I am not a trans-Pacific entrepreneur, so take this with a grain of salt.
From what I can tell, China's most fundamental problem is that it's taken an inherently protectionist stance on large businesses and investment, one which is completely incompatible with the sort of business done in Silicon Valley, which requires heavy international cooperation, recruiting, business mobility, and fluid investment, as well as the opportunity for frequent, unpunished failure without consequent shunning.
As it was explained to me... If you want to do business in China and you're not a citizen, you damn-well need to find one to start a Chinese business which can transact with you formally. If you want to scale your business and you don't have a midlevel member of the Communist Party running your HR department, you damn-well need to find one who can drink baijiu with the right people. If you want to scale your business to large enterprise levels and you don't have enough bribes in the right pockets to be part of the Chinese economic planning process, you damn-well need to get there; You might not be the first to do so, even if you try.
Don't do these things, and the rug will be yanked out from under you every which way possible, from licenses to immigration to financing to every sort of red tape. The Chinese Communist Party may have liberalized its way into a functioning domestic economy, but it's not willing to take its central planning thumb off the scale or permit full capitalist investment without political influence. The consequences of this mentality extend beyond tolerable levels - if the central plan is that this new startup BaoJao is the greatest thing ever, why would they permit your competitor to try and defeat it? The default stance is doubt about you and your enterprise, particularly if you represent foreign involvement.
One of the enduring differences between Silicon Valley and the rest of US capitalism is the lack of noncompetes, which is a step forward relative to the rest of the country for thriving competitive enterprise, but China is not two steps back, it's fifty steps back.
> As it was explained to me... If you want to do business in China and you're not a citizen, you damn-well need to find one to start a Chinese business which can transact with you formally. If you want to scale your business and you don't have a midlevel member of the Communist Party running your HR department, you damn-well need to find one who can drink baijiu with the right people. If you want to scale your business to large enterprise levels and you don't have enough bribes in the right pockets to be part of the Chinese economic planning process, you damn-well need to get there; You might not be the first to do so, even if you try.
This is a fishing story.
> Don't do these things, and the rug will be yanked out from under you every which way possible, from licenses to immigration to financing to every sort of red tape. The Chinese Communist Party may have liberalized its way into a functioning domestic economy, but it's not willing to take its central planning thumb off the scale or permit full capitalist investment without political influence. The consequences of this mentality extend beyond tolerable levels - if the central plan is that this new startup BaoJao is the greatest thing ever, why would they permit your competitor to try and defeat it? The default stance is doubt about you and your enterprise, particularly if you represent foreign involvement.
What's a fishing story? I haven't heard that phrase.
Anyway, yeah, it's funny how often you meet experts on Chinese business who haven't actually done business in China but can go into elaborate detail about why it's a bad idea. I met lots of Western entrepreneurs out there - there are tons of foreigners running bars, restaurants, outsourcing firms , language schools, etc without much hassle from the government. You can even get around the minority ownership rule by incorporating in HK, or at least you used to be able to. I wouldn't start a big internet company out there, or a factory, but small companies in certain sectors seem to get left alone. It's probably more anarchic than the West, actually, which was one reason I liked it out there, though I've never seen myself settling there long term.
"I wouldn't start a big internet company out there"
We're not talking about bars and restaurants.
Small internet companies in Silicon Valley all want to be big internet companies. To do that they need investment, ownership, freedom to transact contracts and appoint employees at will. You can set up a small startup in somebody's garage anywhere in the USA, but you are unlikely to scale to a billion dollar company. Few get to be unicorns, but those that do drive the cycle for everybody. They're enabled at the early stage by having near-zero regulatory compliance requirements, and nearly zero people that they have to convince that they have a genuinely good idea. This is not the way business is done by foreigners in mainland China.
Yes, China's legal environment is unfriendly to building a large business as a foreigner. But no, foreigners in China can start tech businesses with "near-zero regulatory compliance requirements" - I knew 3 white guys in Chengdu who started a mobile marketing consultancy in their apartment.
China is basically anarchistic in some areas, authoritarian in others, is what I'm getting at.
I'm guessing fishing story == a huge exaggeration.
As in, when you catch a normal sized fish and then go home and tell your friends about the massive fish you caught and how it put up a fight for two hours.
From what I can tell, China's most fundamental problem is that it's taken an inherently protectionist stance on large businesses and investment, one which is completely incompatible with the sort of business done in Silicon Valley, which requires heavy international cooperation, recruiting, business mobility, and fluid investment, as well as the opportunity for frequent, unpunished failure without consequent shunning.
As it was explained to me... If you want to do business in China and you're not a citizen, you damn-well need to find one to start a Chinese business which can transact with you formally. If you want to scale your business and you don't have a midlevel member of the Communist Party running your HR department, you damn-well need to find one who can drink baijiu with the right people. If you want to scale your business to large enterprise levels and you don't have enough bribes in the right pockets to be part of the Chinese economic planning process, you damn-well need to get there; You might not be the first to do so, even if you try.
Don't do these things, and the rug will be yanked out from under you every which way possible, from licenses to immigration to financing to every sort of red tape. The Chinese Communist Party may have liberalized its way into a functioning domestic economy, but it's not willing to take its central planning thumb off the scale or permit full capitalist investment without political influence. The consequences of this mentality extend beyond tolerable levels - if the central plan is that this new startup BaoJao is the greatest thing ever, why would they permit your competitor to try and defeat it? The default stance is doubt about you and your enterprise, particularly if you represent foreign involvement.
One of the enduring differences between Silicon Valley and the rest of US capitalism is the lack of noncompetes, which is a step forward relative to the rest of the country for thriving competitive enterprise, but China is not two steps back, it's fifty steps back.