Exactly. Got the countries confused. Foreigners are being treated like royalty here.

This may sound like heresy, but heck, I’ve always been a heretic:

I have lived and owned businesses in Europe, in the USA, and in China. On all three continents for a long time, successfully, and intensively.

Nowhere have I experienced more freedom and less interference than in China. In Europe, you get taxed, regulated, and controlled to death. In the US, lawyers make your life a misery once you make some money. Don’t dare to get married or sell auto parts.

If you love capitalism, you’ll adore China. They say “Happiness is an American house, a Japanese wife, and a Chinese cook.” Hey, I traded in the house for the other two. And thank God, I did it just in time, two years ago …..

That’s Russia, whom has a bone to gnaw on vs. the West. I don’t think there are any examples of that in China. It’s obvious to anyone that’s walked in the central business district in Beijing, that there are tons of US/European companies making big bucks in China.

Funny that you mention Sanlitun, it wouldn’t exist if it weren’t for the rich expat community. And not just rich relative to the local population, rich compared to the average Joe in the US. When those expats return, they aren’t driving a Malibu.

The corporation to have is a WFOE (pronounced “woofee”):

“PROFIT REPATRIATION
China Government allows Foreign Invested Enterprises remit their profits out of the country and such remittances do not require the prior approval of the State Administration of Foreign Exchange (SAFE). Dividends cannot be distributed and repatriated to oversea if the losses of previous years have not been covered while dividends not distributed in previous years may be distributed together with those of the current year. Repatriating the Registered Capital to home countries is forbidden during the term of business operation.”

I can speak firsthand that the culture in Brazil only VERY rarely (at least at the consumer level…I have not worked there) respects IP & copyright.

Everyone is corrupt to some degree, and it’s particularly rampant in developing countries but China and Russia elevate it to an art form. Between official policy and back-room agreements between government and industry, you’d be hard-pressed to make long-term profits in either country. BP’s experiences, for example, should be a lesson to automakers wanting to get into bed with AutoVAZ or one of the many Chinese brands.

I’m not saying Indian or Brazilian corporate culture is a paragon of virtue, but that a foreign investor stands more than a snowballs chance in hell of not being pushed out when they start making money. Low-grade, wheel-greasing corruption is a cost of business; the risk of your venture being nationalized on a whim and/or your ex-pat employees being tried and convicted of whatever the government can make stick.

You can go into pretty much ANY city and find TONS of vendors to sell you the latest copy of Windows for a couple dollars, as well as playstation games, dvd’s, or any other easily copyable media. This is out in plain sight. Not from the back of a van, but in an actual store or vendor stall.

When I asked people there why they don’t think copying commercial software is wrong, they often say “Manufacturer already has enough money. Why should we care if we copy their stuff? I can’t afford the legitimate version”.

The funniest part is, it is their OWN government that insist on super high taxes on ANYTHING imported. Some free market, eh? I have a friend in IT there, and 1TB hard drives are running $1000 in local currency (equivalent spending power to $1000 US here in the USA), while here they are approaching $100.

For something more related to this website, I looked at MSRP’s of popular cars there (a couple years ago..things may have changed since then) and a BMW 325i I think was MSRp’ed at the time of about $140,000 US. 140,000!!!! A subaru WRX was listed at about $80k and the STi was not for sale there. A friend there just bought a 2009 Peugot 207 and it was $42k local currency. Doing some reading the Brazil Peugot207 is a redesigned 206….

I can count on one hand the number of people I’ve met there who believe in software copyright.

As my good faith effort (I have been a programmer and I firmly believe there is no need to illegally copy commercial software, dvds, mp3’s, etc), I built my niece a computer based on Linux. She enjoys it no less (she has her IM, her web browsing etc, just like her moms windows computer) since I set up everything in Portuguese so she can use it.

And I wouldn’t mind being in an economic “slowdown” where the annual growth is 8%…

Because the geniuses with the letters after their names determined the benefits outweighed the negative consequences. China is learning a valuable lesson as we speak, however: without a market (uhm, that’s us) for their goods, they’re up the proverbial s*** creek. Read today’s NYT piece about slow growth and empty factories in Mao country these days.

And this should surprise no one. Chinese business is–with some exceptions–at the same time incredibly predatory, lacking in accountability and disrespectful of such things as intellectual property, and tied as closely to government as it is, it has no incentive to change. Russia (the other “Next Big Thing” for margin-hungry western companies) is just as bad.

If I were a titan of industry, I’d be looking very hard at the cost/benefit ratio of doing business in either state and diversify into emerging markets that, while perhaps not as immediately profitable, are at least less corrupt. India and Brazil come to mind.

As our friend Pete would say, “ain’t-gonna-happen.com”

The US government will eventually need to tell China that they can’t behave that way if they want to keep exporting goods to the US. Open your markets or we close ours. But it may take an entire “coalition of the willing” — international trade agreement — to pull this off. It’s not like China will allow the Japanese, Koreans, Europeans a seat at the table either.