Two views on prospects for foreign tech firms in China.
First, former Google China chief Lee Kaifu has dispensed some advice for western tech firms about how to succeed in the mainland China market.
He told the Financial Times that a technology company like Google could do well because of its huge technological lead, but its rival Baidu was succeeding because its search engine was “good enough.”
Without that kind of advantage, western firms in China needed a strong local presence and empowered and flexible managers, said Lee, who until a year ago was the head of Google China and now runs an incubator.
Lee seemed to think that Amazon and Groupon might do well in the mainland market, but for the time being, China’s internet world would continue to be dominated by Baidu, Alibaba and Tencent.
Of course his words of wisdom don’t apply to telcos. Despite China’s WTO commitment to opening telecom services to foreign investment, foreign carriers are banished from the market.
But these days it’s not just telcos who are grumbling. There’s been a steady drumbeat of complaints from once-enthusiastic CEOs.
GE chief Jeffrey Immelt said recently it wasn’t clear Chinese authorities “want any of us to win, or any of us to be successful.”
Last week the EU Chamber of Commerce in China put these grievances in writing with the publication of its annual China position paper.
Much of it has been said in previous studies. What stands out this time is that just 39% of members said they believed Chinese government business policies would become less fair in the next two years.
Added the chamber: “European investors continue to be heavily constrained in areas ranging from telecom services to insurance, construction and the automotive industry. At the same time, Chinese investors and companies generally enjoy non-discriminatory access to the EU market.”
The chamber made special mention of the biggest bugbear for foreign telecom and IT vendors, which is China’s manipulation of licensing and standards.
China’s compulsory certification schemes had restricted access for the automotive, IT and telecom equipment and other sectors “and are in breach of WTO commitments,” the chamber said.