Doing business in China: It’s a foolproof way to make huge profits, right?
Say you’re a company like Apple. You have a great, innovative, original product that surely the 1.3 billion people in China would love. But conditions apply any time a Western company wants to do business in China. So is it really worth it?
It seems Apple is learning that it may not be. Like Donkey Kong, the Chinese government is throwing barrel after barrel of challenges at Western companies. And now, Apple has to deal with getting sued by a knockoff. Chinese smartphone brand 100C is suing Apple in a Beijing court for stealing its design. Guess who won?
Apple immediately appealed the decision, of course. So for now, the iPhone is still on sale, and a final ruling could take a full year.
Now this lawsuit in and of itself probably won’t hurt Apple much. By the time the court case is finished, Apple will be onto the iPhone 7 and it will be a moot point.
The real problem is that Chinese law, and China’s courts, are pretty much like the Wild West—no rules. And the hits Apple is taking in China has some investors scared. For example, billionaire investor Carl Icahn just sold off $5 billion in Apple stock. And due in part to Chinese competitors and knockoffs, Apple had a 26% year-on-year drop in iPhone sales in China last quarter.
Unfortunately, it seems that no matter how much money Apple invests in Chinese companies, or how willing it is to comply with Chinese censorship, the Chinese government has the same plan for Apple as it does for every Western company: Lure them in with profits, steal their intellectual property, and make homegrown Chinese knockoffs to eventually replace the original.
