Diamond, August 25, 2001. Ten Japanese home-appliance makers have moved into China, but most of them are struggling to make a profit, due to the low prices offered by Chinese makers. Sony, which boasts a powerful brand name, is the only maker able to sell high-quality products without lowering prices. Japanese makers face a number of problems in China. Because they offer their employees fixed salaries and bonuses, they have difficulty attracting capable salespeople when Chinese firms offer incentive-based pay.
Japanese industry is loose in that it uses vague contracts.
In addition, the copying of products made by foreign manufacturers is rampant in China. Companies like Sharp and Mitsubishi Electric have asked the authorities to do something about it but have received no help. It is hoped that China's accession to the World Trade Organization will lead to development of the Chinese legal system, but in reality it will be hard to do anything about counterfeit products. It seems that Japanese manufacturers have difficult days ahead in China. Caibin Shen, Mitsui Global Strategic Studies Institute.