Monday, February 21, 2011
Fellowes Is Locked Out of Chinese Joint Venture
I also warn against investing in joint ventures overseas. Here a congressman asks the Chinese government to intervene on behalf of a private business dispute, as though such a thing would happen in USA. And of course, the Chinese side of the story is not elucidated.
Fellowes would have no problem at all if they merely bought their paper shredders from the Chinese factory, FOB Shanghai. Why would anyone want to pay into a joint venture overseas? Ostensibly of course to protect their intellectual property. (And there are other reasons, but they fall into two categories: the naive, who think they can dominate and benefit from a joint venture, and the criminal who wish to launder money and avoid taxes.)
I demonstrate in my book how USA companies obviate the need for control by working with the real world systems in place to earn money for your ideas selling worldwide, without intellectual property rights.
The fun part of someone asking a congressmen for help is now the dispute is in the wide open. Now everyone knows Fellowes can no longer supply Office depot, Staples, Office Max, etc with paper shredders. And now everyone knows where to go to get Fellowes-quality paper shredders, and that is the company named Shinri in China. Further everyone knows Shinri is not selling to Fellowes, so Shinri is open for USA business. Just because Fellowes did not have what it takes to trade wisely with the Chinese, does not mean you cannot. If paper shredding is your thing, work with the Chinese on an OEM basis, and succeed where Fellowes failed.
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There have been numerous postings of the Fellowes / Shinri troubles in Chang Zhou, China but it seems all of the postings are only from the USA point of view with no real input from the China side to understand what may have really happened. In the USA it is supposed to be "Innocent until proven guilty" but this does not appear to be the case in so many articles that have already judged Shinri as the "Big Bad Guy". Is it really the truth? Before we all judge we should look to see what the other side of the story may be and Fellowes may not look so innocent and we would probably be able to find out what the true story really is. Fellowes I feel would be some what embarrassed by the real truth coming out.
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