5 ms·

they really are keen on annoying investors aren't they. i wonder for how long tencent and the other conglomerates will obey these orders

csense 5y ago
They'll obey as long as they are run by people who have families that can be threatened.
mc32 5y ago
You can’t just ignore regulation in the jurisdiction you’re doing business. Like it or not, they will have to follow regulation or cease operations.
bilbo0s 5y ago
i wonder for how long tencent and the other conglomerates will obey these orders Strange question with what I would consider to be an obvious answer. They will obey for as long as they want the profits they get from China's market of video game players for instance. Which strikes me as pretty much "forever". What company is gonna leave and give that kind of gift wrapped profit center to someone else voluntarily?
- AnimalMuppet 5y ago
  Any company, when the realize that it's no longer a profit center, and isn't likely to return to being a profit center any time soon. The trick for China is to get the regulations in place that are necessary, without putting so many in place that it strangles profitability (and therefore destroys business). But come to think of it, that's the trick for any country when regulating.
- itmayno 5y ago
  They will either leave voluntarily or be out of business at the whim of a dictatorship literally the next day. It’s just risk vs reward here.
- jollybean 5y ago
  "What company is gonna leave and give that kind of gift wrapped profit center to someone else voluntarily? " When it's no longer a gift. These companies are sometimes high flying startups along the lines of US firms and they require access to capital. If their valuations are clipped by an order of magnitude because of regulatory apparatus (i.e. can't list in the US and American investors have no appetite for Chinese exchanges), then this will be a problem for a lot of businesses. TikTok is getting big in the US and the West where margins are a lot fatter, it could feasibly make more sense for Bytedance to jump ship and become an American-based company with a Chinese workforce. Obviously that's hugely speculative but just an example. It's like any bit of regulation it has a bunch of externalities. Some may be pretty bad for the company. Maybe, maybe not.
AzzieElbab 5y ago
they are not trying to be annoying, they are incompatible with free markets, and free flows of info.
- itmayno 5y ago
  If you are still manufacturing in China, you are a fool. Get ready for your factory to be seized/shut down in the next couple of years, or be taxed/fines so much that you have no choice but to leave. Or get ransomed by the local factory that you are working with (like extreme delay of products or shoddy products delivery).
- deleted 5y ago
  [deleted]
tablespoon 5y ago
> they really are keen on annoying investors aren't they. i wonder for how long tencent and the other conglomerates will obey these orders They will obey as long as the state has power, which will be for the far foreseeable future. The Chinese government has been smart enhance its power by keeping its domestic businesses in a strictly subordinate position and creating an environment were foreign businesses cooperate because dependence is the best business decision (e.g. Apple has no "plan B," it's China all the way for them). And it might work out for them, especially if foreign nations continue to complacently indulge in free market Kool-Aid.
- baybal2 5y ago
  > Apple has no "plan B," it's China all the way for them I know many people who work, or worked for Apple on the hardware side. I assure you, Apple has "plan B," and it been trying executing on it relentlessly for the last 2 years — just without any success. Vietnam's total electronics industry output is like a single district in Dongguan. The supply chain is very, very immature there, despite it already towering above any other place in developing Asia, but China. If what my buddies tell me of Apple's internal assesment of countries is correct, no other countries are even close to a 2nd place alternative on that, except for Taiwan, which is their "plan C" — a sure to work, but expensive option if everything else fails.
  - itmayno 5y ago
    Samsung stopped mobile phone production in China since 2019. They are heavily in Vietnam. Apple is just doing something wrong is all.
  - tablespoon 5y ago
    > I assure you, Apple has "plan B," and it been trying executing on it relentlessly for the last 2 years — just without any success. Can you share any details about that? > If what my buddies tell me of Apple's internal assesment of countries is correct, no other countries are even close to a 2nd place alternative on that, except for Taiwan, which is their "plan C" — a sure to work, but expensive option if everything else fails. That's actually kind of what I meant by "there's no plan B." They may be able to formulate other plans (B, C, D, etc.) and even spend a little money on them, but Western business-thinking won't let them actually deviate from plan A. One of China's advantages is that the West puts business in the driver's seat in a lot of situations, but business is short-sighted, selfish, and geopolitically naive, so it is exploitable and controllable with the right methods.
SubiculumCode 5y ago
It will be interesting to see what a mass exodus of investment money leaving China does to their economy and geopolitics. Edit: If
- vkou 5y ago
  1. Why would there be a mass exodus, any shareholder board will fire a C-suite that gives up selling to the world's fastest growing market / building in the world's most capable manufacturing market. Expecting one is just wishful thinking. Boards and executives tend to care about the bottom line, and very rarely about political grandstanding. 2. Even if there were a mass exodus (Which won't happen, because #1), the factories, the expertise, the knowledge base and the human capital those investments paid for aren't going to disappear. All that will happen is that they will become China-owned, as opposed to partially China-owned.
  - SubiculumCode 5y ago
    https://www.bloomberg.com/news/articles/2021-07-27/china-s-crackdown-stocks-extend-declines-into-a-third-day https://www.bloomberg.com/news/articles/2021-07-27/china-s-c...
    - vkou 5y ago
      1. Investors selling stock has zero bearing on the operation of a factory, barring certain edge cases. Companies extract money from the stock market by issuing IPOs, after that happens, it doesn't matter to them very much at what price their shares are traded. See my previous post - just because the stock value drops, doesn't mean that actual assets, know-how, expertise, or training disappears into thin air. [1] 2. Foreigners selling will lead to locals buying. Those firms will simply go from majority-Chinese-owned, to Chinese-owned. 3. Stock markets don't just go up all the time, sometimes they correct. [1] It does in the United States, but that's because during slumps, the government is very skittish when it comes to creating demand, outside of the MIC. The CCP takes a longer view, and actively prioritizes building up China's industrial base, as opposed to dismantling and offshoring it.
Alupis 5y ago
If they can make Jack Ma disappear for months over some casual comments - I think executives at these conglomerates understand the message pretty clearly.
eunos 5y ago
My tinfoil hats say that they realize that we are in the age of ultra loose monetary policy, so abundance of capital. Therefore it's time to clean the house. Gonna spook investors of course, but hey all other places offer zero or minus yield rate, China still has positive yield anyway.
RcouF1uZ4gsC 5y ago
> i wonder for how long tencent and the other conglomerates will obey these orders Probably as long as the regulation exists. It is amazing, but once there is the real threat of personal, physical imprisonment, most CEOs are pretty good about making sure regulations get followed despite any impact on the stock price.
yogthos 5y ago
I don't think they give a shit about investors actually.

csense 5y ago

They'll obey as long as they are run by people who have families that can be threatened.

mc32 5y ago

You can’t just ignore regulation in the jurisdiction you’re doing business. Like it or not, they will have to follow regulation or cease operations.

bilbo0s 5y ago

i wonder for how long tencent and the other conglomerates will obey these orders Strange question with what I would consider to be an obvious answer. They will obey for as long as they want the profits they get from China's market of video game players for instance. Which strikes me as pretty much "forever". What company is gonna leave and give that kind of gift wrapped profit center to someone else voluntarily?

AnimalMuppet 5y ago
Any company, when the realize that it's no longer a profit center, and isn't likely to return to being a profit center any time soon. The trick for China is to get the regulations in place that are necessary, without putting so many in place that it strangles profitability (and therefore destroys business). But come to think of it, that's the trick for any country when regulating.
itmayno 5y ago
They will either leave voluntarily or be out of business at the whim of a dictatorship literally the next day. It’s just risk vs reward here.
jollybean 5y ago
"What company is gonna leave and give that kind of gift wrapped profit center to someone else voluntarily? " When it's no longer a gift. These companies are sometimes high flying startups along the lines of US firms and they require access to capital. If their valuations are clipped by an order of magnitude because of regulatory apparatus (i.e. can't list in the US and American investors have no appetite for Chinese exchanges), then this will be a problem for a lot of businesses. TikTok is getting big in the US and the West where margins are a lot fatter, it could feasibly make more sense for Bytedance to jump ship and become an American-based company with a Chinese workforce. Obviously that's hugely speculative but just an example. It's like any bit of regulation it has a bunch of externalities. Some may be pretty bad for the company. Maybe, maybe not.

AzzieElbab 5y ago

they are not trying to be annoying, they are incompatible with free markets, and free flows of info.

itmayno 5y ago
If you are still manufacturing in China, you are a fool. Get ready for your factory to be seized/shut down in the next couple of years, or be taxed/fines so much that you have no choice but to leave. Or get ransomed by the local factory that you are working with (like extreme delay of products or shoddy products delivery).
deleted 5y ago
[deleted]

tablespoon 5y ago

> they really are keen on annoying investors aren't they. i wonder for how long tencent and the other conglomerates will obey these orders They will obey as long as the state has power, which will be for the far foreseeable future. The Chinese government has been smart enhance its power by keeping its domestic businesses in a strictly subordinate position and creating an environment were foreign businesses cooperate because dependence is the best business decision (e.g. Apple has no "plan B," it's China all the way for them). And it might work out for them, especially if foreign nations continue to complacently indulge in free market Kool-Aid.

baybal2 5y ago
> Apple has no "plan B," it's China all the way for them I know many people who work, or worked for Apple on the hardware side. I assure you, Apple has "plan B," and it been trying executing on it relentlessly for the last 2 years — just without any success. Vietnam's total electronics industry output is like a single district in Dongguan. The supply chain is very, very immature there, despite it already towering above any other place in developing Asia, but China. If what my buddies tell me of Apple's internal assesment of countries is correct, no other countries are even close to a 2nd place alternative on that, except for Taiwan, which is their "plan C" — a sure to work, but expensive option if everything else fails.
- itmayno 5y ago
  Samsung stopped mobile phone production in China since 2019. They are heavily in Vietnam. Apple is just doing something wrong is all.
- tablespoon 5y ago
  > I assure you, Apple has "plan B," and it been trying executing on it relentlessly for the last 2 years — just without any success. Can you share any details about that? > If what my buddies tell me of Apple's internal assesment of countries is correct, no other countries are even close to a 2nd place alternative on that, except for Taiwan, which is their "plan C" — a sure to work, but expensive option if everything else fails. That's actually kind of what I meant by "there's no plan B." They may be able to formulate other plans (B, C, D, etc.) and even spend a little money on them, but Western business-thinking won't let them actually deviate from plan A. One of China's advantages is that the West puts business in the driver's seat in a lot of situations, but business is short-sighted, selfish, and geopolitically naive, so it is exploitable and controllable with the right methods.

SubiculumCode 5y ago

It will be interesting to see what a mass exodus of investment money leaving China does to their economy and geopolitics. Edit: If

vkou 5y ago
1. Why would there be a mass exodus, any shareholder board will fire a C-suite that gives up selling to the world's fastest growing market / building in the world's most capable manufacturing market. Expecting one is just wishful thinking. Boards and executives tend to care about the bottom line, and very rarely about political grandstanding. 2. Even if there were a mass exodus (Which won't happen, because #1), the factories, the expertise, the knowledge base and the human capital those investments paid for aren't going to disappear. All that will happen is that they will become China-owned, as opposed to partially China-owned.
- SubiculumCode 5y ago
  https://www.bloomberg.com/news/articles/2021-07-27/china-s-crackdown-stocks-extend-declines-into-a-third-day https://www.bloomberg.com/news/articles/2021-07-27/china-s-c...
  - vkou 5y ago
    1. Investors selling stock has zero bearing on the operation of a factory, barring certain edge cases. Companies extract money from the stock market by issuing IPOs, after that happens, it doesn't matter to them very much at what price their shares are traded. See my previous post - just because the stock value drops, doesn't mean that actual assets, know-how, expertise, or training disappears into thin air. [1] 2. Foreigners selling will lead to locals buying. Those firms will simply go from majority-Chinese-owned, to Chinese-owned. 3. Stock markets don't just go up all the time, sometimes they correct. [1] It does in the United States, but that's because during slumps, the government is very skittish when it comes to creating demand, outside of the MIC. The CCP takes a longer view, and actively prioritizes building up China's industrial base, as opposed to dismantling and offshoring it.

Alupis 5y ago

If they can make Jack Ma disappear for months over some casual comments - I think executives at these conglomerates understand the message pretty clearly.

eunos 5y ago

My tinfoil hats say that they realize that we are in the age of ultra loose monetary policy, so abundance of capital. Therefore it's time to clean the house. Gonna spook investors of course, but hey all other places offer zero or minus yield rate, China still has positive yield anyway.

RcouF1uZ4gsC 5y ago

> i wonder for how long tencent and the other conglomerates will obey these orders Probably as long as the regulation exists. It is amazing, but once there is the real threat of personal, physical imprisonment, most CEOs are pretty good about making sure regulations get followed despite any impact on the stock price.

yogthos 5y ago

I don't think they give a shit about investors actually.