"Foreigners can't succeed in business in China" - actual comparative data, or unsubstantiated hogwash?

"Foreigners can't succeed" is 100% hogwash."It's more difficult for foreigners to succeed" would be 100% true.I'm Canadian, but have lived and worked in China for 23 years.  I've started two successful businesses here, had one failure, and one mediocre result.  I'd consider that a pretty damned good success rate even back in Canada, much less in China.  So the claim that foreigners cannot be successful in China is plainly false.More to the point, my first business was as a cross-cultural consultant, helping foreigners understand how the Chinese culture impacts business in China.  How to manage and communicate with Chinese employees.  How to build strong business relationships with Chinese suppliers, partners, clients, etc.  How to really understand 'face' and 'guanxi'.  The list goes on and on and on.Just watch a typical foreign businessman having dinner with Chinese VIPs, and I'll bet that I can point out at least five significant cultural mistakes that they make during that dinner.  Not minor embarrassments, like not using chopsticks properly, but significant mistakes that could impact relationships, trust, and/or communication.Look, doing business in your own country is difficult.  The majority of people who try to start their own business will fail.  This is a standard rule pretty much anywhere in the world.  If you're doing it in a country where the language and culture are entirely different, then obviously the odds of failure increase even more.On the other hand, if you are successful, the potential rewards are huge.  I know several foreigners in China who've made significant fortunes with self-started businesses.There were a few things that all of them (including myself) shared in common.  First, zero reliance on luck.  We all did massive preparation.  Years spent getting the relevant experience.  More years spent in studying and learning the necessary knowledge.  More time invested in learning about Chinese culture (often by starting a business that failed, and then learning from that experience), and how to work in it.Second, realistic expectations.  The whole "China has 1.3 billion people, so if I can make ten cents from every person, that's over a hundred million dollars!" thing is pure nonsense.  You're never going to get anything other than a small fraction of that market, and you'll be competing for that small fraction with quite a few other companies.  You won't be an overnight success.  It will take time, and money.Third, think of something that Chinese can't easily copy...because if they can copy it, they will.  They'll copy it, and then sell it cheaper, to a larger market.  You will not be able to compete.  I myself have always focused on service-oriented industries, where Chinese tend to do more poorly, and where there is a bias (fair or not) that foreigners provide better and more trustworthy service than Chinese do.  Sure, there have been people who've copied me, but I've been able to maintain a significant position in the market.Summary -- It's like pretty much everything in life.  Yes, there's a big risk.  Bigger than if you were to try to do the same thing in your own country.  But there is also, potentially a bigger payoff, if you are indeed successful.  I wanted to edit to share a story that helps illustrate this.  About ten years ago, I was at a conference in Vancouver, B.C. that was discussing international business.  I attended a talk given by a Taiwanese businessman, who spent all his time telling everyone about his spectacular failures in China (dude lost over 25 million dollars), and then essentially concluded, "I'm Chinese, I speak the Chinese language, and know the Chinese culture, but I failed.  You aren't Chinese, don't speak the Chinese language, and don't understand the Chinese culture.  You have no chance."When he finished, and there was time for Q&A, I stood up and confronted him.  I explained that I had started a successful business in China, and knew several other foreigners who had done so, also.  He stuttered a little as he tried to dismiss that, that we were just 'lucky'.  I concluded by stating that I felt it a rather curious phenomenon that those had failed held themselves up as experts, while dismissing the opinion of those who had succeeded.There are tons of people who've failed in China, and will tell you horror story after horror story about all the things that can go wrong.  And they're true.But they are the experts on failing.  Not on succeeding.  If you want to know how to succeed, talk to the people who've demonstrated their ability to do so.

The statistics shows that nearly 50% of foreign companies exit China within 2 years.  There are many reasons why the companies failed.  I will list 5 common mistakes: 1. Enter China without fully understanding the challenges, 2. Under-estimate the cost of business development, 3. improper strategies or poor execution, 4. working with wrong partners and 5. the business model does not suit the culture. I will also include an article for your reference - http://leveragechina.com/five-major-challenges-faced-by-the-american-smes-during-china-market-entry/  Casey W. Xiao-MorrisChina Business Consultant

Non-chinese people do not have a level playing field in China.  That said, the scope of the opportunity is such that I really do think that anyone willing to work like mad and be flexible can really have a shot at doing great things here.