Jon Emont

50 years ago, when few American companies were thinking about China, Phil Knight, the founder of Nike, saw an opportunity.

That's our colleague John Emont, who covers Asia.

He says that Knight's vision turned out to be prophetic.

How big of a success was China for Nike?

And the company became a model for Western businesses looking to break into China.

But now, what's happening to Nike in China is looking more like a cautionary tale.

Like many American brands, Nike is now struggling there.

And it's dragging down the whole company.

This quarter, Nike is projecting a 20% decline in revenue in the region.

Sounds like Nike's soles are worn down.

There's maybe a hole in the toe.

Yeah.

Welcome to The Journal, our show about money, business, and power.

I'm Ryan Knudson.

It's Wednesday, May 20th.

Coming up on the show, how Nike lost its footing in China.

Phil Knight's big idea, which he came up with as a student at Stanford, was that you could manufacture shoes cheaply in Asia and sell them for a big profit in the U.S.

In the 1970s, he started making Nikes in Japan and South Korea.

Knight wanted to get into China, at first just to make shoes.

But the trick was figuring out how.