4 ms·

They do not need foreign capital per se. They need foreign business expertise and technology in areas where domestic ones are not sufficient at the moment. For

by fuoqi 4y ago

They do not need foreign capital per se. They need foreign business expertise and technology in areas where domestic ones are not sufficient at the moment. For pure capital they have more than enough in US debt, maybe even too much, since they try to allocate as much of it as possible (e.g. using the one belt initiative) without launching RMB exchange rate into space. With the mounting up US sanctions, trade wars, and "friend-shoring", China will have less and less interest in western investments.

refurb 4y ago
True, but foreign business expertise and technology uses goes hand in hand with foreign investment (otherwise, why bother?). So China isn't going to get the former, if they don't make the later easier. Ease of capital flow is one reason why Singapore has done so well (among many reasons). You can turn Singapore dollars into whatever currency you want, in whatever quantities and move it out of the country with no barriers at all. Plus the rule of law, which means the government is predictable in its decision making. Singapore isn't going to turn around and nationalize a bunch of foreign industries any time soon, because they realize the second they do, all that foreign capital is going to disappear very quickly.
- fuoqi 4y ago
  >why bother? For example because your production capacity in China will produce your stuff for cheap and you will be able to sell this stuff with a good markup? You will not be able to easily sell the production capacity and move the resulting capital outside of China as you would in the US or EU, but as long as it operates it will generate you profit.
  - refurb 4y ago
    That could work in low capital intensive industries, but I'm not sure the numbers would work out for high tech, high capital intensive industries where you need to invest billions that you may never be able to recover.

by fuoqi 4y ago

refurb 4y ago

True, but foreign business expertise and technology uses goes hand in hand with foreign investment (otherwise, why bother?). So China isn't going to get the former, if they don't make the later easier. Ease of capital flow is one reason why Singapore has done so well (among many reasons). You can turn Singapore dollars into whatever currency you want, in whatever quantities and move it out of the country with no barriers at all. Plus the rule of law, which means the government is predictable in its decision making. Singapore isn't going to turn around and nationalize a bunch of foreign industries any time soon, because they realize the second they do, all that foreign capital is going to disappear very quickly.

fuoqi 4y ago
>why bother? For example because your production capacity in China will produce your stuff for cheap and you will be able to sell this stuff with a good markup? You will not be able to easily sell the production capacity and move the resulting capital outside of China as you would in the US or EU, but as long as it operates it will generate you profit.
- refurb 4y ago
  That could work in low capital intensive industries, but I'm not sure the numbers would work out for high tech, high capital intensive industries where you need to invest billions that you may never be able to recover.