THEY’RE COMING BACK – INTERNATIONAL BUSINESS

In the early 2000s, numerous global companies, including tech companies, were pouring into China, telling themselves that “the American dream might soon only be found in China.”  One wonders about the lunacy that drove such a level of group-think that created this delusion.

Clearly, those who bought the idea, and therefore “drank the cooaid,” didn’t actually know much about China and its operating predilections – that the country had followed for centuries.  Just because the Chinese might have been opening the door to foreign companies didn’t mean that they were planning on doing business American-style.  Today, fifteen years after the pipe-dream began, companies are disillusioned and are starting to pull up stakes and head back home to America – having experienced “soaring costs, creeping taxation, tightening political control, and capricious regulation” (cf recent WSJ article).  In retrospect, it’s unbelievable that so-called seasoned businessmen would have bought the idea that the business environment in China was going to be just like the U.S., only better.  Steve Mushero, a tech guru, was one of those who first declared China as the next best hope – Mushero included the prophesy of the future of American/Chinese business in a book that he was writing at the time.  As a result of convincing himself of this ungrounded idea, Mashero pulled up stakes and resettled in Shanghai.  Today, he has hit a wall, after years of struggle in China, and is headed back to Silicon Valley.  Bob Boyce was also a part of early efforts to populate China by American entrepreneurs. Boyce started a bar and grill (to serve an affordable burger in Shanghai) that proved an immediate success among the expatriates there, as well as, eventually, the Chinese.  With his initial success, he continued to expand into a 10-city, $70 million chain of restaurants.  Beginning in the early 2010’s, Boyce began to see a distinct change in attitude (although he says that he was always viewed as “a foreigner” by the Chinese).   As a result of constant visits by health inspectors who cited him for small infractions: a bottle of out-of-date dried oregano;  and also dictated specific operational processes: space exactly 8 square meters on which to prepare salad, was among the many requirements.  All-in-all, the continued political pressure added up to Boyce selling his businesses in 2017 to a European firm and moving back to the U.S.  During the early 2010’s, a number of other problems had begun to surface – for example, by 2013, it was well-known that technology theft in China was rampant and, thus, only 10% of the companies doing business in China trusted data security enough to consider cloud services in China.  All of these hurdles have added up to the fact that American businesses are either dismantling their China operations, are in the process of determining to do so, or are asking serious questions about a continued presence in China.  The new American dream, it certainly is not.

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