My friend and China due diligence expert, Jeremy Gordon, does occasional blog posts with titles that start out with Don’t Quote Me. I have always loved those posts and after seeing a great China quote in today’s Seattle Times [link no longer exists], I cannot resist doing my own.
The quote comes from an article on Costco President, Craig Jelinek. The article talks about how well Costco is doing in Asia and how many of its best performing stores are there. It then mentions how Costco is not in China and has no plans to go there:
Jelinek echoed Sinegal’s concerns about China, where Sinegal has said the company does not plan to open any time soon. Sinegal tells a story about Costco people scouting a site in China that already had a factory on it. When they asked what would happen to the factory, the Chinese officials said not to worry, it would be taken care of.
“I’m not convinced China is a good place to go do business at the moment,” Jelinek said.
Just as I recently defended Apple from criticisms it was moving too slow on China [link no longer exists], I will defend Costco for choosing not to do business in China at all. First off, Costco is a very well run business and I assume it knows its business far better than I do. Second, it very likely has good reasons for not wanting to go into China right now. It would appear it is choosing not to go into China because it believes it can do better by expanding its footprint in other Asian countries where it has already proven it can succeed. It also appears to believe that going into China will force it to compromise its Code of Ethics.
It appears Costco is not willing to compromise its global operations for one country — China.
Who can quarrel with that?