 times more for the same product because it is made in their home country.
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I would say yes. Having an open, unrestricted economy benefits us. China just doesn't realize that yet.
Do you have any serious actual real experimental evidence supporting this, or is this just an ideologically based belief?
Re:reciprocity (Score:5, Insightful)
It is not about open and unrestricted. It is about an even playing field. A Chinese company coming to the west mostly finds that even playing field. A western company going to China finds that he not only competes against his competitors but also against the Chinese state.
There is no way this can be construed as benefiting the west. It does not and never will. It is unfair competition and it cannot endure if you want a thriving, open, unrestricted economy.
It is just like one country throwing up tariff-walls and the country not . That is only good for one country.
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There is a fair bit of water to cross over, so yes, it is more difficult - depending on which map app you use.
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Our government is desperate to shut down any talk of the two being linked, but everyone knows they are. China is a huge buyer of our exports, and have no problem using that power.
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The Chinese have already threatened to give us a trade war smack down.
Theory vs. Practice (Re:reciprocity) (Score:4, Interesting)
In theory "lopsided" trade where one side cheats is still beneficial to the more-open partner.
But, it seems such formulas and simulations fail to account for or detect "emergent" side-effects, such as income inequality, and financial bubbles caused in part by one side building up cash from the imbalance. Bubbles still puzzle economic simulation experts.
The simulation may predict that average GDP increases, which may technically be accurate, but most of the increase is flowing to the top 1%, not regular folks. This excess power allows them to buy the political system, giving us crap like the Citizen's United ruling, which in terms gives them even MORE influence, risking a slippery slope into a full-blown plutocracy.
They can simulate consumer buying behavior to some extent, but so far not the related politics that affect everything in practice.
They are using spherical cows.
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Economy is not a science, it's a series of ideologies.
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It's a science with too many variables to easily test models against, somewhat like the field of psychology.
When something is hard to test, that by itself doesn't make the field a non-science, just a messy science.
The problem with such fields is that it's easy for ideology and political bias to creep into theories and models. Human nature and egos muck it up.
But so far we have no alternative. People MUST make decisions about economics, such as whethe
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Well, on the upside, not allowing service oriented businesses to operate on each other's soil would spare billions of Chinese users from suffering the horrors of Windows as a Service (Windows 10).
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What if that resulted in a billion Linux fanbois? The road to hell is paved with good intentions.
Re:reciprocity (Score:4, Funny)
Better learn to code in Chinese!
Chi++ will be the new standard.
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APL is symbolic and not English-centric, we should use a variant of that. All programmers will need new keyboards and fonts.
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Well, I for one, welcome my new Dvorak Simplified Chinese Character keyboard overlords.
Hrm... (Score:2, Offtopic)
Posted by "OrangeTide (124937)", is that you Donald?
Sorry, couldn't resist.
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No it's the other guy, Hillary.
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If you have some proof to back it up, then great.
I can think of a number of alternatives that don't involve US courts unfairly favoring US companies:
* patent issues are complicated and laypeople get it wrong. (seemingly random results from thousands of patent trials makes me lean towards this one)
* different judges don't apply laws consistently.
* Apple was right (heh, no. they were wrong)
* Collusion, bribes, etc (no proof of that)
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Remember, In Soviet China, the rules operate you.
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It's not that different to how the EU is now cracking down on US companies that think that the EU rules don't apply to them. If they want to do business here they have to abide by our privacy rules and pay our taxes. Same in China.
And it's hardly any wonder that Chinese companies are better at competing in China. It's a very different culture to the west and a very different regulatory environment. Western companies should learn from the Japanese. Japanese companies often set up a western subsidiary, staffe
Unfair? (Score:4, Insightful)
America wouldn't know fair if it kicked them in the balls, what you're actually seeing is when you become number 2.
Number 1 gets to decide what's fair.
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Different rules for different people is pretty much the definition of unfair.
Now you may have other issues with the US government, American business or American culture. But you haven't demonstrated how that is material to your argument.
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Reference any "free trade" agreement the US has ever signed. When you're the biggest market you get to set the rules.
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This isn't just a case of dictating terms. This is a case of *no* clear terms. Even if you believe the agreements the U.S. signs with other nations are unfair, there are at least agreed upon rules.
With China, it's really whether you get on the elite's good side or not. You can't point to a rulebook and go "look, I did everything by the book" and be immune to BS crackdowns and shady underhanded sabotage.
That's a whole new level of dirty play that -- whatever your issues are with the U.S. -- does not exist in
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Yeah, the whole idea of letting lawyers decide what a document means is also a Western conceit. Would you really be happier if there were terms as clear as in a standard employment contract, which normally include things like "other duties as directed"? Or perhaps if China was a "right to do business" country, and could terminate their relationship with you at any time?
Perhaps they could just paraphrase the whole thing as "we reserve the right to use binding arbitration to settle any dispute (and we're the
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I like how, in one paragraph, you try to paint an image of domineering and oppressive legal environments and then point out how such an environment *should* penalize a company like Uber. But in practice, Uber is flourishing.
Perhaps the US legal system isn't as draconian as you paint it out to be.
And again, I'll reiterate my point: whether you think the written rules are "fair" or not, there are at least written rules. Trying to somehow conflate it so that it's anywhere close to the mobster-rule clusterfuck
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Uber ignores the law, so yeah, it doesn't really affect them greatly in the Western World. OTOH in China they don't put up with that, they don't fine companies less than they profit by ignoring the law, they kill their officers.
My entire point was about fairness, so your point that fairness is irrelevant is out of scope of this thread.
Wrong (Score:2)
Different rules for different people is pretty much the definition of unfair.
Only among equals. There are different rules for employers and employees too. China is stronger than a decade ago but still far behind the US.
GDP per capita (2015 in USD) USA: $55,805, China: $7,990
Protecting a growing and still weak market is normal and proven to be a necessary step when growing an economy. There is no "equality" when you have "equal" access (which is anything but) between two highly unequal economies. The reason China seems so strong - with so much in the US marked "Made in China" - isn't
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Marxists might argue that different rules for employers and employees is classism and inherently unfair.
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Intelligent people just ignore marxists. Centuries of murderous failure and all that.
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Hey, a time traveler!
Karl Marx (b: 1818).
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You should try the ice rink in Marshall, TX. It's quite lovely.
Re:Unfair? (Score:5, Informative)
They do not allow wholly owned foreign subsidiaries, any investment must be at least 50% China owned. They do this to keep profits inside China and to rip off (borrow) technology for any company that does it. It's not just American companies, it is everyone.
China's 1 billion potential customers is hard for companies to pass up. Exporting to China is very difficult because they will price you out of the market. Your option is to give up 50% of control or stay home.
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Nope, I know all that. I also know that China has no where to go but it's burgeoning consumer economy and they're going to protect that like the US protects "Artists" now and Farmers historically.
Get back to me when there's one price for a book, CD, DVD or Video game even in the limited scope of the Western World, or when the US allows free import to the USA of everything produced there.
I'm not saying I agree with discretionary pricing or protectionism per se, but for the US to cry about it is about as ridi
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You could arrange simultaneous removal of trade barriers if you like, but you can't be doing the /exact same thing/ the other guy is and crying about it.
The currency fluctuations don't even touch the real difference in pricing. Check out the price difference in shit like business software that doesn't even get a box shipped.
Mostly this (Score:2)
It's really strange to hear people claim Protectionism is bad for the US, but we are forced to compete against Countries who are protectionist. You can try to get them to compete openly, but at a point you get played for a sucker and lose your shirt. The US has lost it's wardrobe playing that game.
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This is complete bollocks. I've worked for multiple companies that sold into China, one setting up an office there, and didn't have to give up a 50% stake or accept any Chinese investment. The one with the office was selling industrial equipment to the water industry.
It's true that a lot of companies look for Chinese partners because the culture is quite different and it helps to have people with experience involved, but it's not mandatory.
Re:Unfair? (Score:4, Informative)
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Citation? The only thing I could find was here [www.gov.uk] that say it may be restricted to 50% in some industries. It also talks at length about manufacturing without mentioning this requirement.
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http://spiegeler.com/chinas-ne... [spiegeler.com]
http://www.state.gov/e/eb/rls/... [state.gov]
So technically you can set up in most industries without Chinese investment. If you want to cut through the political red tape, you get Chinese investment.
If your goal is to manufacture some widget to sell to the US, you probably won't have much issue. If you want to sell your p
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Your option is to give up 50% of control or stay home.
And yet, the foreign companies still come to China; getting into the Chinese market is a wet dream for most, large companies. China is doing what most countries would do, if they were in a position to do so, so can we really blame them? Looking back at history, all countries in Europe exploited their superior power and countries like China and India, among others (not to mention certain nations in North America), have been at the receiving end of that - which they didn't like much, obviously. Then the US be
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China's 1 billion potential customers is hard for companies to pass up. Exporting to China is very difficult because they will price you out of the market. Your option is to give up 50% of control or stay home.
What happens with pure software/Internet companies though? I would have imagined they could exist quite happily without ever setting foot on Chinese soil. Will your service just get firewalled off if it's too successful and there are too many Chinese customers sending money overseas?
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Whether that's true or not, I'm surprised The Donald is not talking MORE about this kind of thing, instead of trolling the parents of a fallen soldier. This should be right up his political alley.
It's like someone has cleared a path for him to the goal line, carefully handed him the football, but instead he goes off to beat up a cheerleader. #Idontgettit
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Came here to say this.
The last sentence in the summary reads like outright propaganda. What China is doing is saying "China first, the rest of the world second" and honestly I can't fault them for that.
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Make China Great Again!
Oh, wait, is the right country?
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We're going to build a wall along the entire border.
And the Mongolians are going to pay for it!
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Regulatory enviornment is only a small factor (Score:4, Informative)
The overriding issue with doing business in China is corruption and intellectual property theft. In plain English, that means (1) the government runs on bribery, and (2) Chinese cultural values do not regard things like corporate espionage, patent infringement, bootlegging, and knockoffs, as being unethical. This is why non-Chinese companies tend to fail, because they allowed to enter the market only long enough until a Chinese company can copy their ideas and property.
Re:Regulatory enviornment is only a small factor (Score:5, Insightful)
"Intellectual property" is an stupid "invention" that has gone too far and is reducing inventiveness. The Chinese are wise to ignore that bullshit.
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Amen per patents! Most "inventions" these days come from casually running into ideas in the course making a specific product, not a big expensive research lab like in Thomas Edison's day.
Thus the theory that patents provide an incentive to invent is mostly false.
I randomly sampled some software patents, and every one was either too vague to be useful, too obvious, or combos of bullshit buzzwords glued together.
The second alleged justification of patents, publishing ideas to spread knowledge, is also shaky.
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Your knee-jerk reaction is overly simplistic. We in the US constantly read about patent trolls and the abuse of intellectual property law by various entities; however, this does not necessarily mean all notions of intellectual property as a legal construct should be abolished. Clearly, the issue goes both ways: some companies use IP as a cudgel, smashing down anyone who might dare to compete or innovate beyond them; but at the other end of the spectrum, you have for example Chinese copycats, who steal th
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While I don't totally agree, I think it is true that it has formed a feedback loop (get money from IP regulation, lobby regulators for more IP) where it has pushed the regulation into the absurd.
Some protection adds value and incentive, too much just stifles innovation.
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So how come Apple is selling phones over there? Surely the many hundreds of iPhone knock-offs would put them out of business? And how come the clones run Android, surely some Chinese vendor would have cloned it and released their own version by now...
Oh, wait, it looks like Apple is actually ripping off features from the clones now! Except they aren't even clones, they are just better phones with their own unique features and a fair price.
Frankly, if ignoring patents on rounded corners and slide to unlock i
Re: American rent seekers NOT internet companies (Score:1)
Fascist China (Score:1)
Red China has become Fascist China, where the state and business work hand-in-hand to ensure China-based companies dominate the marketplace of a billion+ people. The government keeps control, and the companies profit.
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Sounds like the US.
Uber sucks, RIP Uber (Score:1)
That's why they failed in China. Nothing to do with China. Everything to do with Uber.
So, basically, Trump is right, again (Score:3)
New boss (Score:2)
There's nothing "unfair" about it (Score:2)
Developing markets protect their infant industries. They have to in order to advance. See here [amazon.com] for plenty of detail.
Chang blasts holes in the "World Is Flat" orthodoxy of Thomas Friedman and others who argue that only unfettered capitalism and wide-open international trade can lift struggling nations out of poverty. On the contrary, Chang shows, today's economic superpowers-from the U.S. to Britain to his native Korea-all attained prosperity by shameless protectionism and government intervention in industry, a fact conveniently forgotten now that they want to compete in foreign markets.