Doing business in China getting tougher for U.S. companies

From John Boudreau and Brandon Bailey in the San Jose Mercury News:

Just a few years ago, the mantra in Silicon Valley went like this: What’s your China strategy? A 2010 update could be: What’s your China headache?

China’s allure is stronger than ever. It remains a cheap place to manufacture goods, and its rapidly growing domestic market includes 400 million Internet users and 700 million mobile-phone subscribers, numbers unmatched anywhere else in the world. But a country already known for obstacles is becoming less welcoming to foreign businesses.

Google’s frayed relations with the Chinese government over intellectual property theft and censorship spotlight the growing discontent many Western companies are experiencing in the country. And American companies are certain to face even tougher conditions there if U.S.-China tensions continue to rise over issues such as China’s currency controls, which experts say boost China’s exports while limiting imports from the United States.

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