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Protectionist is a good way of describing it. The general strategy in China is to handicap foreign corporations sufficiently so that domestic competitors can es
by chatmasta 9y ago
Protectionist is a good way of describing it. The general strategy in China is to handicap foreign corporations sufficiently so that domestic competitors can establish a foothold in the market before the network effects of foreign companies become stifling to new entrants.
This is especially true of tech companies. Chinese Internet censors degrade the quality of major US corporations so much that their products are nearly unusable, thus opening opportunities for domestic competitors. We’ve seen this play out with Google/Baidu, Facebook/Weibo, Uber/Didi, Amazon/Alibaba, etc.
Most people see the Great Firewall (GFW) as a tool for suppression of political dissent. However it also serves as an effective tool for economic control, protectionism and favoritism. In college I took a class called “The Next China,” where I argued in my final paper that the GFW serves primarily as a tool for economic control, and only secondarily as a political tool. Realistically, there are arguments to be made that maintaining the GFW is in the best interest of the Chinese state, its economy and its people. It has certainly benefited them so far, as China now has a thriving domestic economy that is becoming more vertically integrated and service-driven every day.
Before anyone gets too upset about this, consider that the US often does the same, albeit on more of a regulatory level than a political one. Some examples are import taxes, financial compliance requirements, and upcoming data regulation. These all serve as tools that implicitly favor domestic companies over foreign ones.
- Chaebixi 9y ago> Protectionist is a good way of describing it. The general strategy in China is to handicap foreign corporations sufficiently so that domestic competitors can establish a foothold in the market before the network effects of foreign companies become stifling to new entrants. They also dangle the carrot of access to their market in front of Western companies in order to encourage up-front technology and skill transfer. In the end, it's only to benefit their domestic companies as the western ones are eventually hobbled and shut out.