There's no free market in China. The government is pretty strict in banning foreign enterprises (that can only operate in China if they're co-owned 50% by Chinese) in order to develop local companies. So basically restricting the more powerful player and empowering the less powerful one. That (i.e. non-free markets) has worked wonders for them.
To me, the free market is best represented through market competition. Can anyone comment on how competitive the chinese markets actually are because I have heard that it is still very government/single company dominate focused.
These companies are successful inside China but if actual free market competition was allowed in the communist country, they would have hard time competing with US counterparts imho.
The free market is a two way thing. What, you wanna allow a totalitarian regime to have it's companies operating in your soil while expanding their influence?
This situation should've been stopped a while ago, China banned every company they wanted while the others let them operate everywhere according to the free market rules.
I don't think there are ownership restrictions in this economic sector, and the Chinese government hasn't seized Alibaba, Tencent or Huawei. It sounds like you're talking more out of preconceived biases than actual knowledge of how business works in China.
US companies like Meta, Google, are banned in China. Chinese companies are not banned in the US. US investors are barred from making controlling acquisitions of Chinese companies. Chinese investors are free to gain ownership in any US company they like.
The rest of the world is generally playing on a level globalist playing field of free trade and open competition. The theory for decades has been that if the world treats China like every other country and then over time they will become more open. But this theory has been disastrously wrong. China’s communist party is a mercantilist country where the government and private industry act together as one.
True there’s no right to a market. At the end of the day they can impose any rules they like and it’s up to companies to accept them or not.
But don’t make China look like a sad puppy who needs help. It’s a ferocious tiger (good for them) whose economic and military prominence would scare me and everyone who likes free speech and non authoritarian rule.
Where did you find that Chinese government forbids foreign companies to buy Chinese IP? Market is fair, someone wants to sell, someone has the money to buy, this is how business is done.
You are confusing Chinese companies with Chinese government. In most areas, whatever restrictions/laws on foreign businesses, are also put on Chinese companies (private). Most foreign companies lost Chinese market due to fierce competition from local counterparts, not any imaginable barrier. Back in 2000s, Chinese government even gave green light when Huawei tried to sell [ref] itself to Motorola, but only been turned down by the American side, and in the past few months Huawei ascends from nowhere to the #1 target of US spy agencies. See the irony?
China limits all foreign companies from accessing it's market. The true reason is to provide a safe heaven to allow local companies develop it's own technology and capability before killed off by foreign companies. During 80s when China is start to open up the market, China has literally no private enterprises with good capability on it's own. Foreign companies from US and Europe have too advanced of technology and scale simply because they have been developing much longer while China was being war ravaged. These companies would easily take over the china market and kill any local enterprises. Look at the affect of the ban, China now as pretty good technology on it's own and local companies with the scale that can compete with foreign companies. Foreign companies now entering China find difficulty partly because of the regulatory environment but also because of local competition is much stronger. I would argue that Apple sales decrease in China is not mainly from regulation but competition from Huawei xiaomi and oppo. Now contrast this with Europe and Canada, especially in the tech market, no one has home grown technology companies that are big enough to compete with the US. Many homegrown companies went away because of it cannot compete with the US. Is would surely damage local economy right? I think the advantages and disadvantages to free market must be carefully balanced.
China is very protective of its market, especially services. They have their own stuff - Baidu instead of Google, Alibaba instead of ebay/Amazon, etc.
Most foreign companies are forced to pair up with local Chinese companies. The transfer of IP is "included in the price of access to the market", to put it mildly.
There are significant limitations when it comes to foreign participation in Chinese stock markets.
Also, China now runs 4 of the world's 5 biggest banks.
free market where if i want to invest into a Chinese company i have to invest into a fake company in the Bahamas? If i want to really invest into China there are crazy rules and in the end they will just take your ip...
The free market has never existed in an unregulated state, and since the founding of the country there have been rules and regulations on imports and what companies can operate in the United States and under what circumstances.
It was framed as a moral argument by suggesting the US should be “better”. At least that was my interpretation. I don’t think arguing from a market perspective really changes that interpretation but instead further weakens China’s lack of allowing American social media companies to operate in China with the same unfettered market access.
> If you want to talk precedent, China has pretty aggressive domestic ownership laws for foreign subsidiaries, but we don’t care about that in the other way.
We kind of care and we have been caring more. The problem is that legally it has been difficult to say “go ahead and build or operate your business in the US except if you are China”. Likewise China just blanket applies the rules that it has to entities that want to operate in China.
> Of course it’s a win win for both parties so by cutting off our own foot it indeeds also hurts the other party.
So far from what I’ve seen these types of actions have been very specific and targeted. In the case of Tik Tok there isn’t any loss to citizens and letting it continue to operate with impunity in the US brings all sorts of negative externalities that the market isn’t equipped to solve.
It’s also important to remember that some things are more important than profit. The economy and market are just one aspect of a nation. Lowering cost and increasing competition are nice but they are not the point of civilization.
Are you suggesting the Chinese market is more competitive due to the government being big enough that companies in the market have to exist in an impartial regime? This isn't the impression I get from many other sources.
Perhaps in a free, highly competitive market. But that doesn’t seem true in a state-controlled market like Chinese IT, where collaboration with the government is required. The CCP is free to pick winners and losers, intrude and interfere with little recourse for the companies who disagree with their decisions or end up on the wrong side of them.
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