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2023 | Book

Selling to China

Stories of Success, Failure, and Constant Change

Editor: Ker D. Gibbs

Publisher: Springer Nature Singapore

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About this book

This book, authored by the head of the American Chamber of Commerce in Shanghai during the US-China trade war, is a sobering look at the realities of the intermeshed nature of the Chinese and American economies at a time of increasing political tension. Foreign companies are caught in the middle between compliance with US laws and policies versus doing what’s required to have support in China and access to the world’s largest growth market. Opportunities still exist, but this is a dangerous and complicated time. This book will be of interest to professionals, economists, and scholars of US-China relations.

Table of Contents

Frontmatter
Chapter 1. Introduction: About This Book and Why We Wrote It
Abstract
The United States and China seem headed for conflict. Every day, the headlines describe new reasons to dislike, distrust, and disengage from China, a country that is also one of the world’s largest markets. The relationship between the United States and China has often been called the most consequential bilateral relationship on earth, but it also may be the most fraught with conflict and misunderstanding. For the past several years, the relationship has grown steadily worse, with no apparent solution to highly contentious issues involving national security, human rights, and sovereignty.
Selling to China about the opportunities and challenges facing foreign companies operating in the largest growth market in the world for many products. It includes stories about 3M pivoting to find new market opportunities, and a single tweet about pro-democracy protests in Hong Kong that nearly shuttered the NBA in China, leading to hundreds of millions in lost revenue. The United States and China seem locked in conflict, but readers may be surprised to learn how well many American businesses have been doing in China. Today, GM sells more cars in China than in the United States; Tesla also does well but faces intense competition from Chinese EV makers. Selling to China is a collection of essays written by C-suite executives managing foreign companies in China. Each brings a unique perspective and explains the issues in a different industry.
Ker D. Gibbs
Chapter 2. Legal Services: Lessons of a Technology Lawyer in China
Abstract
Through over 17 years representing US and Chinese technology companies in Shanghai, Don has learned important lessons about China’s innovative technology sector, IP environment (still challenging to navigate, but rapidly evolving and improving) and legal industry. These lessons inform an analysis of current US-China relations. Recent US escalation of the US-China Tech War—the opening salvo of which was fired by the Chinese government in 2008, when it began to block American technology companies such as Facebook, Google/YouTube, and Twitter from operating in China—risks significant damage to the US technology sector by effectively reducing or shutting off most Chinese investment. This has limited not just the flow of cash, but also the opportunity for US companies to learn from and access cutting edge IP from Chinese companies. Each country’s apparent quests for hegemony across key technology sectors and economic independence—and each one’s concern that its former pattern of engagement with the other risks both quests—exacerbated by aggressive steps to achieve these goals and a mismatch of economic systems, leaves them hurtling toward potential conflict. A path forward for the United States and China should be founded on both countries’ (1) acceptance of competition, interdependence, and different systems; (2) defining national security narrowly and reacting only when necessary to defend it; (3) engaging in regular dialogue and efforts to work together in areas of shared interests to develop trust; and (4) renouncing conflict and actions likely to induce it, absent exceptional circumstances.
Don S. Williams, Marie C. Williams
Chapter 3. Government and Governing: Observations of a Corporate Affairs Executive
Abstract
Government and its various departments are a part of commercial activities no matter where we are, but nowhere else in the world is the government’s power and influence more evident than it is in China. It is an organic and integral part of business and daily life at the central, provincial, municipal, and even residential block level. The recent COVID-19 prevention lockdowns in Shanghai are an example of how governmental organs work and control lives at these various levels.
Jean Liu
Chapter 4. China’s Industrial Businesses: Decisions, Missteps, and Lessons Learned
Abstract
The only thing that has never changed in China is change. Knowing China is good, but not good enough. Learning how to win in China is not a learning session. It is a continual process of learning and adapting to keep up with the changes and take advantage of them. The opposite is also true because changes may also be unfavorable. This chapter lists examples of rewards for good decisions made and prices to pay for the opposite. Continual learning is more straightforward and accessible than it seems. The motto is Don't skip the basics, Stay close to customers, and Have a clear vision of the countries' priorities.
Chun Hung (Kenneth) Yu
Chapter 5. Marketing and Social Media: Staying Ahead of the Most Dynamic Market on Earth
Abstract
I was in Bangkok when I got the offer to go to Shanghai. In 2005, advertising agencies in China were desperate for senior, experienced talent. I had just moved my wife and two young children into a new apartment that we had purchased in the central part of the Thai capital.
Bryce Whitwam
Chapter 6. China’s Auto Industry: The Race to a Sustainable Future
Abstract
The automotive industry has historically been a major driver of innovation and economic development. We are currently facing a shift in the center of gravity for the industry, as new trends and technologies have commercialized at scale faster in China. Policymakers and industry leaders need to pay attention to this if we in the West intend to sustain leadership in mobility innovation, which has historically been a key driver of economic growth and job creation.
Bill Russo
Chapter 7. Sports Marketing in China: Ball and the Wall
Abstract
My career of more than three decades in greater China has been both rewarding and enjoyable. I’ve had the good fortune to lead the explosive growth of both NBA and UFC in Asia from the ground up, and since then to build several other successful sports enterprises in the region. I learned to value Chinese culture and especially the Chinese people. I married one, made close friends with many, and worked alongside or competed with hundreds more—on and off the court. This adventure has of course also brought its fair share of unique challenges.
China’s culture traditionally does not lend itself to playing and following sports for their intrinsic benefits, such as health, teamwork, discipline, and just plain fun, especially for young people. Obstacles standing in the way of these ideals include the society’s overweighting of academic and economic advancement at all costs, the heavy hand of government authorities, and a larger culture rooted in face and hierarchy that would seem to encourage collectivism, but where the opposite—every man (or woman) for themselves—too often prevails. Beijing’s COVID-19 restrictions, a heightened sensitivity to territorial slights, and an ongoing tendency to promote domestic brands over foreign ones have further exacerbated the hurdles for American and other sports businesses.
This chapter explores these challenges, recounts the story of how NBA China was able to overcome most of them, and how some long-term improvements to China’s sports industry—for both domestic and international players—are starting to take root in recent years.
Mark Fischer
Chapter 8. China-U.S. Supply Chain: Pragmatic Relationships and Laissez-Faire
Abstract
Today’s news cycle is dominated by the words “China'’ and “global supply chains,” with complicated stories about congested ports and elevated freight rates. The current supply chain challenges, the situation in China, and what we can expect in the future, are some of the questions being raised. Did China deliberately cause the product shortages and the higher prices we pay for consumer goods? Is China part of the problem, the solution, or both? What are the pros and cons of America’s decoupling from China and on-shoring, near-shoring, or alternative off-shoring production? How does the savvy multinational mitigate risks and manage the chaos? Can American companies build trusting relationships with their China counterparts in today’s highly politicized business environment?
Daniel M. Krassenstein
Chapter 9. Epilogue
Abstract
At a time when popular discourse in the United States seems more focused on why American companies should not pursue business with China, Selling to China is a useful reminder of the depth of U.S.-China commercial engagement and the potential costs of taking economic decoupling too far.This book reminds us that conducting business in China has never been easy, but that American companies have been successful. In an era of growing U.S.-China frictions, however, the paths to success have become more challenging as national security considerations weigh more heavily over the pursuit of commerce. The business executives who have contributed to this volume offer valuable advice about operating in China. This includes the importance of government relations and being sensitive to cultural differences. We are also reminded that Chinese companies can be formidable competitors and this will only become more so moving forward.
Kenneth Jarrett
10. Correction to: Selling to China
Ker D. Gibbs
Backmatter
Metadata
Title
Selling to China
Editor
Ker D. Gibbs
Copyright Year
2023
Publisher
Springer Nature Singapore
Electronic ISBN
978-981-9919-53-6
Print ISBN
978-981-9919-52-9
DOI
https://doi.org/10.1007/978-981-99-1953-6

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