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Comment by like_any_other | Hacker News Reader

> But the irony is that when a non-European entity were to do something like this, e.g. nationalize their oil or mining etc. industry or a firm, the whole hell would brake loose.

As far as I understand, Samsung, TSMC, and SMIC are all closely guarded by their respective governments. And China doesn't (didn't?) allow foreign companies to operate in China without a local partner at all. So I don't see the irony - everyone practices protectionism, some are just more subtle about it than others. Some China-specific examples:

tmnvix points out the perfectly analogous Chinese restriction of rare earth exports: https://news.ycombinator.com/item?id=45572420

China imposes more trade and investment barriers, discriminatory taxes, and information security restrictions than any other country by a vast margin. - https://ecipe.org/wp-content/uploads/2017/06/DTE_China_TWP_R...

As with most countries, China has adopted some policies aimed at protecting or promoting its domestic industries, including targeted quotas, subsidies to certain key industries and rejection of patents in critical industries. - https://www.rfa.org/english/news/afcl/fact-check-china-prote...

https://en.wikipedia.org/wiki/Made_in_China_2025 - government plan with securing first local, and the global key markets, for indigenous firms, the acquisition of foreign technology companies, and independence from foreign suppliers, as explicit goals.

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I said it that way because I don’t like the hypocrisies in general, and I said European because the comment I responded to combined Dutch and European markets into one.

It would be foolish to sell off a great value like ASML or others that adds incredible value. But one should also not get mad when other countries do it, because they see their industries as valuable things as well.

Our markets are just getting more closed and different groups are being formed. Let’s hope other high value companies gather their IP rights as well.

> It would be foolish to sell off a great value like ASML or others that adds incredible value. But one should also not get mad when other countries do it, because they see their industries as valuable things as well.

This reads like a straw man argument. No one gets mad when other countries do it. At most, you see complains of protectionism being unilaterally imposed while benefitting from your competitor's openness. See for example the criticism directed at the likes of China for preventing foreign companies from even investing in their domestic market without a government-minder-as-a-partner scheme, while China throws a tantrum when there is even a hint of suggestion that Chinese companies should be subjected to the same type of treatment when operating abroad. See the case of TikTok, for example.

China never claimed it's markets were free to enter by foreigners. US/EU did.

If tit-for-tat is our policy, then we should at least be upfront about it and enshrine it in law, instead of using some ancient law to slap China with: that's arbitrariness.

Reducing/eliminating those mandatory joint ventures were a requirement for China to join WTO. But in practice it delayed these reforms.

Everyone who screws over the WTO has my sympathy.

Anyway, the Dutch should then make a law that demands WTO status or smth. As this is NOT nicely applying rule of law.

Then someone should take the case to the WTO Appellate Body(0), unfortunately Trump and Biden have blocked appointments to it since 2019, so WTO rules cannot be enforced.

(0)https://en.wikipedia.org/wiki/Appellate_Body

There are a million ways to cheat trade, the WTO was created to handle small disputes, not large structural imbalances. International Law was highly flawed in that regard owing back to Bretton Woods.

But of course it benefits everyone at the expense of deficit countries, so why change or truly address the literature. Appealing to international law today as such is just appealing to entrenched interests.

But the matter of fact is that in a true free trade regime, imbalances should rebalance back to zero. The fact that the deficit is only growing is more than enough evidence that China is obviously the violators here. And everybody knows this.

Under a multilateral Bancor System which Chinese economists themselves advocated back in 2009, China would have been immediately subjected to massive FX overvaluation to degrade their conpetiveness.

> Under a multilateral Bancor System which Chinese economists themselves advocated back in 2009

I had to look that up and this stood out

> U.S. Secretary of the Treasury Timothy Geithner expressed interest in the idea of greater use of SDRs as a reserve. However, he was criticized severely for this in the United Statess, and the dollar lost 5 cents against the euro in exchange markets following his statements. He and President Barack Obama shortly afterwards backtracked Geithner's comments.

https://en.wikipedia.org/wiki/Bancor#Proposed_revival

I'm beginning to see a pattern of which country is blocking any progress here.

Yeah, the US was wrong there and in Bretton Woods. But unless if this an exercise in nationalist polemics, that doesn't change the fact that China is the prime violator in such a system by virtue of their surplus, not the USA which runs a deficit.

China has the right to protest, because nowadays the Chinese companies are not "subjected to the same type of treatment".

There is a huge difference between establishing from the beginning clear rules that set limits to foreign investment, like in China, and changing the rules afterwards, after luring foreign investors, and then taking ownership of their assets, like for Tik Tok and Nexperia.

Obviously I agree that USA and the EU have acted very foolishly in the past by exporting technology to China (foolishly for the national interests, while a few have been greatly enriched by this), but at least they followed consistent policies, not like now, when they change the rules of the game whenever they see that they are the losers.

Philips Semiconductors should have never been sold and become non-Dutch, but if they have been so stupid as to do this, they should assume their responsibility and finance the creation of a new European semiconductor device manufacturer, to ensure the independence of hostile entities.

China also protested when tariffs were floated and any kind of non-retroactive protectionism was proposed. Framing this as only being a problem because the "rules were changed afterward" is deceptive (as is implying that China has "clear" rules). In any case, this Dutch government takeover was done on the basis of a law from 1952, so no, the rules were not changed after "luring" investors (who retain ownership and can still sell their shares, they were not expropriated, so they lose no money).

Not the case when taking into account recent history, or old history and politics. Obviously to say china was the country historically getting faraway lands to fall in line by economic means is opposite of reality. Tiktok is also political and so on. And yes they got mad when other countries do it. At least they used to, I think less so recently but I’m not sure since I don’t bother reading the news anymore when it feels like a repeat.

Preamble; I do not support the restrictions China imposed on free market.

I think China is complaining about changing the rules retrospectively when they become successful in a field. But I’m not following how this is any different than French subsidies or limitations on farming products from Ukraine.

If they’re abusing the system, which I presume we all can agree that they do, why don’t we force them to play by the rules, or do we not like losing so we keep changing the rules when somebody else starts to win.

Again, I wouldn’t allow such vital industries from medical equipments to military tech to be outsourced to this level. It was silly to begin with.

Yeah Asian tigers mostly didn't follow the narrow comparative advantage guidance and instead did state protection of industry to develop it: https://www.amazon.com/Kicking-Away-Ladder-Development-Persp...

The US did the same when it was young, along with large instances of exfiltrating tech (Samuel Slater, kicked off the American industrial revolution).

> And China doesn't (didn't?) allow foreign companies to operate in China without a local partner at all

Tesla was the first to buck this trend.

Just for cars. Microsoft has been independent in China since the late 90s, although they had to find a partner to do Azure.

> although they had to find a partner to do Azure.

By "finding a partner" you actually mean have Azure-branded services provided by Chinese companies through isolated data centers.

Which kind of proves OPs point.

Do they use the same Microsoft software and the Azure APIs that are available in the rest of the world?

Yes. As for AWS, some of the services are not available in CN. But the APIs are the same for the services that are available.

For some MS software, you need to sign an additional agreement consenting to cross-border transfer of personal data before use. But the features are the same.

Same as AWS ("cn" regions) which often has different rules, especially with cross-region comms.

Same applies to the US gov cloud regions and Apple's iCloud.

Microsoft operated in China for more than a decade before azure was a thing. A lot of companies did, Microsoft is just the one I’m familiar with.

Almost everyone in China pirated Windows and Office. Microsoft were unable to do anything about it, and gave up trying.

Western companies have virtually no IP in China. It gets stolen and IP rights are not enforcible - western companies basically cannot sue Chinese companies. Chinese companies can enforce their IP against western companies, who have to surrender theirs to access the Chinese market. The system is completely rigged in China's favour.

The only way to level that playing field is for western nations to do the same: Let their domestic companies freely steal Chinese IP and selectively enforce IP rights, as China does.

Like in other places, Apple does very well in China, and everyone "pirates" MacOS wait...no they don't. Microsoft made/makes money in China, the piracy came from an outdated software model that eventually went away, and WinDev was going down in flames on revenue worldwide even before that.

> The only way to level that playing field is for western nations to do the same: Let their domestic companies freely steal Chinese IP and selectively enforce IP rights, as China does.

China literally just gives it away for free. They are the top supplier of open source LLMs.

The next question is: why did China give Tesla this unprecedented deal?

The answer I heard at the time was to get local suppliers and workforce up to Tesla standards.

It appears to have worked out for China quite nicely.

Well yeah, they used this playbook with Apple as well.

We do not appear to be very smart as a country.

It's not a country - it's a collection of individual billionaires. Each billionaire involved in these kinds of deals gets richer, and has no reason to care about anyone else.

Yes, but we’ve apparently chosen to run our country in such a way.

"we" never got any say in the matter.

By not doing anything to stop it, we agreed to it. No options to stop it were presented, but we weren't limited to the presented options.

That answer is American propaganda, Teslas (especially earlier ones) are famous for their crappy build quality. Tesla would be nothing without the Elon hypetrain.

Chinese Teslas had higher standards early on, panels aligned and such.

Catfish effect. Ensure local players just don't become welfare queen mooching subsidy and incentives from govt both local and national.

> And China doesn't (didn't?) allow foreign companies to operate in China without a local partner at all.

This is one of the most persistent misunderstandings about China.

China had a closed, planned economy. It began opening up to foreign investment in the 1980s, but not all at once in every sector. China's general approach has been gradual, instead of the "shock therapy" that the ex-Soviet Union went through (which destroyed its economy).

China initially allowed foreign investment in certain sectors, with conditions like involvement of a local joint-venture partner. An example of this was Volkswagen building a factory in Shanghai in 1984, with the Chinese company SAIC as a local partner with 50% ownership.

Over time, the number of sectors that are open to foreign investment has increased (most sectors are now open), and the rules on investment have been loosened. For example, joint-venture requirements in the automotive sector were phased out and completely eliminated by 2022. Tesla completely owns its operations in China. Toyota has announced that it is buying out its JV partner. Other Western automotive manufacturers have taken majority stakes in their operations.

China has been moving towards more openness to foreign investment over time, not less. It does have policies like "Made in China 2025" that are intended to move up the value chain, and avoid getting stuck making low-value plastic toys forever. China wants to be like the US and EU, after all - a developed economy that manufactures lots of high-tech goods.

> China has been moving towards more openness to foreign investment over time

After they lost most of those same foreign investors that got tired of handing over their IP, the "local partnering" (what often resulted in state/court backed judgements against the foreign investors), ...

The disasters "wolf warrior" politics, combined with the above mentioned issues. And the stringent monetary policies limitation on moving money out of China did not help (translation: We want you to put money in, not being able to pull it out).

This has resulted in a reduction of foreign investment by almost 70% (given the 15 year average). What used to be easily be 200 a 250B investments per year, has now dropped to barely 100B, and is still declining.

The IP sharing issue has been massively overblown. IP sharing was relatively limited.

The European and American car manufacturers, for example, never lost their considerable competitive edge over their Chinese rivals. In the end, it was an entirely different technology - electric cars - that allowed the Chinese to leap-frog the legacy car manufacturers, and not because of IP sharing, but because of Chinese R&D in battery technology.

> This has resulted in a reduction of foreign investment by almost 70% (given the 15 year average). What used to be easily be 200 a 250B investments per year, has now dropped to barely 100B, and is still declining.

Foreign investment in China peaked in 2022. The reasons for the decline are cyclical (not just because of China's internal economic situation, but because of international factors like the hike in US Federal Funds Target Rate since 2022), not because China suddenly started demanding IP sharing or suddenly changed its currency rules in 2022 (none of which happened).

>The reasons for the decline are cyclical.

What a nice exercise in public relations.

I really do not want to respond to this but your information is so wrong, and clearly off.

Foreign investment was already in a down trend from 2013, investment kept somewhat stable in the 2015-2019 periode. Until a little unknown virus hit the world, resulting in a total shutdown / disrupted market.

There was a peak in 2021 as of the resulting reopening of the Chinese market, you know, kind of hard to do business when your companies employees need to spend a month in a hotel in quarantine. So there was a strong recovery in those years, a known effect from the 2020 pandemic and the eventual recovery.

I do not even know where you get the peak in 2022 when it was 2021. 2022 was barely on the level of te 2015-2019 periode. In 2023 it ended up crashing to 1990's level of investment.

And has been a negative FDI for the past 3 years. That means more investment is being pulled out of the country, not in anymore.

So unless you want to dispute macroeconomic data, your information is highly off. I am not even going to touch the whole IP comment "massively overblown" as there are plenty of reports on how it absolute not overblown.

No offense but your comments read like a propagandist. I let the readers make up their minds, as my information can be easily google on.

> Foreign investment was already in a down trend from 2013, investment kept somewhat stable in the 2015-2019 periode. Until a little unknown virus hit the world, resulting in a total shutdown / disrupted market. [...] I do not even know where you get the peak in 2022 when it was 2021.

You're just wrong about this, as you can see by looking at a chart of FDI into China: [0]. The story from 2013 to now is not "downward trend." 2013 was a peak year. Then FDI declined through 2017, before generally increasing until 2021, when it reached its all-time peak. You're right that I got the year wrong: the peak was in 2021, not 2022. But the story you've told of there being a steady decline since 2013, due to foreign companies not wanting to share IP, is just completely disproven by the chart. It also doesn't make sense based on how Chinese IP sharing policies have changed over time - they have been rolled back in the last decade, not increased.

There have been huge changes in the world economic outlook and in financial policy since 2022. The US ended the zero-interest-rate policy in 2022, which has huge implications for global monetary flows.

> No offense but your comments read like a propagandist. I let the readers make up their minds, as my information can be easily google on.

Yes, readers can Google it (or look at the World Bank data below) and see that the story you're telling is just plain wrong. People in the US are exposed to such a crazy level of constant fear mongering about China that any kind of moderating comments are seen as propaganda.

0. https://data.worldbank.org/indicator/BX.KLT.DINV.CD.WD?locat...

What about the suez canal or iranian oil fields

What about them? The claim, or rather implication, was that Western powers would never allow equivalent protectionist policies, such as preventing the export of key industries and skills, to be enacted by other countries. Yet such protectionism is routine in China (and many other Asian countries), and "whole hell" did not break loose.

A few more than half century old examples don't change what we can all see is the case in the present day.

The British, French and Israelis literally went to war against Egypt over the Suez.

They only backed up when the US told the Brits and France they would tank their economies still on US life support.

And, pray, why did the Machado win the hypocrisy prize on Friday? Why are American ships outside the waters of Venezuela?

>The British, French, and Israelis literally went to war against Egypt over the Suez.

The British and the French were concerned about the Suez, but Israel was not dependent on the Suez and went to war over their navigation being blockaded by Egypt in the Gulf of Aqaba and the Straits of Tiran, which was a violation by Egypt of maritime law. Aqaba is in the Sinai peninsula which is also bounded by the Suez.

https://en.wikipedia.org/wiki/Israeli_passage_through_the_Su...

I don't see how Egypt's claim against Israel was wrong.

The waters have been internal waters literally for three millennia (or more) until foreigners came in and built a canal connecting what is actually a very narrow gulf to the Mediterranean.

Foreigners come in, unilaterally build a canal and now the locals lose national sovereignty over their waters?

Also, why does Egypt have to agree to the freedom of navigation of a state it did not (at the time) recognize?

Furthermore, why must Egypt agree to the laws of freedom navigation it did not sign?

The answer, of course, is that there is no such thing as international law, or a "rules based order". There's only power makes might.

you are talking about the Suez and Israel, and it seems that you didn't read what I wrote

> The British, French and Israelis literally went to war against Egypt over the Suez.

> They only backed up when the US told the Brits and France they would tank their economies still on US life support.

But they did back off. The US was willing to stand up for Egyptian sovereignty even against their own allies. That isn't an example of non-western countries being unable to enact protectionist policies, it's an example of the opposite.

Stand up for Egyptian sovereignty? The U.S. unseated the UK as one of the dominant forces in the region and controlled the Middle East ever since.

I suppose installing el-Sisi is also an example of protecting Egyptian sovereignty:

https://www.cato.org/commentary/ten-years-after-coup-us-stil...

The article is about Dutch, that is European, piracy under the pretense of sovereignty.

My example is about European piracy under the pretense of that foreign ownership supersedes sovereignty.

That is to say, hypocrisy.

The US' role was, of course, hypocritical. I mention it only to illustrate that even the US found the european actions blatantly imperialist.

> The article is about Dutch, that is European, piracy under the pretense of sovereignty.

> My example is about European piracy under the pretense of that foreign ownership supersedes sovereignty.

The British and French did something wrong 70 years ago and the world called them out for it, therefore it's hypocritical for the Dutch to call out a similar wrong thing being done against them now? Nonsense.

Venezuela has threaten war against their neighbours. Maybe a little bird told their president to do so [1], but still...

[1] https://www.latintimes.com/nicolas-maduro-losing-it-venezuel...

Sure but can we just all drop the pretense that sovereignty and property rights mean anything. The only thing that really matters is power and how you get it. You can do protectionism if you are powerful, you can take whatever you want if you are powerful, etc etc.

"The strong do what they can, the weak suffer what they must" has been written down as geopolitical reality by Thucydides around ~400BC [1].

For some reason, over the past few decades the powerful countries from the West employed rhetoric to suggest that their actions are guided by principles and morals. That was most likely a reaction to a huge wave of anti-colonial revolutions and national liberation struggles that tore the Western empires apart. However, USA and Israel have taken off the mask over the past 2 years, and that weasly rhetoric is now over.

[1] https://en.wikipedia.org/wiki/Siege_of_Melos#Melian_Dialogue

It looks like that to do it, first, you need to have some atomic bombs.

But talking seriously, the OP didn't say that other countries never do it. Just that the powers have innumerable examples of coups to knock out governments that do this. A lot of them were democratic and popular governments.

They are controlled by their respective governments, but realistically that power is limited, because they know that "Western" powers would wage war if necessary. So in reality there is a tacit understanding between corrupt local governments and foreign powers to keep access more or less free.

> because they know that "Western" powers would wage war if necessary.

Why do you feel the need go single out "the west"? I mean, where do you think the container ships crossing the Suez go to and come from? Do you think that the likes of China would be totally ok with their main trade routes being severed and instead having to go all the way around Africa?

You're framing things as if there's still a British empire syphoning the economies of their colonies all the way from Great Britain, with no one else involved or committed to any trade whatsoever.

Maybe not so much the Brits, but the French still have exploitative relations with their African ex-colonies; look up the CFA franc.

> (...) the CFA franc

Why do you think this is relevant in discussions over who would respond to shutting down the Suez canal? I mean, do you have a map?

That's only one of the topics in this thread, it's about western (colonial) involvement elsewhere in general. Just have a look at the line of parents of this comment; you were the only one who reduced it to the Brits. I was directly replying to "as if there's still a British empire syphoning the economies of their colonies all the way from Great Britain", and the French are another, similar, Western power that's still doing that; they are also being talked about in sibling threads. Finally, questions like yours derail the discourse much more than comments like mine.

China wouldn't wage war to do so though, at least not openly, it's not their style.

Hell they're explicitly exploring using the northeast passage to bypass the Suez.

> And China doesn't (didn't?) allow foreign companies to operate in China without a local partner at all. So I don't see the irony - everyone practices protectionism, some are just more subtle about it than others.

And the west always said that China is bad for doing it.

That’s the irony part.

It’s not ironic. The Chinese are engaging in this behaviour, while they have had full access to western markets, arguably detrimental to the west.

So now Europe are doing the same thing.

and that action is perfectly fine. But it is then hypocritic to claim one is more justified than the other

> and that action is perfectly fine. But it is then hypocritic to claim one is more justified than the other

Not really. Everyone was extending courtesies to China, but China opted to unilaterally reject the notion thay others could receive the same benefits they were enjoying. Now you're seeing this sort of courtesies being pulled for the first time. And you opt to frame this as hipocricy?

No one is clean in this. Now, the thing is that China did not allowed all companies in and after 10-20 years said: yeah, now you need a local partner. It was like this from the beginning (and it is not the only country in the world that required this, to have a local partner with 49 or 51 percent stake in the company). So all the companies that rushed into China were aware from day one that they need to share technology and know-how with the Chinese.

I think the question is: did China ever took over a foreign company because "national security" or whatever perceived risk?

The West is relatively clean at least in this; they had fair and open terms for China which were not reciprocated.

Even those 'local partnerships' in China were not above board - they existed to steal the intellectual property from the partnered Western company.

It seems the only thing that can be nailed down are 'consumer brands' which are difficult to duplicate.

[1] https://www.planetizen.com/node/47241

At least in the context of trade over the last 35 years, there has been an imbalance.

As for 'Arbitrary Rules' - it's a fair claim and the US, EU etc. need to establish clear and fair terms. So should China, India, Brazil, everywhere else.

It’s ironic. China just did it first. I can’t call something wrong and then to the same.

If, for instance, we call out China for surveillance of their citizens and then start doing the same, isn‘t that ironic?

I can, if someone assaults me I'm either running away or swinging back. We gave them access to our markets, they didn't give us access to theirs. What this is is just "playing even".

This is not the same as surveillance, that's internal affairs. This is external affairs.

> And the west always said that China is bad for doing it.

"The west" criticizes China because the ruling regime imposes a series of arbitrary restrictions to foreign companies, including outright banning them, while demanding that Chinese companies should have unrestricted access to foreign markets.

You are now faced with an exceptionally rare event where a member of "the west" enforces restrictions that are similar to the ones China broadly imposes on foreign companies, but does so on an isolated incident. And you call that irony.

We‘ll see how rare and isolated this is will be.

Beware of the beginnings.

> We‘ll see how rare and isolated this is will be.

Why do you presume this is bad?

If it’s not bad why calling out China first doing it?

If it’s bad why doing it?

When you realize the game is completely rigged, you have to stop playing it.

We would like for western companies to be able to operate in China the way we let Chinese companies operate in our nations, but since China don't want to reciprocate and want to play an unfair game, the only real option is to level the playing field - if China wants to make the rules, lets take those rules and apply them domestically to. We should:

* Require Chinese companies to have a domestic partner.

* Selectively enforce (or rather ignore) IP when infringing on Chinese IP.

* Force IP transfer as a condition to access our markets.

* Require Chinese visitors to tell the police where they're living.

* Many more policies which are unfavourable to the Chinese.

China, chief hypocrite, will of course complain about anything which discriminates against China abroad, while doing exactly that thing at home.

Because it will start a tit-for-tat type of cycle. That is why.

The comment chain is saying that the west does the same thing and China criticizes them for it. This is both ways and it's hypocritical.

"enforces restrictions that are similar to the ones China "

No; the restrictions the West places on Chinese companies are not remotely comparable in proportionality or form.

But worse - China does not just have the opportunity to operate in the West in an asymmetrical fashion, but they're fairly aggressively openly stealing intellectual property etc., not just as a matter of 'national security' but as a matter of normal business operations.

The Chinese government operates police stations in foreign countries to surveille and oppress local citizens of the Chinese diaspora, and to coordinate activities.

There are always geopolitical shenanigans, but the West acted in roughly good faith inviting China into the WTO and was happy to play by some reasonable set of rules.

It's fair to use the label 'hypocritical' for what seems like arbitrary action in the West, but it's not truly arbitrary because it's a reaction to what was lack of good faith at least on the terms that were understood, and the term 'hypocritical' could be used tenfold in the other direction.

Also - even if everyone was playing roughly fair according to their own competitive advantages, the imbalances in some areas would be so problematic that there would have be some kind of reckoning anyhow.

The terms need to be reset, capital flows need to be adjusted, the USD cannot maintain such a high ranking position if they don't want to import, vast offshore tax shelters need to be shut down. Dubai is 'Mos Eisley' on Tatooine it's really just bad money.

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