So the big dilemma is, do we let them? Or more precisely, do we as the outside world let Chinese stifle all the foreign companies in their own market while their own companies operate freely in those foreign countries? It smells really a lot of mercantilism, and the Chinese culture of copy-catting freely doesn't help. It seems like the Western countries in particular have become too soft for Chinese tactics, and are too afraid to act against China. This at least has been my perception.
Are we going to war? Isolationism? React in kind? Simply wait?
A market works well when it's not distorted.
This might be applicable for hardware sales, but for service companies (including ecommerce, search, ride hailing, all the big USA tech company niches) it's kind of a moot point. None of the big Chinese companies put any effort into working outside of China. In fact my biggest complaint is they don't do any internationalization at all, so if you don't read Chinese you basically can't use anything. To the extend that services even work outside of China they are mainly only used by Chinese people, see for example WeChat or Taobao or Baidu. So I'm not sure this line of action would have any effect.
If the parent instead meant blocking Americans from doing any business with China (as a manufacturer of smartphones, for example), that's likely to have much more downside to American companies and consumers than to China, so we'd be shooting ourselves in the foot.
But all these points are debatable, see all the back-and-forth about the tariffs/trade war. Some great economic write-ups on all sides.
Another problem I've noted is also the Chinese companies buying up Western companies and seemingly operating as Western, but actually being fully owned by the Chinese companies which might be even indirectly owned by the Chinese government. Volvo, Supercell, Nokia phones (HMD Global) comes to my mind. From what I learned Western companies can not similarly buy Chinese companies at least fully, and part-Chinese ownership is almost required for a company to become highly successful in China.
So my conclusion is that if foreign companies can't operate freely in China, why should Chinese companies be able to operate with much less restriction in those same countries. Especially if it yields a monetary benefit for the Chinese doing so. Doesn't seem smart. Would love to see some actual research on this.
On a related note, I find it frustrating how so much residential property in San Francisco is owned by Chinese investors/real estate moguls. I have no idea what the fallout would be to limiting the ability of international entities to own so much property here, but I imagine it would help with the sky-high rents. It's not a line of reasoning I've ever seen a good write-up on, so I would be curious to understand it better.
(Almost) everyone agrees that protectionist policies are directly harmful to America's economy. I wonder if people might be more willing to accept them as tools to encourage change in other countries behaviour if they were sold better, though, or sold by someone else.
The problem with that, is that it's a vicious circle. Innovation is the foundation for future innovations. It builds on itself. It lays the groundwork and foundation for what comes next. By leapfrogging and cheating its way to the top (or near the top) they are sacrificing that crucial infrastructure for future discoveries and innovations.
China has to copy & steal IPs because it simply doesn't have the culture to compete. They're one of the least innovative countries on Earth, year after year. And the only way to change that is by allowing its citizens to think creatively, outside the box -- to be able to challenge authority. But China doesn't want that; they want conforming little worker bees who follow the party line.
Funny thing, that's exactly what people used to say about Japan, and then about South Korea. (And the typical work environments in both countries do not exactly encourage creativity or challenging the status quo, either. So I'm not sure what difference that might make.)
"Since 2012, the country has retracted more scientific papers because of faked peer reviews than all other countries and territories put together,..."
https://www.nytimes.com/2017/10/13/world/asia/china-science-...
Global Innovation Index: https://www.globalinnovationindex.org/gii-2018-report China is 17
Let's say this, the counterparts of Facebook and Twitter has already fallen or on its way to fall out of favor in China because people found more interesting ways to waste their time and find useless information. Soon, you will find Facebook and Twitter doing the same, and in that order.
Sites and apps surviving the Chinese market are the real winners, and those who cannot will fail in other countries too. That is the power of a large enough testbed.
A simple example is how Facebook and co. have recently expressed they're looking at WeChat as an example to learn from. There are many more.
The goals are: 1) removing trade/current-account imbalance (which has improved on its own due to the massive spike in Chinese tourism [2]), 2) allowing more Western companies enter China without forced technology transfer or other "unfair" practices, 3) reducing the rampant intellectual property violations in China.
[1] https://en.wikipedia.org/wiki/China%E2%80%93United_States_tr...
[2] https://www.economist.com/finance-and-economics/2019/03/14/c...
But the idea that China ever intended to continue to allow western companies to dominate their economy, once they were developed enough to do something about it, is naive. No nation, that can avoid that, allows it.
This goes beyond so much more than this particular article. The ‘western’ world is building a global civilization, and it seems like anyone is invited if you play by the rules. All of the China doves over the last 3 decades probably thought China would open up in that way and join the ‘developed’ world.
I mean, fuck, Samsung is a huge compnent of the US economy, isn’t it?
No, fuck China, and protectionism in general. They had (still have?) an invitation into the global civilization. It’s based on rules, that you have to follow. Of course there are criminals (hsbc, Libor, etc...) but overall it’s based on rules.
This ‘realpolitik’ that has taken over, where ‘yeah of course nations act in their own best interest’ is not the complete picture, because at some point, a nation’s self interest is in cooperation.
The slogan "America First" doesn't sound so globalistic. And playing by rules is definitely not before America, which is first.
Apple doesn't. The American company.
The whole precondition and reason of all those other countries being allowed to join this so-called "global civilization" and play by the so-called "rules" is because America remains the undisputed No.1 in this set of rules. America pretty much controls every aspect of the social fabric of its allies and they can't live without their big brother and protector.
If you actually talk to some Japanese and Germans, or even French, you'd find out how much apathy and even antipathy towards this American hegemony they harbor. Particularly those who don't stand to benefit a lot from this situation. I recall particularly vividly a survey where the perceptions of Germans towards America are substantially worse than the perceptions the other way round.
For CCP, the national independence and sovereignty is always the top priority, not least due to the humiliations and pain suffered in the hands of the former colonial power.
Naturally, the consequence of the rise of of an independent China is that the American hegemony is under threat. And this is the reason why America has been so keen to act against China. This is understandable, as power transitions/struggles between two great powers have rarely occurred peacefully throughout the history.
But at least you should recognize this reality instead of trumpeting the "global civilization", "democracy" propaganda nonsense. If the US actually cared the least bit about civilization and democracy, would it have sent agents to topple so many democratically elected regimes around the world, just to install their own dictator puppets and let the people suffer in eternal poverty? Would it have fought so many senseless wars and killed so many civilians?
The aim of the US is to keep its hegemony and try to keep all the other nations in their "allocated" positions. It doesn't give a damn about whether the actual population of those nations improve their living conditions or anything like that.
Similarly, the so-called "doves" are not really concerned about China's growth, but rather have expected China to occupy a preallocated place, where it would perform the roles that benefit the West, but not threaten their dominance in key industries and sectors at all. "How nice it would have been for China to remain a cheap manufacturing hub instead of trying to become a technological superpower." Too bad. China is not willing to play the ball and harbors greater ambitions than that, which it has every right to do.
This is just how politics works. But at least see it and acknowledge it. If you can't even do that, you're not seeing through even the most simplistic mainstream propaganda, and that's tragic.
South Korea, like Germany, has a military alliance with the US, and the US has military bases in South Korea. Again, there is also no real danger of South Korea dominating the US economy on the scale that the US could (if allowed) dominate the Chinese one.
Lastly, there are rules in the "global" economy, but those rules have mostly worked to the benefit of the countries that made them (see results in Latin America and Africa for what happens if you follow IMF and World Bank advice on opening up your economy). South Korea, Japan, and other "Asian tigers" mostly did NOT follow IMF/World Bank advice, and that's why it worked for them. China is basically doing the same thing Japan, South Korea, etc. did a couple decades ago.
This doesn't mean we shouldn't care, or even respond, but we shouldn't be surprised, or expect something different in the future.
I don't know about this. Starbucks, McDonalds, KFC, Boeing, Apple and many others are ahead of their Chinese peers in China. It sounds like you're just using a blanket statement from reading various online articles without even how it's out there.
Companies are allowed to operate and grow, but they are tightly controlled. Apple has strong competition and has already trimmed prices and revenue targets. China just purchased 300 planes from Airbus instead of Boeing. McDonalds sold off 80% of its China operations to a Chinese stated-owned company years ago because it had trouble adapting its menu. KFC in China is owned by Yum China and headquartered in Shanghai.
The world is not some free-market paradise. Territorial rules are everywhere. You'll encounter them just to do business in local counties within a state like New York. China's government has incredible power and control and has far more impact than you might think.
How is that the government's fault?
>China just purchased 300 planes from Airbus instead of Boeing.
Airbus is European
>McDonalds sold off 80% of its China operations to a Chinese stated-owned company years ago because it had trouble adapting its menu.
Again why is McDs inability to serve the Chinese palate the fault of the government? Consumer tastes in food are far more determined by culture than government.
The rest of your statement is a non sequitur and strawman.
The parent poster claimed McDonalds was a successful example, however it only successful because it is now led by Chinese-state-owned agency so the real-estate (which is 99% of the value) is not foreign owned. Same with KFC.
What is non-sequitur? That governments exist and have different rules for their businesses and citizens?
2. > Boeing or Airbus get a significant lead over each other in their controlling market
Isn't that the smart thing to do? Government ALWAYS chooses multiple vendors, DARPA wants to use AWS as its sole cloud computing provider and it gets SUED.
What you seem to want to point out is, China has a very unique business environment and domestic market, where Western companies, if not going through intensive localization and adaptation, can't directly deploy its otherwise global operations in China easily. Yes, China needs to open more of its market, and under the current trade war, it needs to do that fast. However, that still won't mean that American companies should assumed be the winner, unless they have a competing edge, the locals just can't offer.
I really don't see this is a much problem here. China/Japan/Korea, those Asian countries have dynamic domestic economy, and those companies are competitive in their homeland.
Amazon couldn't compete because it was not allowed to compete.
China allows foreign companies to compete and grow as long as they follow their rules and are in non-critical markets. Amazon was in a critical market and had domestic competition so it was pressured until it left.
Aviation is a critical market so Boeing and Airbus are being carefully controlled to stay soft in favor of the upcoming (state-run) Comac C919 jetliners getting US certified. China is already selling these jets in Asia and they will be the used by all 3 major (state-run) Chinese airlines once ready, eventually pushing out Boeing and Airbus completely.
They don't really care about some luxury goods brands but they are investing heavily in critical sectors like aviation. They have a long road ahead but Comac (state-owned manufacturer) is already selling commercial aircraft to other countries.
Boeing = no chinese competitor available
Apple = is feeling the pressure now
And yet the users in this thread have repeatedly said that there are major product differences between Amazon and its Chinese competitors, where the alternatives offer much better value propositions to their customers.
In addition, Amazon is having trouble in many countries other than China.
Because the Chinese counterparts are government propped.
Chinese nationals are the largest foreign group of investors in US commercial and residential real estate. They have plenty of access. The success and scale of the Belt and Road Initiative directly shows just how vast the control extends.
In China the government appears to clearly control the corporations (while there are some highly influential corporations that, through their economic power, have essentially become moves and shakers in the government) in America corporations control the government (while there are a lot of former politicians who end up sneaking off into highly paid do-nothing positions for their help during their tenure in elected office). These things are different, and America is absolutely a more free place, but it isn't an absolutely free place.
Amazon has past the point where vertical integration questions should be raised and a break up should be considered for the public interest - not pursuing it for them (or Walmart, or Google, or many other too-large-to-fail corporations) is another form of assistance the government offers them.
The US is not a free market and participates in private industry subsidization both with and against the public interest but, I agree, it's no where near China's levels - to keep it from getting to those levels we need to acknowledge how bad it has already gotten.
Totalitarian control has an effect on competition. Those cannot be independent.
Do you have any evidence that this is what happened in this situation??
> And yes the article is bullshit because this same government won't allow any negative press about their actions either.
Again. Could be true, but how am I supposed to know that your interpretation is correct?
Not that different than Microsoft sunset their gaming business in Japan
Microsoft did not leave Japan, they are in fact expanding Xbox Asia and have added an Asian team to the Global Gaming Partnership and Development (GDDP) division: https://www.google.com/search?q=xbox+asia+expanding
So sometimes, (like in this case, it looks like), it may just really be the case of a business not being able to adopt to the different expectations of Chinese consumers.
I was just reading the other day about why U.S. car makers struggle in Japan and that for example domestic car makers there offer the ability to customize the car to an extent U.S. companies can't compete with.
It's likely that Amazon faced enough competition naturally, given its low market share.
Culture is varied and in many ways everything. Competition is also biased and fierce. At least that's my understanding of things (as a white guy born and remaining in the SW USA).
I do find it funny that Amazon is pivoting to "high quality cross-border sales" considering that into the U.S. seems to be low quality, high markup sales (including high levels of counterfeits) with no end in sight.
Those counterexamples are just companies operating in China, of which there are many. There's no problem unless they try to become major players which will never happen. Ikea is the biggest and has recently come under pressure for simply suggesting that Taiwan is a separate country through packaging. This is tightly controlled market, you don't just wander in and do whatever you want.
I would argue the latter is the usual competitive advantages local companies have.