Chinese citizens have invested a ton in US businesses, which is sort of okay. They also bought a ton of land in the US, which led to skyrocketing housing prices, and in the long term, if it continues unabated, will lead to the US paying tribute to China in the form of rents on US land. There is no upside to this. We got cheap Chinese plastic trinkets. They got our real estate. Didn't we do this to the indigenous people here once ourselves?
To be clear: I'm not opposed to being able to buy foreign land per se, but I am opposed to how one-sided this is. For the most part, US entities can't really own real estate in China (and even with Chinese entities, it's complex, but that's another story).
Not until they invade and slaughter everyone here. And no that's probably not going to happen. Hilarious that people think this way though.
This is among the dumbest arguments I've ever read on the Internet. I'm not sure if I'm not just being trolled, but it's like someone arguing Google didn't make Google Reader because they made Google Search. You can do more than one thing.
For reference:
http://newamsterdamhistorycenter.org/education/schaghen.html
But that's not the only reason it's a bad comparison. When Manhattan was purchased there was no market. Chinese are buying things at market prices. Which I was taught are fair.
But then will start the games of complicated / opaque business ownership structures allowing for individuals to own lots of real estate through different channels to make it look like it's separate entities.
And there is zero motivation from most of the world's leadership to clean up business ownership structure transparency because so many of them are ... participants.
China produces lots of manufactured goods, and sells them to the US. The US produces tons of valuable urban real estate and exports it to China. (Similarly the US produces lots of higher education, and exports it in the form of international students)
Economically, there is a fundamental difference between finite, rent-generating resources like land, and value-added goods like Chinese trinkets or international students.
Exporting value-added goods builds the economy. Exporting rent-collecting resources results in significant long-term harm to the economy.
https://en.wikipedia.org/wiki/Capital_account
Just like a business, a country can maintain short term losses by accepting outside investment, or debt. This is not necessarily a bad thing. Almost all companies take on debt and investment to fund their growth.
Also, just like a business, you can’t do this forever. At some point the debt comes due, and/or you end up selling the whole business.
Outside investment in businesses is not a bad thing. Outside investment in land is.
American policy makers have chosen policies (eg zoning law) that make it easy to produce valuable urban residences. Now they have a massive competitive advantage in high-end residences, so of course they will become exporters.
“Capable of growth” and “not finite” are not the same thing.
> there is a fundamental difference between finite, rent-generating resources like land, and value-added goods
i'm in the market for a few TEUs of US land, preferably downtown san francisco. i'll pick it up in Hamburg or Antwerp and would like a house on it.
sarcasm off - just no.
No, what we got was a new robber baron class of ultra-rich billionaires the likes of which haven't been seen since the federal government had to break up Standard Oil, etc... Which has led to extreme wealth inequality and a complete lack of access to _our fucking politics_ for the vast majority of Americans.
How is this even connected to the flow of the conversation?
Do you respond this way to everyhing? I can just imagine your household.
[Kids running in]: We got a pizza party at school!
[Parent]: No, what we got was a new robber baron class of ultra-rich billionaires the likes of which haven't been seen ...
It's not, you just read it that way.
> How is this even connected to the flow of the conversation?
One thing (outsourcing our manufacturing -> getting cheap Chinese shit in return) has clearly led to the other (the profits not trickling down through the economy -> our political parties becoming influence peddlers).
For some bizarre reason you seem really offended by what I wrote. I think that your comment says more about you than what you think it says about me. Have a good one.
>It's not, you just read it that way.
Your comment literally started by saying "No." In English, that means you disagree with what I wrote. It's followed by a comma, where in a standard English construction you would present your counterargument.
> For some bizarre reason you seem really offended by what I wrote.
I wasn't offended at all. I was a little overwhelmed by the apparent stupidity of the non sequitur response (and I use 'apparent' very deliberately -- it's possible you miswrote what you meant, or I misread it). I think this summarizes my reaction best:
You'll also have to forgive me for not responding to that specific critique until you came along, I guess. I'd have been happy to reply to that previously if I hadn't been very condescendingly talked down to about the literal definition of the word no and then told that I ran a household like an asshole, etc...
Isn't that the point of forbidding it? You can't enter the market, but neither can your competitor, so there's no FOMO.
It is the new turn to geopolitical hegemony and debt entrapment that we should be careful of, not the incredible influx of wealth that has (wonderfully!) gone to the Chinese lower classes.
Free trade, and the US leading the world charge to open up to China, is the best thing that happened to Chinese citizens.
Things are different now that the state has such an iron grip, and its own intentions, however.
And not just for doing business either, things like home ownership too. If I cannot buy a house in China (not that I'd want to pay for a Chinese house that'll last 5 years max) because I'm not Chinese then they should not be allowed buy in my country either. Vancouver, Toronto, Sydney... all have property markets destroyed by Chinese funny money.
It has to stop, but it won't due to greed. Trump is right about China
(I'm not American, don't live or work in America, and have never, or could ever, vote in an American election. Take your faux outrage elsewhere)
Then deal with the woke cries of xenophobia.
The big question is how those funds were obtained. How can locals compete with buyers who can essentially print money? Funny money. Chinese banks are unauditable.
As for printing US dollars, North Korea is suspected of doing so: https://en.m.wikipedia.org/wiki/Superdollar
If I came out I strong support the Uyghurs re-education camps, would those outraged by that be faking it simply because I have zero influence in the CCP?
I'm genuinely curious for how many companies did this short term bump in profits outweigh the long term loss by irretrievably handing over technology, business strategies, etc.
Edit for the comment below.
> legally obliged to maximise shareholder value
Fiduciary duties are not so explicitly described. A CEO must use care and be diligent when making decisions on behalf of the company and shareholders. Make choices in good faith with true belief that each choice is made with the best interests of the corporation in mind.
Hence the best interests of the corporation must be weighed between short term and long term. A CEO could argue either way that they took the decision in good faith. This is where my curiosity came from, how many of these decisions turned out to be financially successful in hindsight?
“Modern corporate law does not require for-profit corporations to pursue profit at the expense of everything else, and many do not.”: https://www.nytimes.com/roomfordebate/2015/04/16/what-are-co...
Every CEO must realise by now that they will never get to tap that market, they will hand over their IP, they will carry the cost of establishing the product or service in the country, and then be booted out with nothing. Then a few years later a heavily capitalised Chinese company will show up and start competing with them with their own IP in their home country. It's heads China wins, tails the West loses. While our political class buries their heads in the sand, or worse, colludes in return for scoring points against domestic opponents.
Was Tesla an exception? Are there others?
Regardless, I'm absolutely certain that China is exfiltrating every morsel of IP. As state policy. It's what they do.
The only interesting wrinkle to me is that Elon Musk is probably okay with the knowledge transfer. A man on a mission. Whatever it takes to get humanity carbon neutral asap.
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I'm fine with developing economies doing their thing. The notion was to nurture the BRICS countries, allow them to mature, not crush them in their cribs.
No one can argue today that China remains a developing economy. We're past time for realpolitik.
Tesla was the first auto company to take advantage of this exception, some have argued that this exception was specifically carved out to incentivize them to build the Shanghai Gigafactory
No. This is not just plain wrong, it is normally not the case. See WFOE comment.
Apple, Tesla and numerous other US companies are 100% foreign entity in China.
For hybrid, the usual cases are that they want to get government subsidies or special tax incentives.