US entrepreneurs make a choice: rewards of doing business in China often outweigh risks of losing trade secrets
- Foreign companies are often required to hand over technologies to gain access to the massive Chinese market, a tactic that is a focus of US-China trade talks
- Beijing has drafted legislation to crack down on forced tech transfers, but enforcement remains a question
Growing up in the suburbs of Philadelphia, Chris Alonzo never imagined he would end up training Chinese farmers halfway around the globe how to grow mushrooms. But two years ago, when he met his Chinese partner, he saw an unexpected opportunity that could help his business grow.
China wants to improve its mushroom production and safety. It has the capital, and Alonzo, who operates the largest indoor mushroom-growing facility in the US, has the know-how. In exchange for a minority stake in the joint venture, the 48-year-old farmer agreed to teach Chinese growers how to use a Dutch environment-control system to maintain optimal temperature and humidity to grow mushrooms indoors year round, something the Chinese don’t know how to do.
Alonzo, the owner of Pietro Industries – one of the largest family mushroom farms in Chester County, Pennsylvania – saw an opportunity that could bring his 80-year-old family farm unprecedented market reach and profit.
The project, which will receive more than US$250 million in Chinese funding over the next five years, is projected to produce 200 million pounds of mushrooms a year at new indoor farms in cities of China’s eastern Anhui province – 10 times more than the 19 million pounds of annual output at Alonzo’s farm in Kennett Square.
Residents of the Pennsylvania town of 6,000 have heard stories in recent years about Chinese companies stealing American technology, but that prospect doesn’t faze Alonzo.
“I read in the news of what’s going on about forced tech transfers, but it doesn’t apply to us,” he said. “The Chinese won’t be able to steal my knowledge because it’s not easy to learn. I have been growing mushrooms for 25 years, and I am still learning.