Google made a controversial decision to stop operating its Search site in March 2010. Now Google awaits approval from the Chinese government to operate its mapping service due to a new regulation, while wondering if the government will pull their license for providing online content due to their bold action back in March.

Google’s journey reminds me of how complicated business can be in China.

It has been 5 years since I studied abroad in China. The charter of our trip was to examine how business operates in China and see if the incredible economic growth over recent years was “real” and how successful companies navigate the perceived complexity. It is interesting to reflect back on a subset of my research that was conducted during my intensive 2-week visit. The following are a few of the predictions and observations that I made during that trip, juxtaposed against more recent events.

First, I predicted that entering the World Trade Organization will force China to move towards a more open economy that allows for private ownership and foreign investment in an increasing number of industries. I was watching the news a few weeks ago, and a Chinese business woman was quoted saying that “[she doesn't] run her business, the government does.” Although this is only one data point, I guess my first prediction hasn’t fared so well.

Second, I predicted that as income rises, consumers will expect a higher standard of living. In turn, this means they will also expect more regulations related to consumer protection and labor rights. A staggering estimate of 90,000 demonstrations occur in China each year. It is no wonder that civilian unrest exists when catastrophic events such as the 2008 Chinese milk scandal occur, where milk and infant formula using melamine resulted in infants dying and being hospitalized. Sadly, the demand for consumer protection and labor rights continues; however, it appears little progress may have been made.

Third, I was not convinced that government sponsored business incubators such ZPark could emulate the entrepreneurial spirit of Silicon Valley.  Essentially, we saw a replication of Silicon Valley that lacked free-market forces and was underpinned by little private funding from venture capitalists.  The largest concern I had was around the lack of visible rigor put into each start-up’s business plan.  It appeared new ventures had little to prove in order to receive and maintain funding, which makes me skeptical of the phenomenally low failure rate of 2% for new business ventures. In Silicon Valley, I would expect almost the opposite failure rate. For every true business success, there are many failures. I continue to believe my observations regarding entrepreneurialism are true based on the news Google has been generating as of late. If the government interferes with business, entrepreneurialism will suffer.

It seems navigating business in China might not be any less challenging than it was 5 years ago. Best of luck to Google and others trying to make a positive difference, while expanding their businesses into such important markets as China.