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I have heard in many areas the official rule on the book has already been changed. Foreign companies are longer required to joint ventures with Chinese partner

I have heard in many areas the official rule on the book has already been changed. Foreign companies are longer required to joint ventures with Chinese partners. However, in reality it could be extremely difficult to operate without a Chinese partner. Local government agencies will just give you so much trouble that you will eventually find out that it is much easier to have a Chinese partner to deal with those issues.

westiseast 8y ago
I think this is the correct answer. State sponsored theft of highly secret commercial/military information is one issue, rampant intellectual property abuse is another (eg. in fashion or entertainment industries). However potentially larger problems are the 100% legal barriers to entry for foreign companies - censorship, onerous and expensive company formation, trademark registration, inability to operate in a hopelessly corrupt political environment, opaque legal system, legal requirements to have CCP ‘agents’ operating inside your company, local government fiefdoms that often operate beyond the law etc etc.
- baybal2 8y ago
  I can't say that being iron clad. I will not put America in ranks with them, but I think that the biggest upside of China is that it has no such insanely convoluted tax system as in America.
  - bilbo0s 8y ago
    It's not as convoluted, but it's just as expensive. That said, it's their right. I get it. Their nation, their tax rules. If I don't like the rules, I'm free NOT to start a business in China. That I understand, but to intimate that it's somehow "better" than the US is just being a little disingenuous. When it's all said and done, you'll likely pay more to do business in China. (But there's more potential upside too, so you need to take all these things into account.)
    - baybal2 8y ago
      > It's not as convoluted, but it's just as expensive. No running away from that, but you can't also run away from the fact that it is not humanly possible to profitably run a mainstream consumer electronics company outside of China. China stole the market not because it was making stuff cheaper than others, but because it was making it better than others. In the end, you end up with lower net cost of running business. > That I understand, but to intimate that it's somehow "better" than the US is just being a little disingenuous. It is better to run business in China today, and that is nothing disingenuous. I myself been in and out of electronics industry since 2007, and I can tell that not a single city ever came close in those 12 years to take the crown from Shenzhen. You can't compare USA and PRC apples to apples, but China has advantages that America has no analogues for, or just anything to compare. USA plainly can't compete with China for the overall state of business climate in any real world industry. Saying that plainly, I feel the attitude in USA is like "industry - bad, business - good." American bourgeois class has a collective psychosis, a delusion that you can somehow run a productive economy solely on stuff like banking, lawyering, consulting, and random "creative industries" that don't create anything. American bourgeois class is heading into nowhere following that path.
      - bilbo0s 8y ago
        China does have a better overall business environment. You're correct when you assert that cities in the US can't compete as far as raw abilities. But the original comment was about China's tax system, and that's all I was talking about. I was comparing only the tax systems. To say that China's TAX SYSTEM is better than that of the US is disingenuous.
        baybal2 8y ago
        Hmm, lets challenge that assumption too! :) I personally know 20 or so people who had ran business in China, and been personally involved in more or less intimate financial dealings of companies in China. Good sides: 1. Tax documentation is that damn simple 2. Of all countries, it is China that understands that you don't slaughter a chicken that will be laying golden eggs. That will sound very surprising, but the overall tax policy is more or less positive towards business. Most mom and pops shops are not demanded formal business registration, and even if they decide to legalise, many provinces have tax free or reduced tax grace periods from 2 to 5 years for small businesses! You simply don't hear taxmen making ruckus in the industry here. The worst thing about I heard personally was company's few thousand fapiao submission being subjected to review one by one for one year. 3. Smaller income tax, and in overall fever people having to pay it results in overall cheaper life for ordinary people, and cheaper workers. If you run an export business, you can see that "decoupling" effect the most. The economy is tuned to that lowest common denominator, not the abstract "middle class earner." All of that tells that China has very different view on taxation. Plain income, corporate and individual - completely chill, but for anything like good/transactions/services/other "money in motion" taxation is merciless.
- gonvaled 8y ago
  That is a consequence of the cultural supremacy of the US: the US is used to the world adapting to it, and fails miserably at adapting to the world.
  - friedman23 8y ago
    We are watching it adapt, the adaptation is to cut off trade with China. Trade reciprocity should've been enacted 2 decades ago.
mips_avatar 8y ago
If the local government is going to deny you the services that a business requires. Then you are being mandated to join a joint venture.
outworlder 8y ago
> Foreign companies are longer required to joint ventures with Chinese partners. Is that the case? If so, can we have the Real AWS back there?
- deathhand 8y ago
  And Microsoft/Azure as well? http://www.21vianet.com/ http://www.21vianet.com/

westiseast 8y ago

I think this is the correct answer. State sponsored theft of highly secret commercial/military information is one issue, rampant intellectual property abuse is another (eg. in fashion or entertainment industries). However potentially larger problems are the 100% legal barriers to entry for foreign companies - censorship, onerous and expensive company formation, trademark registration, inability to operate in a hopelessly corrupt political environment, opaque legal system, legal requirements to have CCP ‘agents’ operating inside your company, local government fiefdoms that often operate beyond the law etc etc.

baybal2 8y ago
I can't say that being iron clad. I will not put America in ranks with them, but I think that the biggest upside of China is that it has no such insanely convoluted tax system as in America.
- bilbo0s 8y ago
  It's not as convoluted, but it's just as expensive. That said, it's their right. I get it. Their nation, their tax rules. If I don't like the rules, I'm free NOT to start a business in China. That I understand, but to intimate that it's somehow "better" than the US is just being a little disingenuous. When it's all said and done, you'll likely pay more to do business in China. (But there's more potential upside too, so you need to take all these things into account.)
  - baybal2 8y ago
    > It's not as convoluted, but it's just as expensive. No running away from that, but you can't also run away from the fact that it is not humanly possible to profitably run a mainstream consumer electronics company outside of China. China stole the market not because it was making stuff cheaper than others, but because it was making it better than others. In the end, you end up with lower net cost of running business. > That I understand, but to intimate that it's somehow "better" than the US is just being a little disingenuous. It is better to run business in China today, and that is nothing disingenuous. I myself been in and out of electronics industry since 2007, and I can tell that not a single city ever came close in those 12 years to take the crown from Shenzhen. You can't compare USA and PRC apples to apples, but China has advantages that America has no analogues for, or just anything to compare. USA plainly can't compete with China for the overall state of business climate in any real world industry. Saying that plainly, I feel the attitude in USA is like "industry - bad, business - good." American bourgeois class has a collective psychosis, a delusion that you can somehow run a productive economy solely on stuff like banking, lawyering, consulting, and random "creative industries" that don't create anything. American bourgeois class is heading into nowhere following that path.
    - bilbo0s 8y ago
      China does have a better overall business environment. You're correct when you assert that cities in the US can't compete as far as raw abilities. But the original comment was about China's tax system, and that's all I was talking about. I was comparing only the tax systems. To say that China's TAX SYSTEM is better than that of the US is disingenuous.
      - baybal2 8y ago
        Hmm, lets challenge that assumption too! :) I personally know 20 or so people who had ran business in China, and been personally involved in more or less intimate financial dealings of companies in China. Good sides: 1. Tax documentation is that damn simple 2. Of all countries, it is China that understands that you don't slaughter a chicken that will be laying golden eggs. That will sound very surprising, but the overall tax policy is more or less positive towards business. Most mom and pops shops are not demanded formal business registration, and even if they decide to legalise, many provinces have tax free or reduced tax grace periods from 2 to 5 years for small businesses! You simply don't hear taxmen making ruckus in the industry here. The worst thing about I heard personally was company's few thousand fapiao submission being subjected to review one by one for one year. 3. Smaller income tax, and in overall fever people having to pay it results in overall cheaper life for ordinary people, and cheaper workers. If you run an export business, you can see that "decoupling" effect the most. The economy is tuned to that lowest common denominator, not the abstract "middle class earner." All of that tells that China has very different view on taxation. Plain income, corporate and individual - completely chill, but for anything like good/transactions/services/other "money in motion" taxation is merciless.
gonvaled 8y ago
That is a consequence of the cultural supremacy of the US: the US is used to the world adapting to it, and fails miserably at adapting to the world.
- friedman23 8y ago
  We are watching it adapt, the adaptation is to cut off trade with China. Trade reciprocity should've been enacted 2 decades ago.

mips_avatar 8y ago

If the local government is going to deny you the services that a business requires. Then you are being mandated to join a joint venture.

outworlder 8y ago

> Foreign companies are longer required to joint ventures with Chinese partners. Is that the case? If so, can we have the Real AWS back there?

deathhand 8y ago
And Microsoft/Azure as well? http://www.21vianet.com/ http://www.21vianet.com/