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How do I interprit this list. As tit for tat or why else would a CEO join this board? Tesla is one of the only companies that really seems to be successful in

How do I interprit this list. As tit for tat or why else would a CEO join this board? Tesla is one of the only companies that really seems to be successful in China. Then you have Apple and others that are getting overtaken by domestic companies and not coincidentally a lot of financial companies ( that niche was pretty open in China, I thought) Does this list also explain why Microsoft asked the White House to lift the ban on Huawei/trade war? Or is this not even close related. Am I wrong? If so, please explain. I guess the profit is both in market access and some sort of personal gain?

adventured 7y ago
> Tesla is one of the only companies that really seems to be successful in China. > Am I wrong? If so, please explain. GM has, over time, made an enormous business out of the Chinese market. They got in early and printed a lot of money there. Something like 1/3 of all their unit sales have been in China over the past decade. More recently it was closer to half. They went from 900,000 annual units in 2004, to 1.8 million by 2009. In 2018 they moved ~4 million units there, half their sales volume globally. The financial entities on that list (Blackstone, Goldman, Citi, JP Morgan, BlackRock) all want access to China. China has been - sort of - working to open access to foreign financial giants like JP Morgan and Goldman. There's wide debate on whether that's more plausibly China trying to sucker them into helping with their debt situation, or whether it's the financial firms that will benefit more (no doubt they arrogantly think they can wrangle China for a fat profit, famous last thoughts when the debt monster turns). Walmart has been in China for a quarter of a century now. They have a thriving, growing retail business there and have done modestly well [1] whereas their peers have flailed. Dell has had deep manufacturing relationships in China for a while. More recently they started manufacturing in Western China (Chengdu) in 2012 and Xiamen before that. Henry Paulson has a strange, slightly Kissinger like relationship with China, dating to the financial crisis and before. He has a lot of personal relationships with authorities there. He wrote a book about China ("Dealing with China: An Insider Unmasks the New Economic Superpower") and seems to have a personal fascination with the country. He openly admires them, so it makes sense he'd want those ties. As the world's #1 or #2 consumer market, it makes perfect sense for Anheuser-Busch InBev to be everywhere there (to the extent they can), given they're a global beverage giant. Their stated position is that China and the region in general represents a very large growth opportunity in the coming decades. Microsoft has a real business in China, generating several billion per year for them. It's not what it should be, but it's essentially all gravy given the alternative is piracy in China. All the way back to when Bill Gates was running the company they were working with China to limit piracy of Windows and Office. Gates made early ventures to China repeatedly to try to convince Chinese authorities to crack down on piracy. There's an amusing quip [2] from Gates about this from 2007: > Today Gates openly concedes that tolerating piracy turned out to be Microsoft's best long-term strategy. That's why Windows is used on an estimated 90% of China's 120 million PCs. "It's easier for our software to compete with Linux when there's piracy than when there's not," Gates says. "Are you kidding? You can get the real thing, and you get the same price." Indeed, in China's back alleys, Linux often costs more than Windows because it requires more disks. And Microsoft's own prices have dropped so low it now sells a $3 package of Windows and Office to students. I don't know what Comcast (Roberts) is doing there. They're a large telecom company and there is, I suppose, prestige in that list. Plus Comcast is now also a media & content company. I'm sure they want their content to have access to China, today and in the future. [1] https://www.caixinglobal.com/2019-08-16/as-rivals-flee-china-walmart-rings-up-47-sales-growth-101451866.html https://www.caixinglobal.com/2019-08-16/as-rivals-flee-china... [2] https://money.cnn.com/magazines/fortune/fortune_archive/2007/07/23/100134488/ https://money.cnn.com/magazines/fortune/fortune_archive/2007...
- NicoJuicy 7y ago
  The am I wrong was mostly on: is this tit for tat. Based on your detailed explanation, it is public. Still not sure if it's also for personal gain.
  - adventured 7y ago
    I would say it's absolutely based on China not being an open market, operating primarily by relationships and permission (which can be revoked at any time for any reason). If you want to do business in China at scale over multiple decades, you better cultivate extremely deep, enduring relationships with the highest tiers of power in their system. And you better constantly renew those ties as the power structures turn over across time. Being on this board is the global business equivalent of reputation sharing, like giving China valuable IP in exchange for them letting you have market access. That's a list of highly respected global business titans, they're lending China and that University their reputation to warm ties and buy favor - absolutely. Zuckerberg is the only one seriously on the outside in that list. He has seen effectively zero benefit so far to all his efforts on relationship building. Although they'll still take his reputation sharing (credibility enhancing; I know that seems absurd in the West right now, he's regarded as a respectable business titan in China). He has been wishing on a star for years now to get access to China. Amusingly, the Chinese authorities have (for their own purposes) thought better of it and know not to let FB in.
    - NicoJuicy 7y ago
      Couldn't agree more, good analysis.

adventured 7y ago

> Tesla is one of the only companies that really seems to be successful in China. > Am I wrong? If so, please explain. GM has, over time, made an enormous business out of the Chinese market. They got in early and printed a lot of money there. Something like 1/3 of all their unit sales have been in China over the past decade. More recently it was closer to half. They went from 900,000 annual units in 2004, to 1.8 million by 2009. In 2018 they moved ~4 million units there, half their sales volume globally. The financial entities on that list (Blackstone, Goldman, Citi, JP Morgan, BlackRock) all want access to China. China has been - sort of - working to open access to foreign financial giants like JP Morgan and Goldman. There's wide debate on whether that's more plausibly China trying to sucker them into helping with their debt situation, or whether it's the financial firms that will benefit more (no doubt they arrogantly think they can wrangle China for a fat profit, famous last thoughts when the debt monster turns). Walmart has been in China for a quarter of a century now. They have a thriving, growing retail business there and have done modestly well [1] whereas their peers have flailed. Dell has had deep manufacturing relationships in China for a while. More recently they started manufacturing in Western China (Chengdu) in 2012 and Xiamen before that. Henry Paulson has a strange, slightly Kissinger like relationship with China, dating to the financial crisis and before. He has a lot of personal relationships with authorities there. He wrote a book about China ("Dealing with China: An Insider Unmasks the New Economic Superpower") and seems to have a personal fascination with the country. He openly admires them, so it makes sense he'd want those ties. As the world's #1 or #2 consumer market, it makes perfect sense for Anheuser-Busch InBev to be everywhere there (to the extent they can), given they're a global beverage giant. Their stated position is that China and the region in general represents a very large growth opportunity in the coming decades. Microsoft has a real business in China, generating several billion per year for them. It's not what it should be, but it's essentially all gravy given the alternative is piracy in China. All the way back to when Bill Gates was running the company they were working with China to limit piracy of Windows and Office. Gates made early ventures to China repeatedly to try to convince Chinese authorities to crack down on piracy. There's an amusing quip [2] from Gates about this from 2007: > Today Gates openly concedes that tolerating piracy turned out to be Microsoft's best long-term strategy. That's why Windows is used on an estimated 90% of China's 120 million PCs. "It's easier for our software to compete with Linux when there's piracy than when there's not," Gates says. "Are you kidding? You can get the real thing, and you get the same price." Indeed, in China's back alleys, Linux often costs more than Windows because it requires more disks. And Microsoft's own prices have dropped so low it now sells a $3 package of Windows and Office to students. I don't know what Comcast (Roberts) is doing there. They're a large telecom company and there is, I suppose, prestige in that list. Plus Comcast is now also a media & content company. I'm sure they want their content to have access to China, today and in the future. [1] https://www.caixinglobal.com/2019-08-16/as-rivals-flee-china-walmart-rings-up-47-sales-growth-101451866.html https://www.caixinglobal.com/2019-08-16/as-rivals-flee-china... [2] https://money.cnn.com/magazines/fortune/fortune_archive/2007/07/23/100134488/ https://money.cnn.com/magazines/fortune/fortune_archive/2007...

NicoJuicy 7y ago
The am I wrong was mostly on: is this tit for tat. Based on your detailed explanation, it is public. Still not sure if it's also for personal gain.
- adventured 7y ago
  I would say it's absolutely based on China not being an open market, operating primarily by relationships and permission (which can be revoked at any time for any reason). If you want to do business in China at scale over multiple decades, you better cultivate extremely deep, enduring relationships with the highest tiers of power in their system. And you better constantly renew those ties as the power structures turn over across time. Being on this board is the global business equivalent of reputation sharing, like giving China valuable IP in exchange for them letting you have market access. That's a list of highly respected global business titans, they're lending China and that University their reputation to warm ties and buy favor - absolutely. Zuckerberg is the only one seriously on the outside in that list. He has seen effectively zero benefit so far to all his efforts on relationship building. Although they'll still take his reputation sharing (credibility enhancing; I know that seems absurd in the West right now, he's regarded as a respectable business titan in China). He has been wishing on a star for years now to get access to China. Amusingly, the Chinese authorities have (for their own purposes) thought better of it and know not to let FB in.
  - NicoJuicy 7y ago
    Couldn't agree more, good analysis.