Can foreign companies ever make money there?

A 2003 US Chamber of Commerce survey identified that 65% of US companies in China were profitable and their margins were equal to or greater than those in their domestic markets.

In 2003 Intel generated $3.7 billion in revenue, and Motorola $2.7 billion. GE reached $2.6 billion that same year and expects $5billion this year. Dell's Chinese computer sales grew 60% in 2003 and Walmart earned $700 million.

China 's National Bureau of Statistics data shows total profits of foreign-invested manufacturing businesses more than tripled from 1999 to 2003, from $9.1 billion to $33.5 billion. Average profits per foreign enterprise increased across the same period by 256 percent.

Motorola, Nokia, Ericsson, Alcatel, Intel and Dell are all seeing healthy returns on China investments. Coca-Cola says it has been profitable in China for the last 9 years.

However caution and a correct approach are vital.

When IBM went in to China in the 1980's they leased two floors of the Great Wall Sheraton hotel in Beijing and waited for customers to go to them. After several years they realised they needed to reach out and create a sales and service network, but their first training session in Beijing was scheduled for 1 st October. Unfortunately they didn't realise this was National day, and no one turned up.

In 2002 Pepsi celebrated its twentieth anniversary in China . After investing $500 million in the establishment of 30 businesses it was approaching $1 billion in sales. The only problem was that after investments and marketing costs it has yet to achieve a profit, which it hopes will come very soon.