Re:TikTok’s Chinese owner offers to forego stake to clinch U...
by DiogenesKynikos on Sunday August 02, 2020 @03:19AM
(#24026996)
China has been sequentially reducing JV restrictions on different sectors. The last restrictions on car manufacturing have been phased out over the last three years. As I said, Tesla is an example of this.
It's silly to complain that the American market was open to Chinese investment, while the Chinese market used to have JV requirements. China had no capital to invest. Investment flowed entirely in one direction. It didn't matter to China that the US was theoretically open for direct investment. US companies made huge profits by investing in China, but not vice versa. Around 2014-15, Chinese investment abroad began to pick up, but the Trump administration has essentially closed the US market to Chinese investment, and Chinese FDI in the US has gone basically to zero.
Complaining about how the poor old US is getting exploited by China - with its former JV requirements - is completely out of touch with reality. American companies made enormous profits off of investment in China.
As China has developed, it has removed JV restrictions from most sectors of the economy. Whether some level of protectionism is good for developing economies is a debated topic, but the WTO allows greater leeway to developing countries. Developed countries would obviously benefit more if every developing country removed all conditions on foreign investment, but developing countries would probably suffer.
It's silly to complain that the American market was open to Chinese investment, while the Chinese market used to have JV requirements. China had no capital to invest. Investment flowed entirely in one direction. It didn't matter to China that the US was theoretically open for direct investment. US companies made huge profits by investing in China, but not vice versa. Around 2014-15, Chinese investment abroad began to pick up, but the Trump administration has essentially closed the US market to Chinese investment, and Chinese FDI in the US has gone basically to zero.
Complaining about how the poor old US is getting exploited by China - with its former JV requirements - is completely out of touch with reality. American companies made enormous profits off of investment in China.
As China has developed, it has removed JV restrictions from most sectors of the economy. Whether some level of protectionism is good for developing economies is a debated topic, but the WTO allows greater leeway to developing countries. Developed countries would obviously benefit more if every developing country removed all conditions on foreign investment, but developing countries would probably suffer.