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While I agree with you, I think there's something that should be pointed out: China stance on foreign companies doing business in China. Currently China wants

While I agree with you, I think there's something that should be pointed out: China stance on foreign companies doing business in China. Currently China wants all the perks of the open global market, while closing it's own. I don't understand how this is allowed.

vkou 6y ago
China's market is not closed to foreign companies. This isn't 1990 anymore. American brands are everywhere in China, from Teslas, to iPhones, to McDonalds, to Starbucks, to the NBA, to the list goes on and on and on. Google, Facebook, Apple each make billions of dollars from China, every year. Calling that a closed market is... Not at all accurate. It's by no means a fully[1] open market, but it's not a closed one. [1] The definition of fully also varies from country to country. Is Canada a fully open market? No. For example, there's a lot of government protectionism surrounding media, and media infrastructure. Is the US a fully open market? No - again, not in the case of media infrastructure. Neither is an open market when it comes to food, or medical drugs. (For good reason, in my opinion - but that's just that - a political opinion. Other people have different opinions on this subject.)
- m0zg 6y ago
  > Google, Facebook, Apple each make billions of dollars from China, every year. How does _Facebook_ make "billions" in China in particular? It's completely banned there.
  - systemvoltage 6y ago
    https://en.wikipedia.org/wiki/List_of_websites_blocked_in_mainland_China https://en.wikipedia.org/wiki/List_of_websites_blocked_in_ma... Also, as others might point out that "Way into China is to abide by their rules and regulations" - which is not true when the restrictions imposed are to gut out the business and establish a CCP-controlled branch that serves only Chinese people. For example, Wikpedia is blocked, how is Wikipedia supposed to even enter the "market" (I know its a non-profit org). The truth is that China doesn't want western information, knowledge and values. This stance hides behind "rules and regulations".
  - shard 6y ago
    A company doesn't have to sell things to the local population to do business there. There are many companies in China which wish to access the user base that FB has. Here is an article from NYT talking about the $5B that FB made from China during 2018: https://www.nytimes.com/2019/02/07/technology/facebook-china-internet.html https://www.nytimes.com/2019/02/07/technology/facebook-china...
  - NovemberWhiskey 6y ago
    You forget; users are not Facebook customers. The advertisers are Facebook customers. Facebook may not be selling ads targeted to users in China, but it's sure as heck selling ads to Chinese companies. Facebook: you're not the customer, you're the product.
- mulmen 6y ago
  It's not binary. China's market is more closed (or less open) than the US.
  - _jal 6y ago
    Sure. China is doing what all nation states do - use their advantages, exploit their competitors' weaknesses. The US has (well, sometimes, to some extent) an ideological commitment to open markets. China does not. The US exploited the advantages of open markets to great success. Why would China not use the asymmetry now that they can? Two lessons: - Expecting your competitors to play by your rules is foolish. - Concepts like morality and fairness get people going, but are not very useful to apply to nation states.
    - saiya-jin 6y ago
      Not that I disagree anyhow, but good luck with that argument here... this is US website, visited predominantly by US folks, so I don't blame them that they want to protect their companies. Even if DJI is properly on top of the drone game, at least in some parts of drone market. The thing is, as a european, I don't give a nanofraction of a f*ck about these 'privacy issues'. Everybody steals data, americans are probably the most advanced (thank you mr Snowden for disclosing this, some proper respect there). No higher moral ground there. With current US administration Europe and US ain't big friends like they used to be. US set the tone to more 'everybody for themselves'. US killed tens of millions of innocent civilians in past 50 years, destroyed whole regions of this planet for generations to come, for money, power, resources and their ideology. THAT is something I care about. So give me a break with this political games, give me the best drone, it will spy on me regardless of country of origin if it can. Same as phone, tablets, desktop (depending on software used) and so on. Welcome to 2020, it ain't nice but this is how things are.
- Scramblejams 6y ago
  Try walking into China with a popular video game you own and selling it there. If it's big enough to get on anyone's radar, then it won't happen. You will be required to "partner" with a Chinese-owned company who will take a bunch of cash, a bunch of your ongoing revenues, maybe a little equity, and keep things humming with the local government. (And if you think that's implying something, it is.) That gets you initial access to the market. If you want to keep that access, you'll need to toe the line. (Expect the line to move.) One example: NetEase doesn't operate Blizzard's games in China just because Blizzard thought it'd be a nice idea to share a piece of the pie.[0] Western rules around media infrastructure ownership or food production, where almost all of the regulatory business is conducted out in the open, have no comparison here. [0] https://www.gamesindustry.biz/articles/2019-10-11-publishers-risk-being-trapped-between-the-us-and-china-opinion https://www.gamesindustry.biz/articles/2019-10-11-publishers...
- libertine 6y ago
  You're mentioning the largest American Brands, which do not represent the bulk of businesses. In fact they have different channels to setup their businesses and lobby their way around. When I made that comment I was referring to SME, which is also the bulk of let's say, Chinese sellers on Amazon US. Try to do what Chinese people do on Amazon, but on a Chinese platform as a SME, to sell products in China.
  - vkou 6y ago
    Your SME will be about as successful at operating in a Chinese market, as a Croatian SME will be successful at operating in an American market. That is to say, you'd need a pretty exceptional product, that is significantly better then local alternatives to get anywhere, because you're not going to be able to compete on price, or on brand recognition. The reason Chinese SMEs are punching above their weight in foreign markets is because of their low cost of labour.
    - jbay808 6y ago
      People often think it's labour, but it's much more than that. Low cost of everything. Transportation, production machinery, raw materials. And short lead times. Try buying something like a coil winder, an induction heater, a spot welder, or a heat sealer. Even in the US, you're much more likely to find Chinese equipment more competitive and more readily available. Especially for an SME.
    - libertine 6y ago
      >Your SME will be about as successful at operating in a Chinese market, as a Croatian SME will be successful at operating in an American market Well I guess that's depends on your definition of "successful", no? Nothing stops a Croatian SME to enter the US market. >That is to say, you'd need a pretty exceptional product, that is significantly better then local alternatives to get anywhere, because you're not going to be able to compete on price, or on brand recognition. Even this is arguable because one of the biggest problems of Amazon US is the flood of low quality products, yet that doesn't stop them from being successful.
philips 6y ago
I completely agree. I feel that China just directly protects their markets while for whatever reason the US hides behind a defense justification.
- tmotwu 6y ago
  It would be socially destructive if America directly admits free market capitalism wasn't globally competitive after all. They don't have any other option but to hide behind national security justifications. To those who still think this is about national security and most definitely not protectionist actions: why aren't these companies blanket banned immediately rather than given arbitrary timelines? India has demonstrated it is possible to do so and continues to be a self sustaining democracy.
  - samatman 6y ago
    Free market capitalism is a condition of peace, in the real sense that there's a spectrum from tariffs, to bans, to economic sanctions, leading to outright war. Unilateral disarmament, where one party allows free access to markets while the other party does not, is actually a valid tactic. It's not always the wrong thing to do. But choosing a tit-for-tat strategy instead isn't some sort of mark against free market capitalism. It just means that America has gotten tired of China defecting. Which I approve of. Your mileage may vary.
    - tmotwu 6y ago
      I agree that there is a spectrum, and protectionist measures would not deviate from our economic values. Whether tariffs, bans, and economic sanctions are actually effective strategies is a separate discussion entirely. But clearly there is a notion of free market capitalism one side seems to go to great lengths in protecting - which explains why they have been enforcing it under a separate pretense.
  - oh_sigh 6y ago
    The argument would be that it is not a current threat, but could be used as one in the future, hence the timeline to the ban, giving them time to right their ship, as it were. And even if this is a tit-for-tat retaliation against China, it isn't indicative of free market capitalism, because the 'tat' would be China closing off its own market and heavy handed government interference in any firm which wants to operate in China.
throw0101a 6y ago
> I don't understand how this is allowed. While I'd say it should no longer be allowed, especially given China's relative place in the world compared to (say) 20 years ago, can you blame them for the initial desire? * https://en.wikipedia.org/wiki/Century_of_humiliation https://en.wikipedia.org/wiki/Century_of_humiliation
pizza 6y ago
Excepting circumstances where China could be affecting regional shared resources (e.g. damming a river -> drought in neighboring country, for example) is this not just based on willing participation? I don't understand what exactly it is that is being 'allowed' that should be forbidden.. if China exports to foreign customers is it against moral sense to not allow in foreign business? Also, I know of a certain country that relies heavily on its ability to sanction countries from effective participation in the entire global market..
coldtea 6y ago
>Currently China wants all the perks of the open global market, while closing it's own. I don't understand how this is allowed. That's the same for the US. When it suits them there's sanctions, embargoes, tariffs, and questioning/forbiding foreign companies, investments, etc.
- lacker 6y ago
  It isn’t the same at all. China routinely bans American internet companies for no apparent reason. Whereas the vast majority of Chinese companies are allowed to sell into the US. No other country operates like China does, with such drastic anti-foreign policies.
  - sudosysgen 6y ago
    The US routinely bans foreign companies that threaten its cash cows, Bombardier is an example.
  - throw556437 6y ago
    There’s a very clear reason, they don’t follow Chinese censorship and data laws. Both Google and Facebook once operated in China, but after the multiple terrorist attacks, they were unwilling (or unable) to comply with Chinese laws. That’s why Skype and iMessage are available in China, they comply with Chinese laws.
    - liability 6y ago
      > but after the multiple terrorist attacks, 'Terrorist attacks' from who exactly? When French or Polish resistance members assassinated Germans, I bet the Nazis thought that was 'terrorism.' The Chinese government likes to cry and moans about 'terrorism' from Tibetans and Uyghurs, but the CCP are the real terrorists in these situations. Any American company that cooperates with them are abetting genocide.
      - chloerei 6y ago
        Does your knowledge of Xinjiang and Tibet come from your own eyes, or from Western media propaganda?
mytailorisrich 6y ago
It is "allowed" because everyone has so far benefited tremendously. It is of course possible to invest in China, most large Western companies have, and it is profitable. We've also all benefited from the huge pool of Chinese cheap labour. China has also obviously benefited through an incredible economic development, which actually also benefits Western economies.
Aperocky 6y ago
Closing it's own as in? With the exception of internet giants, everything else seemed to be well represented in China. name a western brand of physical good that's not available in China. Granted that our lives are more software oriented in this forum, majority of the trade in this planet is decidedly not.
- dicomdan 6y ago
  If you are an average Chinese citizen you cannot access most of the internet due to the Firewall. It's a modern day protectionism at an extreme level given that increasingly large parts of the economy are digital services nowadays.
- kube-system 6y ago
  China is actually opening up their economy, but they still have quite a number of bans on foreign companies: https://www.registrationchina.com/articles/china-negative-list-2020/ https://www.registrationchina.com/articles/china-negative-li...
- lacker 6y ago
  Plenty of non-giant internet companies are banned in China as well.
  - throw556437 6y ago
    Do those companies follow China’s data and censorship laws?
Barrin92 6y ago
>Currently China wants all the perks of the open global market, while closing it's own. I don't understand how this is allowed. Because that's the equilibrium between the countries. Each side tries to negotiate whatever is most to their advantage and that's that. China wants more control over companies, the US wants access to what is going to be the world's largest market and source of qualified labour. Each side can say no and walk away. For many US companies however that'd represent a significant loss, so they accept the conditions. Same reason people give Apple a 30% cut on their store.
nfc_ 6y ago
China not being open to multinationals is a common narrative on HN and not supported by the data. In fact in consumer goods, foreign companies have more market share in China (40%) than the US (26%). https://www.mckinsey.com/~/media/mckinsey/featured%20insights/china/china%20and%20the%20world%20inside%20the%20dynamics%20of%20a%20changing%20relationship/mgi-china-and-the-world-full-report-june-2019-vf.ashx https://www.mckinsey.com/~/media/mckinsey/featured%20insight...
- sheeshkebab 6y ago
  Foreign companies manufacturing goods in China that is... its hard to believe anything else given China’s $500b yearly trade surplus and tech transfer requirements. Also, report feels to have a bunch of speculative stats and projections.
ping_pong 6y ago
I truly hate Trump, but the one thing I agree with him on is taking on China via a trade war. We really do need to use economic pressure to force them to act in a fair way especially with trade and stealing company secrets. I don't think any other president would be dumb enough to attempt this, but even a broken clock is right twice a day.

vkou 6y ago

China's market is not closed to foreign companies. This isn't 1990 anymore. American brands are everywhere in China, from Teslas, to iPhones, to McDonalds, to Starbucks, to the NBA, to the list goes on and on and on. Google, Facebook, Apple each make billions of dollars from China, every year. Calling that a closed market is... Not at all accurate. It's by no means a fully[1] open market, but it's not a closed one. [1] The definition of fully also varies from country to country. Is Canada a fully open market? No. For example, there's a lot of government protectionism surrounding media, and media infrastructure. Is the US a fully open market? No - again, not in the case of media infrastructure. Neither is an open market when it comes to food, or medical drugs. (For good reason, in my opinion - but that's just that - a political opinion. Other people have different opinions on this subject.)

m0zg 6y ago
> Google, Facebook, Apple each make billions of dollars from China, every year. How does _Facebook_ make "billions" in China in particular? It's completely banned there.
- systemvoltage 6y ago
  https://en.wikipedia.org/wiki/List_of_websites_blocked_in_mainland_China https://en.wikipedia.org/wiki/List_of_websites_blocked_in_ma... Also, as others might point out that "Way into China is to abide by their rules and regulations" - which is not true when the restrictions imposed are to gut out the business and establish a CCP-controlled branch that serves only Chinese people. For example, Wikpedia is blocked, how is Wikipedia supposed to even enter the "market" (I know its a non-profit org). The truth is that China doesn't want western information, knowledge and values. This stance hides behind "rules and regulations".
- shard 6y ago
  A company doesn't have to sell things to the local population to do business there. There are many companies in China which wish to access the user base that FB has. Here is an article from NYT talking about the $5B that FB made from China during 2018: https://www.nytimes.com/2019/02/07/technology/facebook-china-internet.html https://www.nytimes.com/2019/02/07/technology/facebook-china...
- NovemberWhiskey 6y ago
  You forget; users are not Facebook customers. The advertisers are Facebook customers. Facebook may not be selling ads targeted to users in China, but it's sure as heck selling ads to Chinese companies. Facebook: you're not the customer, you're the product.
mulmen 6y ago
It's not binary. China's market is more closed (or less open) than the US.
- _jal 6y ago
  Sure. China is doing what all nation states do - use their advantages, exploit their competitors' weaknesses. The US has (well, sometimes, to some extent) an ideological commitment to open markets. China does not. The US exploited the advantages of open markets to great success. Why would China not use the asymmetry now that they can? Two lessons: - Expecting your competitors to play by your rules is foolish. - Concepts like morality and fairness get people going, but are not very useful to apply to nation states.
  - saiya-jin 6y ago
    Not that I disagree anyhow, but good luck with that argument here... this is US website, visited predominantly by US folks, so I don't blame them that they want to protect their companies. Even if DJI is properly on top of the drone game, at least in some parts of drone market. The thing is, as a european, I don't give a nanofraction of a f*ck about these 'privacy issues'. Everybody steals data, americans are probably the most advanced (thank you mr Snowden for disclosing this, some proper respect there). No higher moral ground there. With current US administration Europe and US ain't big friends like they used to be. US set the tone to more 'everybody for themselves'. US killed tens of millions of innocent civilians in past 50 years, destroyed whole regions of this planet for generations to come, for money, power, resources and their ideology. THAT is something I care about. So give me a break with this political games, give me the best drone, it will spy on me regardless of country of origin if it can. Same as phone, tablets, desktop (depending on software used) and so on. Welcome to 2020, it ain't nice but this is how things are.
Scramblejams 6y ago
Try walking into China with a popular video game you own and selling it there. If it's big enough to get on anyone's radar, then it won't happen. You will be required to "partner" with a Chinese-owned company who will take a bunch of cash, a bunch of your ongoing revenues, maybe a little equity, and keep things humming with the local government. (And if you think that's implying something, it is.) That gets you initial access to the market. If you want to keep that access, you'll need to toe the line. (Expect the line to move.) One example: NetEase doesn't operate Blizzard's games in China just because Blizzard thought it'd be a nice idea to share a piece of the pie.[0] Western rules around media infrastructure ownership or food production, where almost all of the regulatory business is conducted out in the open, have no comparison here. [0] https://www.gamesindustry.biz/articles/2019-10-11-publishers-risk-being-trapped-between-the-us-and-china-opinion https://www.gamesindustry.biz/articles/2019-10-11-publishers...
libertine 6y ago
You're mentioning the largest American Brands, which do not represent the bulk of businesses. In fact they have different channels to setup their businesses and lobby their way around. When I made that comment I was referring to SME, which is also the bulk of let's say, Chinese sellers on Amazon US. Try to do what Chinese people do on Amazon, but on a Chinese platform as a SME, to sell products in China.
- vkou 6y ago
  Your SME will be about as successful at operating in a Chinese market, as a Croatian SME will be successful at operating in an American market. That is to say, you'd need a pretty exceptional product, that is significantly better then local alternatives to get anywhere, because you're not going to be able to compete on price, or on brand recognition. The reason Chinese SMEs are punching above their weight in foreign markets is because of their low cost of labour.
  - jbay808 6y ago
    People often think it's labour, but it's much more than that. Low cost of everything. Transportation, production machinery, raw materials. And short lead times. Try buying something like a coil winder, an induction heater, a spot welder, or a heat sealer. Even in the US, you're much more likely to find Chinese equipment more competitive and more readily available. Especially for an SME.
  - libertine 6y ago
    >Your SME will be about as successful at operating in a Chinese market, as a Croatian SME will be successful at operating in an American market Well I guess that's depends on your definition of "successful", no? Nothing stops a Croatian SME to enter the US market. >That is to say, you'd need a pretty exceptional product, that is significantly better then local alternatives to get anywhere, because you're not going to be able to compete on price, or on brand recognition. Even this is arguable because one of the biggest problems of Amazon US is the flood of low quality products, yet that doesn't stop them from being successful.

philips 6y ago

I completely agree. I feel that China just directly protects their markets while for whatever reason the US hides behind a defense justification.

tmotwu 6y ago
It would be socially destructive if America directly admits free market capitalism wasn't globally competitive after all. They don't have any other option but to hide behind national security justifications. To those who still think this is about national security and most definitely not protectionist actions: why aren't these companies blanket banned immediately rather than given arbitrary timelines? India has demonstrated it is possible to do so and continues to be a self sustaining democracy.
- samatman 6y ago
  Free market capitalism is a condition of peace, in the real sense that there's a spectrum from tariffs, to bans, to economic sanctions, leading to outright war. Unilateral disarmament, where one party allows free access to markets while the other party does not, is actually a valid tactic. It's not always the wrong thing to do. But choosing a tit-for-tat strategy instead isn't some sort of mark against free market capitalism. It just means that America has gotten tired of China defecting. Which I approve of. Your mileage may vary.
  - tmotwu 6y ago
    I agree that there is a spectrum, and protectionist measures would not deviate from our economic values. Whether tariffs, bans, and economic sanctions are actually effective strategies is a separate discussion entirely. But clearly there is a notion of free market capitalism one side seems to go to great lengths in protecting - which explains why they have been enforcing it under a separate pretense.
- oh_sigh 6y ago
  The argument would be that it is not a current threat, but could be used as one in the future, hence the timeline to the ban, giving them time to right their ship, as it were. And even if this is a tit-for-tat retaliation against China, it isn't indicative of free market capitalism, because the 'tat' would be China closing off its own market and heavy handed government interference in any firm which wants to operate in China.

throw0101a 6y ago

> I don't understand how this is allowed. While I'd say it should no longer be allowed, especially given China's relative place in the world compared to (say) 20 years ago, can you blame them for the initial desire? * https://en.wikipedia.org/wiki/Century_of_humiliation https://en.wikipedia.org/wiki/Century_of_humiliation

pizza 6y ago

Excepting circumstances where China could be affecting regional shared resources (e.g. damming a river -> drought in neighboring country, for example) is this not just based on willing participation? I don't understand what exactly it is that is being 'allowed' that should be forbidden.. if China exports to foreign customers is it against moral sense to not allow in foreign business? Also, I know of a certain country that relies heavily on its ability to sanction countries from effective participation in the entire global market..

coldtea 6y ago

>Currently China wants all the perks of the open global market, while closing it's own. I don't understand how this is allowed. That's the same for the US. When it suits them there's sanctions, embargoes, tariffs, and questioning/forbiding foreign companies, investments, etc.

lacker 6y ago
It isn’t the same at all. China routinely bans American internet companies for no apparent reason. Whereas the vast majority of Chinese companies are allowed to sell into the US. No other country operates like China does, with such drastic anti-foreign policies.
- sudosysgen 6y ago
  The US routinely bans foreign companies that threaten its cash cows, Bombardier is an example.
- throw556437 6y ago
  There’s a very clear reason, they don’t follow Chinese censorship and data laws. Both Google and Facebook once operated in China, but after the multiple terrorist attacks, they were unwilling (or unable) to comply with Chinese laws. That’s why Skype and iMessage are available in China, they comply with Chinese laws.
  - liability 6y ago
    > but after the multiple terrorist attacks, 'Terrorist attacks' from who exactly? When French or Polish resistance members assassinated Germans, I bet the Nazis thought that was 'terrorism.' The Chinese government likes to cry and moans about 'terrorism' from Tibetans and Uyghurs, but the CCP are the real terrorists in these situations. Any American company that cooperates with them are abetting genocide.
    - chloerei 6y ago
      Does your knowledge of Xinjiang and Tibet come from your own eyes, or from Western media propaganda?

mytailorisrich 6y ago

It is "allowed" because everyone has so far benefited tremendously. It is of course possible to invest in China, most large Western companies have, and it is profitable. We've also all benefited from the huge pool of Chinese cheap labour. China has also obviously benefited through an incredible economic development, which actually also benefits Western economies.

Aperocky 6y ago

Closing it's own as in? With the exception of internet giants, everything else seemed to be well represented in China. name a western brand of physical good that's not available in China. Granted that our lives are more software oriented in this forum, majority of the trade in this planet is decidedly not.

dicomdan 6y ago
If you are an average Chinese citizen you cannot access most of the internet due to the Firewall. It's a modern day protectionism at an extreme level given that increasingly large parts of the economy are digital services nowadays.
kube-system 6y ago
China is actually opening up their economy, but they still have quite a number of bans on foreign companies: https://www.registrationchina.com/articles/china-negative-list-2020/ https://www.registrationchina.com/articles/china-negative-li...
lacker 6y ago
Plenty of non-giant internet companies are banned in China as well.
- throw556437 6y ago
  Do those companies follow China’s data and censorship laws?

Barrin92 6y ago

>Currently China wants all the perks of the open global market, while closing it's own. I don't understand how this is allowed. Because that's the equilibrium between the countries. Each side tries to negotiate whatever is most to their advantage and that's that. China wants more control over companies, the US wants access to what is going to be the world's largest market and source of qualified labour. Each side can say no and walk away. For many US companies however that'd represent a significant loss, so they accept the conditions. Same reason people give Apple a 30% cut on their store.

nfc_ 6y ago

China not being open to multinationals is a common narrative on HN and not supported by the data. In fact in consumer goods, foreign companies have more market share in China (40%) than the US (26%). https://www.mckinsey.com/~/media/mckinsey/featured%20insights/china/china%20and%20the%20world%20inside%20the%20dynamics%20of%20a%20changing%20relationship/mgi-china-and-the-world-full-report-june-2019-vf.ashx https://www.mckinsey.com/~/media/mckinsey/featured%20insight...

sheeshkebab 6y ago
Foreign companies manufacturing goods in China that is... its hard to believe anything else given China’s $500b yearly trade surplus and tech transfer requirements. Also, report feels to have a bunch of speculative stats and projections.

ping_pong 6y ago

I truly hate Trump, but the one thing I agree with him on is taking on China via a trade war. We really do need to use economic pressure to force them to act in a fair way especially with trade and stealing company secrets. I don't think any other president would be dumb enough to attempt this, but even a broken clock is right twice a day.