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The Chinese government presents its own unique challenges. “Everything is political,” says James McGregor, a former head of the American Chamber of Commerce in China. “This is a government that lets foreign companies build market share when it needs them.” Its longer-term goal is to learn enough from foreigners so it can build its own national champions. Tiffany RingsTo this end, it pushes foreign carmakers, among others, into unhappy partnerships with Chinese state-owned firms. Almost all Western consumer-goods makers have felt Beijing’s heavy hand. Bernard Arnault, the boss of Moët Hennessy Louis Vuitton (LVMH), a luxury-goods firm, was summoned by the Chinese ambassador in Paris in 2008 for a high-decibel dressing down after Nicolas Sarkozy, France’s president, said he would meet the Dalai Lama. In the following weeks scores of women marched into Louis Vuitton shops in China with fake Louis Sunglass Oakley Vuitton handbags and brazenly demanded their money back.
Unilever got into trouble recently for hinting that the price of some of its products would rise. The Chinese government is terrified of inflation, which it fears might spark unrest. It accused Unilever of inciting shoppers to hoard its products, and slapped it with a hefty fine. Yet Harish Manwani, Unilever’s chief operating officer, is undeterred. He is planning to increase Unilever’s business in China four- or fivefold in the next few years.
Buttering up local party bosses
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