Alibaba, Tencent, Baidu were all founded by Chinese and are based in China. The Chinese government welcomes foreign investment as long as ownership remains Chinese. KFC, McDonalds and Starbucks have succeeded because the majority of their managers, owners and workers are Chinese.

Alibaba was at one time 40% owned by Yahoo and close to 40% by Softbank, with significant stakes by investors like Silver Lake and Digital Sky. Tencent was 46% owned by South African Naspers, which still owns 34%. Baidu was funded by Silicon Valley venture capital. Google actually contributed $5 million to Baidu's third round and offered to buy the whole for $1.6B (and allegedly could have cinched the deal if they had offered $2B).

Google China was led by a Chinese American academic from Taiwan (though well liked by the Chinese) and staffed with managers recruited from Google's Chinese American employees, who had cushy US jobs to go back to and did not want to lose career opportunities in the US. The managers of their local competitors didn't have such luxuries.

Funny you brought the 40% up. The Chinese government doesn't like foreign investors controlling financial companies in China. So Alibaba spun off its Alipay service into a separate company, without the approval of investors.

Yahoo wasn't pleased and sole about 15% of their shares.

Come now, Google China had onerous censorship provisions placed on it that it did not want to adhere to, and Google simply can't be a den of piracy like Baidu was.

Yes Google is a rather special case. It clearly has technological advantages and may have succeeded despite its clumsiness if Chinese regulations were different. However that does not explain how others failed, like EBay or Yahoo. I showed clearly ownership restriction wasn't the reason. Local operational control was, in my opinion. I don't even see how this could be controversial. Jack Ma is one of China's richest man. So are the other Ma (of Tencent) and Li (of Baidu). Does anyone think hypothetical resounding successes of EBay/Google/Amazon etc could have similarly minted local billionaires? Why would the same incentives work in the US to create successful entrepreneurs but not in China?

Tactically it may be true that stricter ethics rules make things harder. But that didn't stop businesses like Starbucks from succeeding eventually, because their business model can be transplanted.

Alibaba didn't have success handed to it. Its initial B2B model was ho hum. It had to or did recreate itself, multiple times. Its Taobao was initially a loss leader with free listings. TMall was also not given a high chance of success. It had ferocious competitors. It created its own business models and executed well to ensure their success.

Out of all the companies you listed, NONE have American born founders: Ebay (Iranian), Yahoo (Taiwan), Google (Russia, ok Page is born in Michigan). How many people who aren't born in China have been minted as billionaires at Chinese companies?

Starbucks had plenty of problems with their Chinese partners; they worked hard to get to the point where they were actually allowed to run stores by themselves without a parasitic local partners, and I think this is only true in second tier cities right now.

"NONE have American born founders"

Neither were they divisions of some foreign conglomerates. I think that is more relevant than the fact the founders were foreign born. Certainly you would think of Jerry Yang or Sergey Brin or Pierre Omidyar as American as any other. They are not foreigners just because they are foreign born.

This isn't exactly correct, dual citizenship in the US is a bit weird, but you can totally naturalize into US citizenship without giving up your existing one (unless you are chinese, but that problem comes from China):

> Based on the U.S. Department of State regulation on dual citizenship (7 FAM 1162), the Supreme Court of the United States has stated that dual citizenship is a "status long recognized in the law" and that "a person may have and exercise rights of nationality in two countries and be subject to the responsibilities of both. The mere fact he asserts the rights of one citizenship does not without more mean that he renounces the other", (Kawakita v. U.S., 343 U.S. 717) (1952). In Schneider v. Rusk 377 U.S. 163 (1964), the U.S. Supreme Court ruled that a naturalized U.S. citizen has the right to return to his native country and to resume his former citizenship, and also to remain a U.S. citizen even if he never returns to the United States.

US citizens naturalizing out, on the other hand, can lose their citizenship:

> The U.S. citizen may lose his dual citizenship by obtaining naturalization in a foreign state, taking an oath or making an affirmation or other formal declaration of allegiance to a foreign state or political subdivision thereof, or serving in the armed forces of a foreign state if this action was performed with the intention of renouncing U.S. citizenship.[27]

But in practice they don't:

> Current U.S. State Department rules presume that an individual does not intend to give up citizenship when performing one of the above potentially expatriating acts. If asked, the individual can always answer that they did not intend to give it up; this is sufficient to retain their citizenship.[38] Hence, the U.S. effectively allows citizens to acquire new citizenships while remaining a U.S. citizen, becoming a dual citizen.

http://en.wikipedia.org/wiki/United_States_nationality_law#D...

Correct. China is mostly a closed countries for Chinese only. As a foreigner, the glass ceiling is clearly visible.

America in contrast is a country of naturalized immigrants as well as natural borns; as a result, many understand what it means to be outside China because of their dual cultural backgrounds...the same not being true in China. So who has a better chance in operating outside in developing countries? Its funny how China really tries to get, but can't really get, Africa, for example.

It is not nesting limits, but the flame filters we are triggering.

> Hmm I am curious if you actually have nonzero interest in naturalizing into Chinese citizenship.

The chances of me even getting a green card are very low. It is almost unheard of for a foreigner to naturalize, and when it happens, almost the president has to intervene.

Also, China doesn't support dual citizenship like the states does. So becoming a Chinese citizen means renouncing your US citizenship.

BTW, plenty of Chinese business leaders (in China) are US citizens or US greencard holders. Many have exit plans for if things go badly in China (good guangxi doesn't always last forever), and they have their kids already in the states or Europe warming up houses for that possibility.

This is how the US naturalization oath begins: "I hereby declare, on oath, that I absolutely and entirely renounce and abjure all allegiance and fidelity to any foreign prince, potentate, state, or sovereignty, of whom or which I have heretofore been a subject or citizen; ..."

It is true that you have to renounce your US citizenship to a Consul for the US to consider you no longer a subject of its (taxation power :-).

If a Chinese American travels to China using Chinese passport instead of a visa issued by the Chinese government he or she would not be able to obtain consular support if he/she runs into legal troubles. If he/she wants a visa from the Chinese government and consular support from the US embassy then he/she can't pretend to be a Chinese citizen any longer.

"Also, China doesn't support dual citizenship like the states does. So becoming a Chinese citizen means renouncing your US citizenship."

That is incorrect. Becoming a US citizen means renouncing your native citizenship as well. The only exception is if you were born into dual citizenships in which case you don't need naturalization at all.

The United States allows dual citizenship if you naturalize to a non-hostile foreign country without renouncing your US citizenship, but only because of a supreme court decision over US citizens who became Israel citizens. I am dual US/Australian via this route.

What do you make of the naturalization oath? Namely: "I hereby declare, on oath, that I absolutely and entirely renounce and abjure all allegiance and fidelity to any foreign prince, potentate, state, or sovereignty, of whom or which I have heretofore been a subject or citizen; ..." It doesn't have anything to do with which country you are from.

In general, supreme court > oath writers.

I think there is a certain amount of cross-talk here. I get what you are saying about the oath but it is administered by Federal court judges so it is apparently not in conflict with the Supreme Court ruling. Secondly it is not what the Supreme Court said that matters here. By asking the naturalized citizens to take the oath it is entirely reasonable that their native governments construe the action as renouncing their original citizenship. It is literally what the oath says. I get that with the Supreme Court ruling it is possible for American citizens to obtain another citizenship without losing their US citizenship. I think that is a good thing in this increasingly globalized world and hopefully one day national borders will mean a lot less as it is in Europe today. However we were discussing what you said: "So becoming a Chinese citizen means renouncing your US citizenship." Does China actually enforce it by demanding proof or also just make you take an oath? I understand there may be little data to tell at this point. And when I said that US does the same I meant that the US make you take the oath to renounce your native citizenship.

US is a country ruled strictly by law. Sign any contract, or take any oath, cannot discharge rights given to is by law. In the us, this means dual citizenship is accepted and even respected even if the politicians wished otherwise...they cannot deny constitutional rights without changing the constitution. Contrast this with China's "freedom of speech" that is enshrined in its constitution but not respected by the CCP, who don't need to grant those rights to the people since there is no check on their power in the Chinese system.

No one has naturalized into Chinese citizenship, but china has consistently refused to acknowledge dual citizenship for anyone younger than 18 or not born into it. It has nothing to do with oaths.

I was saying that US requires people who naturalize into US citizenship to take an oath to renounce their original citizenship. This is just a fact and the Supreme Court did not say this is unconstitutional.

Plenty of people have been naturalized into Chinese citizenship, at least in Hongkong. Here is the requirement http://www.gov.hk/en/residents/immigration/chinese/naturalis... and I do see that it requires abandonment of foreign citizenship although it does not say what level of documentation is needed, if any. If it were an oath then it would be symmetric with US. With China ruled by the CCP it is also understandable that the demand for naturalization may not be that high in the first place.

Also if you read the NPCSC's interpretation of the nationality law it would appear that the emphasis is very much on non-recognition of consular access rights. They allow Hongkong residents to hold British passports for overseas travels but do not recognize the passports or consular access rights when they are inside China (including Hongkong).

I didn't naturalize to the US, I naturalized to Australia, so I never swore that oath. I was born in the US.

"Correct. China is mostly a closed countries for Chinese only. As a foreigner, the glass ceiling is clearly visible."

Hmm I am curious if you actually have nonzero interest in naturalizing into Chinese citizenship. I think it is not impossible to do so and at least in the past the locals would be rather proud if you do have such an interest. Not that I think citizenship should be prerequisite for business success but I do believe it reasonable that you need to demonstrate that your loyalty lies with the locals before you are considered one of them. Naturalization into US citizenship does require a loyalty oath in case you don't know.

(Seems like we are running into the limit of the nesting levels so I replied to GP instead)

US is a country of (relatively recent) immigrants and China isn't. How does this relate to the topic at hand?

Many successful fast food companies use a franchise model. Starbucks is rather unique that it doesn't. I don't know enough to say whether their local partners are parasitic.

By the way, Chinese government did create its own search engine company led by a former ping-pong world champion turned sports bureaucrat to compete against the likes of Baidu. It sank to the tune of 2B RMB into the company (probably more than the funds Baidu ever raised prior to its IPO). And needless to say the money just went to waste.

"Funny you brought the 40% up. The Chinese government doesn't like foreign investors controlling financial companies in China."

In the US the threshold to become a "bank holding company" is 10% equity ownership. Becoming a BHC subjects you to the regulation by the FRB or state banking boards.