In THE SUMMER OF 2010, JEFF Immelt, then the CEO of General Electric, sat on one of the private planes at his disposal, headed to a conference of Italian business executives in Rome. He had just come from meetings in Shanghai and Beijing, and was in a sour mood. GE had spent years—and invested millions - in China, believing, like so many other Fortune 500 companies did, that it was the future: the largest and thus most important market in the world. The year before GE’s sales there had been $5.3 billion.
Now Immelt was losing faith. Growth in the company’s key businesses, including power and medical imaging, had begun to slow from the levels GE expected. Government regulators, meanwhile, seemed increasingly hostile, holding up permits and increasing inspections of…