With news that Alibaba is launching itself into the stronghold of the western Internet giants, an inevitable question arises: how do western companies get into China?
It is a complicated question and one bound to bring out the zealots on both sides, quoting protectionism and unfair playing fields.
There is, of course, no doubt that Alibaba has huge plans outside China, and is partnering with US and European companies to make their dreams reality. Verifone is a partner of choice in the US, Wirecard and Zapper in Germany and the UK respectively.
But when it comes to breaking into the Chinese market, the track records of Facebook, Google and even Apple have been patchy at best. Recently Apple CEO Tim Cook visited China, had some discussions and moved swiftly on to India, leaving a billion dollar tip.
But Amazon seems to be doing just fine. Do a Google search for “Amazon and China” and there are plenty of stories about launching and expanding business within the country. Do the same for Facebook and you will find a rather old news story about them opening an office there.
Presumably the success of Amazon is about its expertise in logistics, backed by a large cheque book. Facebook and Google are about information which always makes Chinese lawmakers nervous, and Apple is just generally worrying.
The debate has got to international political levels.
The German Economic Minister Sigmar Gabriel, in a guest column for Die Welt newspaper, “urged the European Union to ensure a level playing field and adopt a tougher approach with China”:
“Nobody can expect Europe to accept such foul play of trade partners,” Gabriel wrote, adding that Germany was one of the most open economies for foreign direct investments.
Gabriel is off the China shortly, presumably to complain.
Which is fine, but Chancellor Angela Merkel views China as ‘a strategically important partner, not only to do business with but also in foreign policy. It remains one of Germany’s most important trading partners. Sixty business executives will join Gabriel on his five-day trip.
Last year, President Obama happily sat on a panel discussion with Jack Ma, chatting about green energy, innovation and his plans for world domination (Ma’s, not Obama’s).
It seems to come down to whether a takeover or partnership threatens various core national interests. And of course, a Government’s view on this will be different. The US seems very open (up to the point when they see a cyber security issue), Germany seems to conflicted and China is worried about freedom of information.
You can discuss the rights and wrongs of the different approaches until the cows come home and are happily bedded down for the night.
But the thing is, if companies in Germany, say, are developing kit that is a nice fit for a company like Alibaba to serve Chinese tourists, who is Herr Gabriel to say that the Chinese company should not be allowed to invest? Germany, it seems, is going against the European grain as well, as Europe as a whole believes that a tie up with China could caterpult e-commerce to the next level.
Surely, if there is no danger to Germany’s national interests, it should be down to the companies in question to decide whether to take on an investment from China. If it decides to do so, and makes a success of it, employs lots of people, becomes an investor itself, then surely that is truly in Germany’s national interest.
And then some.
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