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Posts: 250

Governor

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Q: Is becoming too successful in China risky for foreigners?

We all know the horror stories of "forced acquisitions" of successful foreign-owned businesses like Kro's Nest, Muffy's, and Modern Plaza. How do we operate a biz here without taking on Chinese partners and without running the risk of being forced out of your own business?   

 

I think it is criminal for someone not to have their visa's renewed simply because they do not agree to sell controlling interest of their business to a local Chinses official (or one of their family members) as happened to the original Japanese owners of Modern Plaza who basically lost their $40 million investment and about $6 million of inventory.

9 years 42 weeks ago in  General  - China

 
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Posts: 7178

Emperor

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Do you have a source for this story? A link to a mainstream news site would be good.

 

Nobody can answer unless you provide some sort of proof that what you say could be true wink

Hotwater:

I did a bit of digging on the Kro's nest name and found this: http://chinadivide.com/2010/kros-nest-end-of-days.html

 

Someone else mentioned Mark Kitto...made a big success of the "That's...." brand of magazines until he was ripped off of the ownership of it. Well know story is that one.

9 years 42 weeks ago
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9 years 42 weeks ago
 
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Emperor

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I heard about that too and many others. I think it is a bit of a danger and if you don't grease the right palms you are still in danger if your guan xi is limited or it turns on you. 

 

Some have good experiences but there has been enough very bad experiences to create a wave. I prefer digital businesses because you can simply move servers or leave China without really effecting your business. 

 

I am also very hesitant about taking on Chinese partners and prefer not to... unless it is someone I know very well or have Chinese family ties with (even then... still cautious). 

 

Never really hard of a foreigner with a successful start-up SMB in China. There are a few, but most get driven out by their partners or other reasons. The larger corporations are usually safe, but even they are fair game for the government... just take a look at Google. 

ScotsAlan:

What are you saying RobK?

 

You just suggested the Chinese guv bods took over Google.

 

Do you have a link to the story? Or are you just propagating rumors?

9 years 42 weeks ago
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Robk:

They didn't take over Google... 

 

Some Chinese companies stole Google's source code and Google told them (the government) do something about it and they didn't... so Google left. Except the didn't steal hard enough, that's what Baidu is... the bastard child of Google.

9 years 42 weeks ago
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9 years 42 weeks ago
 
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Governor

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Actually the biggest story like this would be Mark Kitto. He was forced out of his magazine company because he was crushing the Chinese competitors,so the government stepped in and took it from him. In case the name isn’t familiar he founded That’s (insert Chinese city) Magazine.

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9 years 42 weeks ago
 
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Shifu

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Kros nest? What happened there? I love going to that place when I am in Beijing. Strangely a very similar place has just opened up here in shijiazhuang.

mike168229:

how the hell did that get a downvote?

9 years 42 weeks ago
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andyinshenyang:

Beats me! Have an thumbs-up to even it out!

9 years 42 weeks ago
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Sinobear:

That's Ipso_facto...logs on several times a day to down-vote everything.

9 years 42 weeks ago
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9 years 42 weeks ago
 
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Anyone who opens a business in China and is 'surprised' when they are screwed over is a naive moron. That is China's purpose, to take from  foreign companies and countries. 

9 years 41 weeks ago
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9 years 42 weeks ago
 
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China can't innovate, thus they steal, that's all they know how to do. Even third world countries are more innovative than China.

tomcatflyer:

Completely agree, but if third world countries are better than China does this make China fourth world?

9 years 42 weeks ago
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9 years 42 weeks ago
 
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There's always a risk and price to pay in any country.

Origin:

I agree there are some solid business partners all around the world. 

9 years 41 weeks ago
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9 years 42 weeks ago
 
Posts: 117

Governor

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After one bad $60,000 joint venture in China I will never EVER have a Chinese partner again unless it is my wife. I have found that Chinese cannot bear to let a foreign partner make more money thant them and they will scheme endlessly to squeeze you out of the business once they learn how to run it from you.

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9 years 41 weeks ago
 
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Governor

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I push myself into believing that there are honest people, totally loyal to their business and fair playing. I hope that in a Country of 1.5 billion people, there are such great business partner. Yes, you have to hope and wait, and get the risk, and break your neck, and wait and risk and break your neck, until you find that person. But then, it may be far too late, because you've lost hope and faith in anyone in China. I personally, know one person that proved to be such great one, when I had nothing to offer. But I always kept myself alert, thinking that this person is a Chinese. There's always this risk, when business dealing in China.

 

Somebody above, says unless it's about your Chinese wife.... Well, I wouldn't be sure about her either. They always keep something for themselves, while foreigners naively give them everything.

 

 

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9 years 41 weeks ago
 
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Governor

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Here is a link to Australian businessmen and women who have run foul of Chinese partners, government officials and the dubious Chinese legal system. Most of them are Chinese-Australians too who thought they knew the system.

 

http://www.thechinastory.org/yearbooks/yearbook-2013/chapter-4-under-rul...

 

http://www.smh.com.au/world/australian-jailed-in-china-on-murky-charges-...

The general pattern is that they were too successful and so a target for monetary and status envy. Mark Kitto's story typifies the pattern.

 

Still thinking of going into business in China?

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9 years 41 weeks ago
 
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Governor

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http://www.thebeijinger.com/forum/2012/07/24/notifying-psb-and-police-wo...

 

I think this story proves the point of the OP

Shining_brow:

Too bad it's so old, or I'd put in my 2cents worth.... post the video & mp3 online.... at the very least, have her car totalled (if nor her!)

9 years 41 weeks ago
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9 years 41 weeks ago
 
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Interesting links above but based on my experience on this topic I wonder how long they will last.......

 

I replied to ScotsAlan's original reply above, with a link to a blog about the Kro's next in Beijing and the happenings there. When I look now I see that my reply has "disappeared".

 

Now I wonder how that could have happened? Someone been paying to have negative comments removed?

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9 years 41 weeks ago
 
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Governor

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Foreigners should boycott Tube Station - the people that ripped off Kro own it.

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9 years 41 weeks ago
 
Posts: 702

Shifu

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Ouch man.. thank God I am not rich..

nor getting close to it

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9 years 41 weeks ago
 
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