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Saturday, March 27, 2010

Doing business in China getting tougher for U.S. companies?

Good article in the San Jose Mercury News - Doing business in China getting tougher for U.S. companies.

Key Points:
  • 37 percent of tech companies complained of lost sales because the Chinese government favors products from local companies.
  • Many U.S. companies, said one example of the new hurdles its members face in China is government procurement policies requiring that products contain intellectual property developed and owned in China.
  • Tech companies also chafe against rules that require their products adopt China's local technology standards. That means they often must create two versions of a product: one for China and one for the global market.

The reason for the IP policy (owned and developed in China), as well as forcing licensing to Chinese partners if you want to do business in China is the Chinese government wants to be creating IP, and not just a low cost place for manufacturing. China tried to do this with their own 3G standard, which was a failure. They have also tried for their own WiFi standard, which is the reason the current iPhone sold in China does not have WiFi.

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