What has Alibaba exactly contributed? How does their IP book looks like? What foundational technology are they investing in to contribute to some technological progress. I dislike those companies with big cash reserves but little to no tech contribution. There are zero signs of tech ambitions only about earning money for their shareholders.
Chinese Economics Thread
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Cloud computing, RISCV processor, e-commerce infrastructure and logistics. Among a few.
The fintech was a real innovation.
A small loan has always been available since time immemorial, but what BABA did was amazing, to scale it up that quickly and be available to someone right on their phone.
The micro loans could be game changers in small communities.
Is 20$ billion yuan a third of its cash reserves? From the article seems like out of the 10 things, only the last one is geared towards "common prosperity" which will be 20$ bil yuan. The rest of the plans seem like they were pushed in the right direction with domestic investments. So if this sours more domestics SME and innovation then great!
I don't get what this 'common prosperity' is and forcing comlanto make donations. I mean, China is a country of 1.4 billion people, how many donations will you need to make a difference and will you keep forcing firms to donate?
What happens when Xi exits and a new administration comes with other priorities?
There so called 'common prosperity ' should be addressed at the policy level by encouraging these internet companies to invest in foundational research, universities and start ups.
What happens when Xi exits and a new administration comes with other priorities?
There so called 'common prosperity ' should be addressed at the policy level by encouraging these internet companies to invest in foundational research, universities and start ups.
A lot. If the Gov could force all the big companies to invest $100 Billion per year in a targeted manner (agriculture, SMEs, edu, sustainable Dev, infra etc), then that would make a sizeable impact to the poor and ultimately to the companies themselves in the long term, as people get richer from such donations
Yes. Either donate normally or the Gov will destroy your business. Keep in mind that the Gov most likely wont force highly innovative companies to participate as they are crucial for China. Alibaba, Tencent, DiDi et al should all pay up though, because if they wont they will be in trouble
Xi has plenty of time at the top. He will likely go for a 3rd term as well. As such maybe by the time he leaves, the economic situation could be better and then start making these "donations" a law so that it gets formalised.
Dont believe western misinfo. Xi is not a dictator and as such, that this "common prosperity" decision was taken it means that there is a lot of supporters inside the CPC for this. I would also remind people that mid August, the top party leaders (Xi included ofc) went for an informal meeting, and immediately after that ended, the whole thing started.
This means that a consensus has been formed in the CPC, and I assume in the society as well, especially after Covid.
To conclude, the next administration, when that may be, will follow the same decision until another consensus is reached.
We should also be aware that Xi could try to insert that into the constitution (IMO highly unlikely), or make it a law at the end of his term (2027, 2032?) in order to ensure that the policy will be followed even after he steps down
Ideally yes, but companies always try to do half-jobs and find loopholes. The CPC has left the details vague specifically for this reason. In this way, companies will try to ensure that they didnt make a low donation and so they will reach into their deep pockets and make a bigger donation than they would have planned without the policy being vague.
I expect that for this and next year this will be a kind of a pilot/trial and after the CPC sees the results it will move towards formalising the policy.
So are you saying Apple, Amazon and Facebook have garbage R&D?
Large profitable companies should pay their share of taxes, but not forced to "donate" their cash reserves. The right way to do it is to raise the tax rates, but not by some weird excuses of forced donation.
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Facebook 100% yes
Amazon 70% yes
Apple 70% yes
While they all do some important R&D, if you factor how big they are, how big their revenues/profits are, then they should be investing much much more into hard-science R&D.
This is also one of the reasons why a movement is now growing in the US for breaking go these huge companies (especially Facebook, Google).
Its not fashionable to stand for Big Tech in Congress right now
Big companies like Alibaba, Tencent and Apple have invested in a large number of smaller startup companies. These smaller startup companies create a lot of jobs and they are the ones making the innovation.
Yes, and they also create bigger monopolies for themselves and eventually destroying SMEs innovation.
Look at the ridiculous situation in China where Alibaba and Tencent basically owned the startups. Duopoly, cartel whatever