China is no longer the El Dorado it once was for foreign companies. More powerful, richer, more confident, the country has changed profoundly since it joined the World Trade Organization twenty years ago. Sometimes for the better, with clearer rules, and better applied, despite important limitations. Sometimes in bad, with growing nationalism, a sometimes tense political atmosphere, and a willingness to replace foreign technologies and firms with Chinese, as quickly as possible.
Let’s start with the good news: China is getting richer, the country’s GDP has increased eleven-fold in twenty years. Certain sectors are particularly benefiting from this, such as luxury goods, which increasingly depend on Chinese consumers. L’Oréal or LVMH are taking advantage: while their turnover collapsed in mid-2020, China came to the rescue. Deprived of travel abroad, the Chinese have exploded luxury sales by 48% in their country, reaching 20% of global sales. The orders of planes by the Chinese companies also continue to run the factories of Airbus in Europe. At the end of 2020, 1,900 Airbus were operating in China, including 99 delivered during the year, or 17.5% of the group’s sales.
“Twenty years ago, you could have your product copied in four days, and the judges never ruled in favor of foreign companies! »Christophe Lauras, President of the French Chamber of Commerce in Shanghai
Another good news is that intellectual property protection has been strengthened. Twenty years ago, big cities like Beijing and Shanghai hosted “fake markets” in the city center where you could find imitations of Vuitton bags or Nike jackets. Today, copies are still numerous, but the sellers are no longer established.
“Twenty years ago, it was a nightmare: even if China had entered the WTO, you could have your product copied in four days, and the judges would never agree with foreign companies! Today, the legal environment is much better ”, notes Christophe Lauras, director of operations for the Accor group in China and president of the French Chamber of Commerce and Industry in Shanghai. “There are fewer cultural and language barriers. The Chinese are more educated, travel more, we find more reliable partners. The lists of sectors forbidden to foreigners have continued to shrink. So, from that point of view, access is somewhere easier ”, continues Mr. Lauras.
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