American companies can turn their luck around in China by taking cues from Chinese companies entering the US market and learning from their successes and failures. Some Chinese companies have done well domestically and internationally, like Alibaba, while others have not done nearly as well. US companies should look at what makes companies like Alibaba successful and figure out what they can improve on to influence their initiatives. The most crucial takeaway US companies can learn from Chinese companies like Alibaba is to get Chinese nationals involved in the higher levels of their Chinese branches’ everyday operations.

I watched a documentary called American Factory on Netflix, which addresses some of the issues Chinese companies have had getting into the US market. Corporate culture in the US is drastically different that in China, so companies need to adjust their practices to fit the country they operate in. In the YouTube video Rebecca Fannin: “Why China Could Win the Technology Race with the US?”, Rebecca Fannin explains how companies like eBay have not had success in China. They did not employ people who spoke Chinese to run their operations and avoided giving autonomy to their Chinese branch by making them report back to their US base before making decisions. A similar thing happened to the Chinese company from American Factory, Fuyao. The owner of Fuyao emphasized making the company operate under Chinese standards, and the important decisions were made by people used to working with Chinese workers with drastically different corporate cultural values. They did not consider how their American workers would react to the standards they were expected to work under and did not understand how to interact with typical American unions, which are an integral part of the US corporate culture.   

For American companies to succeed in China, they need to learn from the mistakes of companies like eBay and Fuyao and invite Chinese nationals to work as executives in their country, or even entirely run their Chinese branch. This can help fix issues within the company, like what happened at Fuyao, but it is also beneficial for the way a company interacts with their consumers and other business contacts. In the New York Times article Alibaba Faces Growing Pressure over Counterfeit Goods, Li explains how Alibaba uses this idea, having the opinions and cultural expertise of actual citizens of the US, to help come up with the right ideas or plans to implement.  If the company does not actively participate in being culturally conscious or does not have contacts within China, it is less likely to conduct business effectively. US companies need to take in this idea and offer management positions to Chinese people, who best understand how to run a company full of Chinese workers, interact with Chinese business partners if they have them, or even work with the government.

Li also highlights that Chinese companies lobby the US government for support and to avoid being put on lists that could damage their reputation. In this same vein, American companies should maintain a positive relationship with the Chinese consumers by committing to reducing the number of counterfeit goods sold, since the issue of counterfeit goods damages Alibaba’s reputation. Chinese consumers want more high-quality goods as their living standards improve, so they are moving away from buying goods on sites associated with Alibaba. An example is Taobao, the Chinese version of Amazon, which is notorious for selling fake goods. To enact this, I would recommend that American companies include some vetting for the sellers to combat counterfeit goods being sold and maintain the company’s positive reputation. It will likely be easier for American companies to access popular brands in the US and sell their products in China, with a much lower risk that they are counterfeit. Having Chinese nationals more involved in the company’s operations can also help maintain a positive relationship between the Chinese consumers and US companies. 

Aside from general cultural and logistical errors US companies need to remedy, Alibaba’s US operations provide an excellent example for American companies to look at if they try their hand in the Chinese market. If American companies want to dip their toes into the Chinese market, they must improve their technological capabilities to become more widely accessible. American technology is lagging far behind when it comes to eCommerce, especially regarding the difference between the US and China. Alibaba is essentially a one-stop app for consumers to complete their entire online shopping routine without hassle. To perform competitively in China, US companies would need to have a model that, at the very least, compares to what Alibaba already has in place. For example, American companies could improve their apps’ functions or create an app tailored to their Chinese customers. If American companies used a similar model to Alibaba’s with easy payment options, it would help them gain a foothold in the Chinese market. I think hiring Chinese employees to guide what Chinese consumers expect from a company trying to compete with China’s giants would be the perfect way to assess the effectiveness of what US companies would like to implement.

There is much for US companies to learn from both the positive aspects of China’s approach to the US market and the parts of its operation it has not done such a good job running. American companies can improve their technology, appoint Chinese nationals as executives, combat issues such as counterfeit or fake goods to create a good relationship with the Chinese consumers, and improve upon things Chinese companies are already doing. If American companies were to take some pages from Chinese companies like Alibaba and improve upon them, it would help them survive, if not do very well in the Chinese market.