A friend of mine sent me an article today on how “mid-market” American companies are not doing enough to take advantage of money making opportunities in China. The article is entitled Still figuring out China and it starts out noting how America’s share of imports into China has shrunk from to 7% from 10% in 2000 and this shows “America is losing competitive ground to other countries in what is widely viewed as the biggest growth opportunity of the 21st century.” My friend sent me this article (along with some others) after expressing strong frustration regarding his own company being too “chicken” to venture into China.
The article posits the following reasons for America’s lack of success in doing business with China:
- Too much concern with China’s lack of IP protection
- Anti-China sentiment
- A lack of focus on China/a lack of support regarding China
I think all of the above are true and I will add one more. American companies tend to be more conservative about doing business internationally, particularly when it comes to countries very different from our own, like China. We are a big country and a big market and it is relatively easy to write off a complicated and difficult country like China. The problem with doing that, however, is that by the time that country becomes “easier,” the companies that went in during more difficult times already have a massive leg up when it comes to things like name recognition and distribution, making it difficult to catch up.
Not saying all American companies should be looking at doing business in China. Not at all. But I do think too many American companies are ignoring great opportunities in China and like my friend, this frustrates me.
Are we off base here? What are you seeing out there?