If so then the Chinese partners can get to know all the foreign IP.
I'm sure there will be show punishments under the new law, but through the joint ventures China can still get all the foreign tech knowledge it wants.
Passing all the laws won't matter, because western companies are just handing their IP to the Chinese government.
Even if China nominally had a law against IP theft, on the ground in it can be very different. They could (and do as the stories below show) ask companies to "voluntarily share their methods" and when they don',t, towns can delay permits, throw up selective barriers, and put in all sorts of disadvantages that are not officially codified.
The west would be smart to wait to see how easy it really is to do business in China without giving over IP before giving China credit.
China has been playing the "we passed a new law/speech" game to buy time for a long time, but the walk is far from following the talk. I hope China is serious, but only time will tell, not the law.
Has this not already happened? HPE is majority owned Chinese company now isn't it?
> towns can delay permits, throw up selective barriers, and put in all sorts of disadvantages that are not officially codified
Don't worry, this sort of stuff happens plenty in the US.
https://www.wsj.com/articles/wall-street-investment-banks-fa...
non-paywall: https://outline.com/UdR3KA
The first rule for any Chinese Judge is not some Right or Values, but absolute loyalty to the party.
>The west would be smart to wait to see how easy it really is to do business in China without giving over IP before giving China credit.
When will the lesson be learned!? When will the lesson be learned!? How many more dictators must be wooed, appeased - good God, given immense privileges - before we learn? You cannot reason with a CHINA when your head is in its mouth.
"China’s courts must firmly resist the western idea of judicial independence and other ideologies which threaten the leadership of the ruling Communist Party, the country’s top judge was reported as saying by state-run Chinese News Service."
"People’s Courts at all levels must disregard erroneous western notions, including constitutional democracy and separation of powers, Chief Justice Zhou Qiang was reported by the news agency as saying at a Supreme People’s Court meeting on Saturday."
That said, rule-of-law doesn't imply anything about the sources of law. In China a Party edict may be law just as much as legislation passed by the nominal legislative body. What rule-of-law demands is consistent and uniform application of the law, whatever the source. Judicial independence may be sufficient to achieve that, but it's not strictly necessary.
Most Western democracies don't have the strict, tripartite system of government as the U.S. Judicial independence in Europe arose organically as a de facto separation of powers, just as it did in ancient Rome. Over time leaders and governments figured out that things went more smoothly if they refrained from interfering with judicial proceedings, especially when you have a high-status judicial class that self-polices (where the social status of judges is dependent on them staying above the fray of lowly personal and merchant affairs, and that social status sufficiently substitutes for material wealth that there's little incentive for corruption). To a large extent judicial independence is more normative than anything, dependent on executive and legislative restraint and more general social expectations. Such norms could in principle take hold in China even with their single-party system.
Arguably such norms are taking hold. It's just that, like with poverty, they're starting from a very low point. Depending on how you want to spin it, either they haven't come very far or they've come tremendously far.
Far more important is just the red tape, and inconsistent and unfair treatment of foreign-owned companies, which compounds the already substantial language and cultural issues.
In any event, none of these things--trademarks, trade secret espionage, and rule-of-law regulatory environment--can be significantly addressed through existing negotiations. U.S. negotiators are trying to score big "wins" on copyright and patent enforcement, but as many of us on HN already know, those things (particularly the latter) don't actually contribute much of substance to the economic engine. Tariffs are also not really a big deal considering that WTO rules already provide a floor. Like with fuel efficiency standards, the returns on bilateral agreements are substantially diminished from the outset.
State sponsored theft of highly secret commercial/military information is one issue, rampant intellectual property abuse is another (eg. in fashion or entertainment industries).
However potentially larger problems are the 100% legal barriers to entry for foreign companies - censorship, onerous and expensive company formation, trademark registration, inability to operate in a hopelessly corrupt political environment, opaque legal system, legal requirements to have CCP ‘agents’ operating inside your company, local government fiefdoms that often operate beyond the law etc etc.
I will not put America in ranks with them, but I think that the biggest upside of China is that it has no such insanely convoluted tax system as in America.
That said, it's their right. I get it. Their nation, their tax rules. If I don't like the rules, I'm free NOT to start a business in China. That I understand, but to intimate that it's somehow "better" than the US is just being a little disingenuous. When it's all said and done, you'll likely pay more to do business in China. (But there's more potential upside too, so you need to take all these things into account.)
No running away from that, but you can't also run away from the fact that it is not humanly possible to profitably run a mainstream consumer electronics company outside of China. China stole the market not because it was making stuff cheaper than others, but because it was making it better than others.
In the end, you end up with lower net cost of running business.
> That I understand, but to intimate that it's somehow "better" than the US is just being a little disingenuous.
It is better to run business in China today, and that is nothing disingenuous.
I myself been in and out of electronics industry since 2007, and I can tell that not a single city ever came close in those 12 years to take the crown from Shenzhen.
You can't compare USA and PRC apples to apples, but China has advantages that America has no analogues for, or just anything to compare. USA plainly can't compete with China for the overall state of business climate in any real world industry.
Saying that plainly, I feel the attitude in USA is like "industry - bad, business - good." American bourgeois class has a collective psychosis, a delusion that you can somehow run a productive economy solely on stuff like banking, lawyering, consulting, and random "creative industries" that don't create anything. American bourgeois class is heading into nowhere following that path.
But the original comment was about China's tax system, and that's all I was talking about. I was comparing only the tax systems. To say that China's TAX SYSTEM is better than that of the US is disingenuous.
I personally know 20 or so people who had ran business in China, and been personally involved in more or less intimate financial dealings of companies in China. Good sides:
1. Tax documentation is that damn simple
2. Of all countries, it is China that understands that you don't slaughter a chicken that will be laying golden eggs. That will sound very surprising, but the overall tax policy is more or less positive towards business.
Most mom and pops shops are not demanded formal business registration, and even if they decide to legalise, many provinces have tax free or reduced tax grace periods from 2 to 5 years for small businesses! You simply don't hear taxmen making ruckus in the industry here. The worst thing about I heard personally was company's few thousand fapiao submission being subjected to review one by one for one year.
3. Smaller income tax, and in overall fever people having to pay it results in overall cheaper life for ordinary people, and cheaper workers. If you run an export business, you can see that "decoupling" effect the most. The economy is tuned to that lowest common denominator, not the abstract "middle class earner."
All of that tells that China has very different view on taxation. Plain income, corporate and individual - completely chill, but for anything like good/transactions/services/other "money in motion" taxation is merciless.
What your friend is likely taking advantage of is the fact that tax rates are only one of the costs of doing business. So s/he probably takes clients in the US, and collects money in the US, but has the work done in China. Why? Because that way s/he can potentially enjoy a host of US tax breaks made possible by the convoluted nature of the tax system here.
The only money that needs to go to China is money to fund operations there. So your friend's profit margin will likely be orders of magnitude larger than if s/he tried to pull off a consultancy with all the programmers in the US.
Again though, the thing is, we were only talking about the tax systems, which are no better in China than they are in the US. That was my point. (On top of straight taxes, your friend might have some issues getting his/her money out of China as well come to think of it.)
Is that the case? If so, can we have the Real AWS back there?
https://www.nytimes.com/2018/04/17/business/china-auto-elect...
If people venture on to criticise China, can they do so with something more that Internet meme level evidence?
> If people venture on to criticise China, can they do so with something more that Internet meme level evidence?
Could you share a link to the list you're referring to?
Restricted list on foreign investments starts on page 22, forbidden list on page 24. The first twenty pages are encouraged.
Microsoft, for example, has always operated in China as a completely owned foreign branch. The government even gave them cheap land to build their headquarters.
21Vianet is the only Microsoft cloud provider allowed by the CCP. They are not Microsoft in anyway, shape, or form. In fact if you are a subscriber of their services there is a lag in updates.(presumably so the CCP can review first)
Rather, Microsoft has decided to outsource its Azure cloud operations in China completely due to government regulation. It wasn't that they had to have a partner, it was that they couldn't do it at all.
Microsoft still exists in China, they still have a few thousand employees there in sales and R&D that are entirely paid by Microsoft.