China Will Inevitably Lead World Trend in World MarketPosted: October 14, 2017
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