At least once a week, I will sarcastically say, "I'm from the government and I'm are here to help you." I love blaming the government for just about everything. But even I have my limits.

In its post, "The iPhone debate: what can Apple do?" China Herald has a nascent debate going on regarding Apple's China foray. On one side, Shaun Rein, who believes Apple's less than stellar start in China is its own fault and believes it needs to do the following to succeed in China:

1. Listen to local consumers
2. Pick China Mobile as a partner rather than China Unicom
3. Treat China as a part of the global market, not as a separate one

On the other side sits PTaylor, who blames the Chinese government for Apple's alleged woes.

To which Rein has this to say:

I always like it when people say it is all the government's fault and there is nothing companies can do to get around it. That is sometimes true but smart companies will evolve business plans for local conditions to factor in local regulations and market conditions. Apple did not do that well enough.

When people say that, they just don't know enough about how to get things done in China or, as is often the case, local execs do know what to do but they can't get buy-i from the home office.

For instance, eBay failed in China more because of meddling from the home office than from folks in China -- they were actually quite good but just ignored.

So, Ptaylor, my advice -- learn how to deal with obstacles rather than just
complain about them.

Who's right?

Well, of course, they both are to an extent, but I overwhelmingly side with Shaun on this one, despite being an Apple shareholder and massive fan of the company.

But let me start out by stating as clearly as possible that I do NOT think Apple is failing in China. I do not know exactly how well or how poorly it is actually doing there, but the reason I am certain it is not failing there is because it has not been there nearly long enough for anyone to say it has failed, or even that it is failing. Apple is a big company and I am quite certain that it plans on being in China for the long haul and until the long haul is over, one cannot ascribe failure to it. Apple is still in the "getting its feet" wet stage in China and it is not fair to pass anything close to final judgment on it until it has gotten well past this stage. I again urge everyone to read the book, Chocolate Fortunes, to better understand how it can take a long time and a lot of money for a big company to establish a consumer foothold in China. Let's just say Apple's conduct in China has not caused me to even think about selling even one share of my stock.

But I side with Shaun nonetheless because it is not right to blame the government for Apple's alleged shortcomings in China because the responsibility rests with Apple to know of government issues before entering into the China marketing and to have a plan for dealing with them. If Apple did not know of the governmental issues it would face and did not have a plan in place for dealing with them, and if those issues are going to prevent Apple from succeeding in China, long term, then Apple should not have gone into China. My guess is that Apple did know of most of the major hurdles the government would be throwing up against it, does have a plan for dealing with them, and does (and almost certainly will) know how to succeed in China despite them.

Again, my response here is based largely on my own experience with assisting other foreign companies in going into China. In the typical situation, the smart company knows and plans for most (though certainly not all) government obstacles to its doing business in China. The smart company also knows whether those government obstacles are likely to fall disproportionately on them or whether they are going to be spread around fairly evenly among both them and their competitors.

It is the very rare situation where I would be willing to blame the government for my clients' failing in China. In fact, it is the very rare situation where any of my clients have even sought to blame the government for their own failures in China and even rarer still where I would agree with them.

We had one client who set up a factory in China only to discover that it would need environmental approval to import one of the key component for its product. This client made a mistake in not checking this out first, but it did not blame the government for this; it merely went through the somewhat arduous process of getting that component approved.

We had one client who was fairly hard hit by a change in China's tax laws that caused it to make sense to restructure its business entities a bit. This client did the restructuring and talked often of how its having done this so quickly would actually give it an edge over some of its slower moving competitors.

We have had a million clients who have had issues with the government regarding countless things (zoning, labor issues, tax issues, etc.), but virtually all of them worked these things out and virtually all of them acted as though these sorts of things are just par for the course in doing business anywhere.

We have had clients who have invested money into China and/or started businesses there that were later declared illegal for foreigners. These businesses had to close down and in these cases, it would not be fair to blame my clients entirely for their situation. But is this really any different from the risk any business faces of its business being declared illegal or becoming obsolete. When Seattle banned all smoking within a business, a couple of cigar bars had to shut their doors. As people move to the internet, newspapers are shutting down. Though I certainly do not entirely blame the impacted businesses for their plight, I do think that any business runs an existential risk and that is life.

The truly nimble business will nearly always survive, no matter what the external conditions.

Blame the business or blame the government? What do you think?