Any non-Chinese company that insists on tying its fortune to the Chinese market is taking on tremendous risk. The goal posts are always changing , you need to constantly worry about IP theft, you can easily get on the wrong side of the government, and they strongly protect local interests. Investment is welcome, but as soon as you actually start making a lot of money and recouping your investment some barrier of sorts is bound to appear and you'll be phased out in favor of a local player. This is going to come back to haunt China at a time when growth is slowing and when they are going to need investment the most.
> "This is going to come back to haunt China at a time when growth is slowing and when they are going to need investment the most."
The market has a short memory. China can act this way for as long as it is profitable. As soon as it starts to hurt them, they can stage a 'revolution' and after a few years of playing nice, all will be forgiven. That's what scapegoats are for, transferring sins.
Not entering the market is also a risk. Say you're an app developer and you don't publish your app on Chinese app stores, chances are someone else will do it anyway and steal the revenue. Good luck finding it and getting it taken down. (Off course chances are it'll still be stolen even if you publish it yourself there)
Chinese don't care about the global Capitalist class. Chinese care about China. It's the way it should be. South Koreans also don't care about the foreign Capitalist class and neither do the Japanese. The only reason they allow foreign investment is for market development and perhaps to get some corporate know-how and secrets.
Chinese don't need the money, most Chinese can get the loans from the government based on half-lies according to a Chinese friend of mine.
In America the Capitalist class also plays by its own rules. They will steal an idea, pump it with money, then dump it on the public... and walk away with billions. While the product lasts maybe a year or two. Bad CEOs are blamed and the cycle repeats itself. US government steals secrets and gives them to major corporations, can be proven, etc.
Honestly, people are simply rooting for their own team. The rules that they play with always favor some party which has power in whatever country. If they don't the country is corrupt and not prospering.
You may search what happened to Microsoft's Chinese business, especially the sales of Windows, and their partnership to China Electronics Corporation. And why companies like NASDAQ: SINA ,NASDAQ: PWRD must use a VIE structure. Whenever there is a rule, there is a way to legally bypass it.
Sounds like the normal thing in China. Make something illegal, don't enforce it, if someone's saying something you don't like then enforce it specifically against them, keeps everyone else in line.
"Did you really think that we want those laws to be observed?" said Dr. Ferris. "We want them broken. You'd better get it straight that it's not a bunch of boy scouts you're up against - then you'll know that this is not the age of beautiful gestures. We're after power and we mean it. You fellows were pikers, but we know the real trick, and you'd better get wise to it. There's no way to rule innocent men. The only power any government has is the power to crack down on criminals. Well, when there aren't enough criminals, one 'makes' them. One declares so many things to be a crime that it becomes impossible for men to live without breaking laws. Who wants a nation of law-abiding citizens? What's there in that for anyone? But just pass the kind of laws that can neither be observed nor enforced nor objectively interpreted-and you create a nation of law-breakers and then you cash in on the guilt. Now that's the system, Mr. Rearden, that's the game, and once you understand it, you'll be much easier to deal with."
--Ayn Rand, Atlas Shrugged
Selective enforcement of laws in very common in many countries. If they enforce is too harshly then people will protest. For example exceeding the speed limit while driving.
Just like the way many companies work with regard to behavior policies (recreational internet browsing, showing up on time, etc). You know, to engender trust, respect, loyalty.
This is pure insanity: "Quartz contacted the Ministry of Industry and Information Technology from Hong Kong asking for further clarification on how the rules would work, but the ministry said it could only reply to faxed questions that came from a reporter with a mainland press card."
I see it here in the US as well. "We only accept queries by email and will reply within three to five days" or "It will cost $1 per page to print" etc.
The government censor in New Zealand wants web sites to submit their material, item by item, to the censor's office for approval.
Australia and the UK already have firewalls that filter all Internet traffic which "my bad, so sorry" seem to keep "accidentally" including all sorts of sites their backing legislation doesn't justify (at least as far as anyone can tell - the Australian government list is confidential). The UK is trying to roll out laws requiring all citizens to register with the government to view R18 material.
They are cutting off the foreign news outlets. If you aren't a mainland Chinese journalist with a press card of that nature they no longer have any interest in your opinion.
Why bother replying to people you don't care about?
I am not a sociologist, political scientist, or an economist. It appears that China is too big to govern and has become a diseconomy of scale. China has 160 cities with over 1-million people in them (US has 10 cities) and I think it's a miracle that the lights still work and they have running water.
When you double the size of a plane it it becomes 4-times heavier (Observe what it takes to fly a B-52).
The PRC seems to be circling the wagons to protect from some unknown enemy that the free flow of information will allow the arrows to strike.
The population wasn't as big, but without modern technology the history of Chinese national governance is likely better than any other region in the world. From around 250 BC to 1911, the Chinese usually had effective national government which made China a world leader economically, culturally, and technologically.
(There are many caveats: 1) During that time there were periods of civil war and division also; 2) the geographical area defined as China varied quite a bit; 3) I use the word "usually", but I don't know the percentage of time stable, effective government was provided; certainly there were many successful emporers and dynasties.)
China has historically been too big to govern. Few regimes over the last 2500 years have managed to hold any major portion of what is modern day China under a single rule for any amount of time. While the PRC may make token shows of aggression on the world stage, all of their arrows are really pointed inwards.
It's no miracle, the bureaucracy is as huge as the cities. Even in a shit tier city like Zhanggong, Jiangxi they employ hundreds of people to monitor social media. I imagine the number of people employed for things that actually matter must be many thousands.
Historically, too big to govern would apply not to the number of citizens but to the time information needed to cross the empire.
Hence the famous Rome roads, the Nile for the Egiptians or the excellent communication system of the Incas (there are quite a few other examples) that made those empires possible.
China might have been historically to big to govern with some stability, but with the high speed communication networks of the present that might have changed.
Not that it's your main point, but I think B-52 has 8 engines because they're an old design. They're about 10,000 lbf each, while the engines in new planes provide more than five times the thrust, so two 787 engines are stronger than ten B-52 engines.
It's odd between mainstream media talking about how China is becoming the main power ignoring structural issues of that kind. But that's only a 'theory' so far, how to know if China will evolve into tumor or functioning organism.
If nations had institutional-DNA I'd say modern China has probably inherited at least a few traits that aided its sprawl-prone predecessors. (Whether they'll be enough for modern challenges is, of course, another question.)
China's leadership seems to be becoming more paranoid. Yet China has no serious external enemies other than the ones they make for themselves, the economy is stressed a bit but production is in great shape, and the standard of living has been rising for years. Why?
Chinese most fear a civil war. Nearly 10 million people died during the last civil war, the one before that 36 million people died. One before over 25 million. compare that with the absolute carnage of Syria which has taken 300,000 lives so far. The scale of disaster will be uncomparable to anything else if another civil unrest happens in China. We like to call them paranoid, but their paranoia isn't baseless.
If you control the populace's view of the outside world then you can turn foreigners into anything you want them to be: monsters, war mongers, greedy capitalists intent on collapsing your economy and taking away the dream of prosperity, etc.
China has too many single men who will never know marriage and who present a huge threat to their society. It is better to point the tip of that spear in a different direction through tightly controlled propaganda. War, cold or hot, is on the horizon.
I remember 5 years ago, most outlets had very pro-China things to say. Now it's undoubtedly taken a very negative turn. Daily stories about China's impending economic collapse, their various 'crackdowns', and so on. Even this article. To be honest, half of the stuff they want to ban isn't even allowable in Canadian media (literally, 3 out of 6 bullet points are strait up illegal in Canada), and we're hardly a totalitarian state.
But when western media and NGOs are stepping up the propaganda and support for violent secessionist groups (Occupy HK took a violent turn recently, some Uighur groups are strait up terrorists with US support), China has to do something. A collapse would be catastrophic, yet that's exactly what the US government is trying to achieve (as evidenced by Syria).
Edit - Anyone want to address these points? Or is the propaganda working too well?
>Yet China has no serious external enemies other than the ones they make for themselves
Except tons of western interested parties, you mean, who would be very glad to see the regime go, and be able to freely plunder the country a la Yeltsin's Russia.
My brother in law lived there for years and claims that the general sense is that if the leadership can't maintain at least 5-10% GDP growth forever they will lose favor. People there are very unsatisfied with the government but they're also afraid of revolution. Paranoia seems a good description of the government's mentality.
Well, ever since the change of government China has been closing back on itself again and censorship has been stronger and stronger. It's not surprising and tells me I made the right choice to leave the country in 2013...
Xi Jin Ping is worse than King jong un. He is a stupid and arrogant leader. He want people in China to call him "习大大(xi big big)", but actually we like to call him "习包子(xi bao zi)"
Any move China takes that blocks foreign competition can be seen as an extreme version of an import tariff. Instead of protecting low level industries like corn producers either subsidizing domestic production or taxing foreign imports, China focuses on higher level industries like technology companies, culture companies, etc.
While China doesn't have the benefit of Google in the short term, by blocking them it gives it a chance for local companies to develop the technology and catch up.
Also take the example of TOMs shoes giving away free shoes replacing local markets and producers. These poor countries of weak governments, and even a small foreign company can impact the local the economy in uncertain ways. http://www.economist.com/blogs/freeexchange/2014/10/economic...
If you can understand this you can understand the viewpoint of Chinese officials. We come in with the viewpoint of "how can I have my fair and equal opportunity to extract wealth from China" while the capitalists in China are thinking "how can I extract wealth from China and prevent the foreigners from doing so." In reality the playing field isn't level. Our counterparts in China don't have the same education, quality of life, and financial status. Therefore a foreign company with foreign talent would already enter the market with an upper hand. By the time local companies are ready, they'd be fighting an uphill battle against foreign incumbents, or worse yet, not develop at all.
If you're familiar with Star Trek, there's the concept of the Prime Directive. It's principle is that the developed races must never contact or interfere with an undeveloped race because doing so would alter their natural development.
Foreign companies don't have an inherent right to the Chinese market. If they feel they do, or want to enter, it's because they feel there is profit in it. The profit comes from exploiting the opportunity in the local market, and in an underdeveloped market such opportunities are ripe. This isn't exactly fair if mature companies are allowed unfettered access.
This isn't about money or protectionism. This is about information control. The government states what they wish the truth were as if it were true. This is not believable if there is other evidence, or even a broad discussion. Hence, viewpoints contrary to the government's "truth" must be stamped out.
Apparently Xi's predecessors did not think this was as important, but Xi seems to be old-school.
I do not think this is a good idea for China or the government. It seems like the government only has one solution for a problem: more control. More control is like pressurizing a container. The more pressure you put, the bigger the explosion when the container eventually ruptures. I don't think this is in the interest of anyone in China, so I hope they rethink things before the pressure gets too high.
In the linked article regarding TOMS shoes: "While statistical significance is nowhere to be seen, by dint of their consistency the results are reasonably convincing." That's not how statistical significance works; if you don't reach it, you can't say anything about whether or not there is an effect.
The actual research paper is here: http://repository.usfca.edu/cgi/viewcontent.cgi?article=1005.... In it, the authors say "After controlling for household and parental characteristics as well as ADP-level fixed effects, we can uncover no statistically significant negative impact on shoe purchases in local markets."
I've worked for foreign publishers here in China. I've worked for foreign publishers that have been raided and shut down by the publishing bureau in China. I've continued to work for the same foreign publishers, operating essentially the same business, even after they were raided, and seen them continue successfully for more than a decade.
There are rules and there is implementation. Reality in China is not so cut and dried.
I share pbkhrv's sentiment about this possibly being a preparation for a rash of bad economic news late this year. I have it on very reasonable authority that the RMB will tank at least 15% by end of year.
The view from here in China is basically the same as ever... nobody with money really cares about foreign journalism and reporting, only food prices (steadily increasing), education (crisis), health (crisis), pollution (huge) and inflation (big). Transport is also a problem. They just try to get their money out.
The Chinese government has a difficult job. They don't really do too badly when all things are considered.
From the Chinese government point of view they have several good reasons (for them) for doing this, chief among them (in my opinion) saving face and controlling mass opinion.
When China was the huge success story it was, until recently, they were far more tolerant of criticism. Even then, the Chinese Government would clamp down very quickly on criticism. Right now their tolerance is pretty much zero. They do not want to admit or even hear that they have done anything wrong or that China has significant problems.
They also greatly fear any kind of mass action. During the boom years, with high employment and everyone happy, there was little chance of mass action. Now with entire industrial areas becoming ghost towns, high unemployment, no pensions and growing poverty, mass action becomes a real threat.
To me this looks like a big win for companies based in China. The social media companies for the billion people in China will be employing local people, and the advertising revenue will stay within China.
Not that this is the main goal of the ban though..
'This ban covers words, pictures, maps, games, animation and sound of an "informational and thoughtful nature" -- unless they have approval from the State Administration of Press, Publication, Radio, Film and Television.'
Still it's very onerous but not a complete shutdown.
If I wanted to do massive, irreparable harm to China, this is the law I would pass. And yet, they have done this willingly to themselves, without hesitation or incident.
You guys really don't know how things work in China.
As a Chinese I don't give a damn about these new ridiculous rules since we always have ways to bypass them. And theses things changes very fast in this country.
We have laws, and the way them work are different than that in western countries.
[+] [-] rdlecler1|10 years ago|reply
[+] [-] Crito|10 years ago|reply
The market has a short memory. China can act this way for as long as it is profitable. As soon as it starts to hurt them, they can stage a 'revolution' and after a few years of playing nice, all will be forgiven. That's what scapegoats are for, transferring sins.
[+] [-] gman83|10 years ago|reply
[+] [-] x5n1|10 years ago|reply
Chinese don't need the money, most Chinese can get the loans from the government based on half-lies according to a Chinese friend of mine.
In America the Capitalist class also plays by its own rules. They will steal an idea, pump it with money, then dump it on the public... and walk away with billions. While the product lasts maybe a year or two. Bad CEOs are blamed and the cycle repeats itself. US government steals secrets and gives them to major corporations, can be proven, etc.
Honestly, people are simply rooting for their own team. The rules that they play with always favor some party which has power in whatever country. If they don't the country is corrupt and not prospering.
[+] [-] snnn|10 years ago|reply
[+] [-] dageshi|10 years ago|reply
[+] [-] ferentchak|10 years ago|reply
Quote stolen from another thread:
"Did you really think that we want those laws to be observed?" said Dr. Ferris. "We want them broken. You'd better get it straight that it's not a bunch of boy scouts you're up against - then you'll know that this is not the age of beautiful gestures. We're after power and we mean it. You fellows were pikers, but we know the real trick, and you'd better get wise to it. There's no way to rule innocent men. The only power any government has is the power to crack down on criminals. Well, when there aren't enough criminals, one 'makes' them. One declares so many things to be a crime that it becomes impossible for men to live without breaking laws. Who wants a nation of law-abiding citizens? What's there in that for anyone? But just pass the kind of laws that can neither be observed nor enforced nor objectively interpreted-and you create a nation of law-breakers and then you cash in on the guilt. Now that's the system, Mr. Rearden, that's the game, and once you understand it, you'll be much easier to deal with." --Ayn Rand, Atlas Shrugged
[+] [-] chatmasta|10 years ago|reply
https://en.m.wikipedia.org/wiki/Tian_gao,_Huangdi_yuan
[+] [-] pkaye|10 years ago|reply
[+] [-] kafkaesq|10 years ago|reply
[+] [-] 11thEarlOfMar|10 years ago|reply
[+] [-] vermontdevil|10 years ago|reply
I see it here in the US as well. "We only accept queries by email and will reply within three to five days" or "It will cost $1 per page to print" etc.
[+] [-] rodgerd|10 years ago|reply
Australia and the UK already have firewalls that filter all Internet traffic which "my bad, so sorry" seem to keep "accidentally" including all sorts of sites their backing legislation doesn't justify (at least as far as anyone can tell - the Australian government list is confidential). The UK is trying to roll out laws requiring all citizens to register with the government to view R18 material.
China is just playing catch-up at this point.
[+] [-] fweespeech|10 years ago|reply
Why bother replying to people you don't care about?
[+] [-] est|10 years ago|reply
[+] [-] SCAQTony|10 years ago|reply
When you double the size of a plane it it becomes 4-times heavier (Observe what it takes to fly a B-52).
The PRC seems to be circling the wagons to protect from some unknown enemy that the free flow of information will allow the arrows to strike.
[+] [-] hackuser|10 years ago|reply
The population wasn't as big, but without modern technology the history of Chinese national governance is likely better than any other region in the world. From around 250 BC to 1911, the Chinese usually had effective national government which made China a world leader economically, culturally, and technologically.
(There are many caveats: 1) During that time there were periods of civil war and division also; 2) the geographical area defined as China varied quite a bit; 3) I use the word "usually", but I don't know the percentage of time stable, effective government was provided; certainly there were many successful emporers and dynasties.)
[+] [-] flatline|10 years ago|reply
[+] [-] clw8|10 years ago|reply
[+] [-] jbmorgado|10 years ago|reply
Hence the famous Rome roads, the Nile for the Egiptians or the excellent communication system of the Incas (there are quite a few other examples) that made those empires possible.
China might have been historically to big to govern with some stability, but with the high speed communication networks of the present that might have changed.
[+] [-] mortehu|10 years ago|reply
Not that it's your main point, but I think B-52 has 8 engines because they're an old design. They're about 10,000 lbf each, while the engines in new planes provide more than five times the thrust, so two 787 engines are stronger than ten B-52 engines.
[+] [-] agumonkey|10 years ago|reply
[+] [-] Terr_|10 years ago|reply
[+] [-] kazinator|10 years ago|reply
So there is a creature after all, even if mechanical, to which the BMI applies!
[+] [-] Animats|10 years ago|reply
[+] [-] mavdi|10 years ago|reply
[+] [-] partisan|10 years ago|reply
China has too many single men who will never know marriage and who present a huge threat to their society. It is better to point the tip of that spear in a different direction through tightly controlled propaganda. War, cold or hot, is on the horizon.
[+] [-] Mikeb85|10 years ago|reply
I remember 5 years ago, most outlets had very pro-China things to say. Now it's undoubtedly taken a very negative turn. Daily stories about China's impending economic collapse, their various 'crackdowns', and so on. Even this article. To be honest, half of the stuff they want to ban isn't even allowable in Canadian media (literally, 3 out of 6 bullet points are strait up illegal in Canada), and we're hardly a totalitarian state.
But when western media and NGOs are stepping up the propaganda and support for violent secessionist groups (Occupy HK took a violent turn recently, some Uighur groups are strait up terrorists with US support), China has to do something. A collapse would be catastrophic, yet that's exactly what the US government is trying to achieve (as evidenced by Syria).
Edit - Anyone want to address these points? Or is the propaganda working too well?
[+] [-] coldtea|10 years ago|reply
Except tons of western interested parties, you mean, who would be very glad to see the regime go, and be able to freely plunder the country a la Yeltsin's Russia.
[+] [-] api|10 years ago|reply
[+] [-] toomuchtodo|10 years ago|reply
[+] [-] sharetea|10 years ago|reply
- China's total debt risen to 346% of GDP in 2015. http://seekingalpha.com/article/3852886-chinese-debt-problem...
- China exports fall 11.2% in January, imports down 18.8% http://www.cnbc.com/2016/02/14/china-releases-trade-data-for...
- China’s $6.7 trillion bond market is flashing the same danger signs that triggered a tumble in stocks http://www.thestar.com.my/business/business-news/2015/10/10/...
- China Capital Outflows Rise to Estimated $1 Trillion in 2015 http://www.bloomberg.com/news/articles/2016-01-25/china-capi...
- China's Net Capital Outflows Probably Hit $113 Billion In January http://www.actionforex.com/analysis/daily-forex-fundamentals...
- "Chinese banks will lose approximately $3.5 trillion of equity if China's banking system loses 10 percent of assets" (all of its reserve would be gone) http://www.cnbc.com/2016/02/10/kyle-bass-china-banks-may-los...
[+] [-] song|10 years ago|reply
[+] [-] outside1234|10 years ago|reply
[+] [-] xjp250|10 years ago|reply
[+] [-] chrischen|10 years ago|reply
While China doesn't have the benefit of Google in the short term, by blocking them it gives it a chance for local companies to develop the technology and catch up.
Also take the example of TOMs shoes giving away free shoes replacing local markets and producers. These poor countries of weak governments, and even a small foreign company can impact the local the economy in uncertain ways. http://www.economist.com/blogs/freeexchange/2014/10/economic...
If you can understand this you can understand the viewpoint of Chinese officials. We come in with the viewpoint of "how can I have my fair and equal opportunity to extract wealth from China" while the capitalists in China are thinking "how can I extract wealth from China and prevent the foreigners from doing so." In reality the playing field isn't level. Our counterparts in China don't have the same education, quality of life, and financial status. Therefore a foreign company with foreign talent would already enter the market with an upper hand. By the time local companies are ready, they'd be fighting an uphill battle against foreign incumbents, or worse yet, not develop at all.
If you're familiar with Star Trek, there's the concept of the Prime Directive. It's principle is that the developed races must never contact or interfere with an undeveloped race because doing so would alter their natural development.
Foreign companies don't have an inherent right to the Chinese market. If they feel they do, or want to enter, it's because they feel there is profit in it. The profit comes from exploiting the opportunity in the local market, and in an underdeveloped market such opportunities are ripe. This isn't exactly fair if mature companies are allowed unfettered access.
[+] [-] prewett|10 years ago|reply
Apparently Xi's predecessors did not think this was as important, but Xi seems to be old-school.
I do not think this is a good idea for China or the government. It seems like the government only has one solution for a problem: more control. More control is like pressurizing a container. The more pressure you put, the bigger the explosion when the container eventually ruptures. I don't think this is in the interest of anyone in China, so I hope they rethink things before the pressure gets too high.
[+] [-] rsanek|10 years ago|reply
The actual research paper is here: http://repository.usfca.edu/cgi/viewcontent.cgi?article=1005.... In it, the authors say "After controlling for household and parental characteristics as well as ADP-level fixed effects, we can uncover no statistically significant negative impact on shoe purchases in local markets."
[+] [-] contingencies|10 years ago|reply
There are rules and there is implementation. Reality in China is not so cut and dried.
I share pbkhrv's sentiment about this possibly being a preparation for a rash of bad economic news late this year. I have it on very reasonable authority that the RMB will tank at least 15% by end of year.
The view from here in China is basically the same as ever... nobody with money really cares about foreign journalism and reporting, only food prices (steadily increasing), education (crisis), health (crisis), pollution (huge) and inflation (big). Transport is also a problem. They just try to get their money out.
The Chinese government has a difficult job. They don't really do too badly when all things are considered.
[+] [-] qihqi|10 years ago|reply
Maybe they got tired of having banned content mirrored by un-blocked IP ranges and constantly having to hunt them down.
[+] [-] SeanDav|10 years ago|reply
When China was the huge success story it was, until recently, they were far more tolerant of criticism. Even then, the Chinese Government would clamp down very quickly on criticism. Right now their tolerance is pretty much zero. They do not want to admit or even hear that they have done anything wrong or that China has significant problems.
They also greatly fear any kind of mass action. During the boom years, with high employment and everyone happy, there was little chance of mass action. Now with entire industrial areas becoming ghost towns, high unemployment, no pensions and growing poverty, mass action becomes a real threat.
[+] [-] superbatfish|10 years ago|reply
[+] [-] est|10 years ago|reply
[+] [-] MrKristopher|10 years ago|reply
[+] [-] natch|10 years ago|reply
According to this story [http://www.independent.co.uk/news/world/asia/china-set-to-ba...]:
'This ban covers words, pictures, maps, games, animation and sound of an "informational and thoughtful nature" -- unless they have approval from the State Administration of Press, Publication, Radio, Film and Television.'
Still it's very onerous but not a complete shutdown.
[+] [-] vpalan2|10 years ago|reply
[+] [-] vikiomega9|10 years ago|reply
EDIT: Context for my question is that of rule of law and how much can get away without actually having an effect at the top.
[+] [-] paulddraper|10 years ago|reply
Seems like a contradiction. Are you publishing online, or in China?
[+] [-] yuanotes|10 years ago|reply
As a Chinese I don't give a damn about these new ridiculous rules since we always have ways to bypass them. And theses things changes very fast in this country.
We have laws, and the way them work are different than that in western countries.
[+] [-] nvk|10 years ago|reply