The hassle in China

Google is getting all the attention with its threat to walk away from China, but it's hardly alone in its displeasure with government policies. Frankly, most Western executives will tell you that doing business in China, while potentially lucrative, is still a major pain in the keister. There's all the obvious stuff, such as restricting the sale of foreign movies and books, as well as cutting off access to the Internet and hacking into search engines (what Google is grousing about). But it's a hassle on practically every front, evidenced by the army of attorneys based in L.A. that are hired to smooth over disputes. From the NYT:

Foreign companies have long complained of being cheated by joint venture partners who set up parallel businesses on the side or abscond with assets. Many other countries also have policies that favor home-grown companies, although the opportunity for industrialized countries to do so is limited because they operate under tighter W.T.O. rules than China.

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The newest frictions, particularly in the past year, have been over government procurement policy. When China joined the W.T.O. in November 2001, it promised to negotiate as quickly as possible to join the W.T.O.'s side agreement requiring free trade in procurement. But it has never actually done so, leaving the Chinese government free to use its enormous buying power to steer contracts to Chinese-owned companies.

Meanwhile, the White House said Wednesday that it backs the "right to a free Internet." In a nutshell, Google said that Chinese cyber spies are trying to hack into the G-mail accounts of Chinese human rights activists.