06:23 AM

A View from Within on US Companies and China

[This is from the comments section on my entry "Dissidents within YHOO and GOOG will make ethical companies." I'm publishing it as an entry to give it wider distribution. -Tom Foremski

By David Scott Lewis

This is a tricky issue, Tom -- as are many issues pertaining to China. As a Silicon Valley expat living in China and working in their R&D/IT sectors, I often wonder what response firms like Google and Yahoo (and Microsoft, for that matter) should have.


Among expats, we just kind of accept things the way they are. Kind of like rules we don't like, but those are the rules, so we have to play by them.


Semel's remark about Nazi Germany, however, is scary. If he really said, it should be grounds for his termination. But we can't put today's China on the same footing as Nazi Germany.


Yes, Beijing often feels like "Berlin, 1936", but the rest of China generally isn't this way, certainly not in SH. And most Chinese don't really care about this stuff: They're happy that their living conditions are improving each year (I'm speaking of urban Chinese). See my http://doiop.com/wang article which was one of the most widely read AO columns last year.


Personally, I'd like to see Google, Yahoo and Microsoft take the moral and ethical high ground (of course, I'd like to see the White House and new Congress do this, too). But then what about IBM? And Motorola? Where does it stop?


Do ALL American firms play hardball with China? Maybe. It would be fun to watch. (I'd be looking for a job, but it would still be fun to watch!)


Most of us expats get frustrated, but we learn to adapt to the rules. Also, there's a sense that the restraints and constraints might be "temporary," i.e., lasting for no more than a few years. Hard to say. Neo-Fascism/ultra-Nationalism is easy to whip up here (hence, the "Berlin, 1936" analogy). So it's a tightrope that American firms have to walk.


But, back to Semel, if he really said what ValleyWag said he said, then he should be terminated. Even giving this a second thought borders on hideous evil.


My advice as someone living in China: Develop scenarios for how to play the China card. Take into account that China may well indeed become a hostile enemy of the United States. (Not likely, but possible.)


Don't be reactive to what happens in China, be proactive. And figure out if the China market is really worth all the effort. For some, it is. For most, it may not be. As a development center, sure (but that's my bias; that's what we offer).


Keep core IP in the States. Be prepared for completely asinine responses from various levels of government and potential China-based competitors. (Our notions of Western logic do not prevail here. China never went through an "Enlightenment" period.) China is the Wild West where anything (and everything) does happen.


David Scott Lewis can be contacted : goldentriangle+svw (at) gmail.com