For several years now, Western companies invest in China and earn good money with that. On the one side the margins of production had been high and on the other side China offered a huge market potential. Therefore, firms went east. Once being in China, where the system and regulations are different, they realized that not everything is easy.
In this Episode Prof. Fischer tells us about current obstacles for Western firms in China. Of course, regulations are an issue. The discussion about market barriers and the imbalance of market access became more intense after Chinese companies started to go outward and invest abroad. Further, western OEMs cannot have more than 50 percent of the shares of Chinese companies from industries declared as strategically important, such as the automotive sector. Another rising issue for Western businesses is the fierce competition on Chinese markets. New competitors from China have come up and being foreign is not good enough anymore.
Currently, one of the biggest issues though is data and cyber security. Western firms are obliged to store data on Chinese servers before being able to transfer data to their headquarters. The big question for the companies is: what happens to the data and who has access to the data? In this podcast Episode #16 we go more into detail and also cut the topic of Chinese parallel internet “universe”.
Check out #16 Episode of “WUEconomics – outside the box – Podcast” for more details and insights.
Part 3/5: Talk with Prof. Doris Fischer, Professor for China Business and Economics at the University of Wuerzburg. She is a member of the board of the German Association for Asian Studies and Member of the Editors for the Journal of Current Chinese Affairs.