China Will Inevitably Lead World Trend in World Market


Bloomberg says in its report “Is Xi a Threat to Foreign Businesses in China?”, “Multinationals say they feel less welcome in the world’s second-biggest economy”. However, according to the report, “Xi’s policies tread a well-worn path laid down by his predecessors.”

Since China began its reform and opening-up, it has restricted foreign joint venture partner’s equity holding to less than 50% and required joint ventures to provide advanced technology, export products or produce import substitutes for imported goods. Wholly foreign owned enterprises have to prove that their technology is advanced before they are allowed to set up in order that China may learn from the technology. For more than 3 decades, multinationals must have got used to that.

To make money in China, they have to give China something. It is clear to them that Chinese policy makers would never allow China’s reform and opening-up to enable foreign domination of Chinese economy. They were happy about that in the past but unhappy now. Why?

Unexpectedly, China has grown rich and strong very fast. Now China will use the technology learnt from foreigners and developed by its own to take market shares from them whether at home and abroad.

The report says China’s Made in China 2025 program will make China competitive in 10 years in 10 industries including aircraft, new energy vehicles, robot, electronics and biotechnology.

China has been providing and will provide preferential treatments to those industries such as government subsidies, low-interest loans, tax waivers and rent-free land and even pressures domestic entities to buy only from Chinese suppliers.

China has developed C919 narrow-body airliners and will soon supply it to the market and has been developing CR929 wide-body airliner jointly with Russia to compete with Boeing and Airbus.

The report says China plans to raise domestic robot market share from 31% last year to 50% by 2020. China has earmarked $150 billion in spending over 10 years to boost its electronic industry in order to reduce import and increase export of chips.

The report quotes Gao Zhikai, an investment banker with Morgan Stanley and its joint venture China International Capital Corp, as saying, “China is one of the world’s largest countries looking at population size, Internet users, mobile phone users, and other aspects. It is now the time for China to lead global trends.”

Comment by Chan Kai Yee on Bloomberg’s report, full text of which can be viewed at https://www.bloomberg.com/news/articles/2017-10-12/is-xi-a-threat-to-foreign-businesses-in-china?utm_source=SupChina&utm_campaign=fc193ae567-20171013-398+ChinaSaysEUUnderstandWTORules&utm_medium=email&utm_term=0_caef3ab334-fc193ae567-164862477

Advertisements

3 Comments on “China Will Inevitably Lead World Trend in World Market”

  1. Joseph says:

    Considering the behavior of the so called multinational companies in China, Xi’s actions are justified. What these companies want is to do dodgy business in China while being protected as ‘Westerners’. Well, the era of Asian governments in Western companies payroll is over. Not that those companies behave properly anyway. In 2008, New Zealand’s Anchor practice of cheating protein contents in milk with melamine caused the tainted milk scandal. Australian mining company BHP tried to encourage corruption and damaging price fixing in a blatant bribery that was strictly illegal to Chinese laws. Then another Australian company Bluescoop sold dodgy steel rails that caused accident on Chinese high-speed train. Another Australian company Crown casino blatantly tried to promote gambling and scammed wealthy Chinese on gambling when gambling is clearly illegal by Chinese laws. American Walmart tried to introduce semi-slavery American working conditions which was illegal under Chinese laws. British pharmaceutical giant GSK tried to encourage Chinese doctors to exploit Chinese patients by prescribing unnecessary GSK medicines at inflated prices. GSK even tried to encourage Chinese doctors to perform unnecessary surgeries, which are common in UK, so the doctors could charge GSK surgery materials to not-sick patients. This kind of behaviors are common in heavily-lobbied Western countries and countries which leaders are under these companies’ payroll. But it is illegal in China and increasingly in other Asian countries. If not regulated, these companies would do untold damage in the countries they encroach on. The obligation of a leader is to serve the interest of the people, not Western companies. If it makes him to be hostile to the law-offending Western companies, then so be it. So what Xi Jinping has done to Western business is proper and just. There are many other proper law-abiding foreign companies too that do not feel unwelcome. Now it is up to those Western companies to be good law-abiding entities. They just have to cast away that ‘we as Western companies are above any local laws’ attitudes.

    Like

  2. Steve says:

    Can be referred to as ‘ protectionism within globalisation’ – Chinese ingenuity. Reasons why Chinese are highly efficient, methodical, meticulous and hardworking.

    This framework denotes clever political and strong business acumen, accelerates strategic execution for the benefit of the nation’s economic reform and innovation.

    Like