This is an MIT Sloan Management Review article. The place of multinational corporations (MNCs) in China has rapidly changed since the 1970s. No longer expected to bring cash and management expertise to China, argues that MNCs have taken on a new role as teachers and role models. However, recent high-profile mistakes, including a McDonald's Corp. (Oak Brook, Illinois) ad that over 80% of Chinese surveyed found offensive, show that MNCs are not entirely up to this task. Illustrates the consequences of this inability to cope and suggests eight strategies for improving MNC's success in China: think local--act global, don't apply double standards, don't bend the rules, avoid making "symbolic" acquisitions, avoid employing aggressive tactics over intellectual property rights, guard against management insensitivity, don't "strip mine" profits, and don't use China as a lab. Shows how these strategies can be executed to increase MNC's profits and standing in China.

In China, guanxi, or personal connections, can divide the loyalties of the sales and procurement people on which your company depends. If you're alert to its potential to cause mischief, you can head off relationships that could work against you.

Traditionally, complex business structures in the Chinese market have kept foreign companies out. Now, with Kodak leading the way, corporate structures from the West are gaining acceptance and are providing a way for China to let foreign companies in through the back door.