Companies: Cultural Confusion; What goes around, comes around. It's China's turn.

Byline: Stefan Theil

When they first entered China, many Western companies made costly mistakes. Not knowing the ropes, they underestimated the complexity of operating in such a huge domestic market, were blissfully unaware of the nuances of Mandarin bureaucracy and flew in Western bosses often accused of arrogance.

What goes around comes around--and this time it's the Chinese who are getting burned. Now that they've begun gobbling up Western companies, it turns out they haven't learned much from others' mistakes. "Chinese companies investing in the West are not the turbocapitalists everyone expects them to be," says Wang Wei, M&A consultant with Deloitte & Touche in Dusseldorf. They often arrive unprepared, overpay for acquisitions, fail to do their due diligence and aren't sure how their new Western holdings fit into their global strategies. The result: a recent series of nasty corporate disasters.

Exhibit A may be BenQ, the Taiwanese cell-phone maker that last week announced it would shut the struggling German plants it took over from Siemens only last year. Despite investing in new models and assembly lines, the new brand has seen its worldwide market share plummet, from 5 percent in 2005 to just 3 percent today, leagues behind market leader Nokia's 33 percent. Last year BenQ CEOK. Y. Lee bragged that the Siemens purchase would help him catch up to the likes of Nokia or Motorola, the latter of which operates a profitable German plant to make its state-of-the-art multimedia cell phones. Consultant Wang says it's clear BenQ underestimated the costs and complexities involved.

The litany of Chinese mistakes eerily echoes Europe's own in the China market. ...