Chinese Economics Thread

ZeEa5KPul

Colonel
Registered Member
Common Prosperity is euphemism for wealth redistribution. China went through all that before.
Having wealth taken from you is nothing you'll ever have to worry about. Why do you defend people who consider you no more than an insect?
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.
Same question.

I understand the rich doing whatever they can to clutch onto their wealth. I don't understand the people who defend them without even being paid to and who go against their own interest to do so. I'd like you, so perhaps both of you could explain it.

Not that your market fundamentalist sophistry is going to change China's policy one smidgen; I'm just curious.
 

gadgetcool5

Senior Member
Registered Member
Only supporting hardware and neglecting software is the mistake the Japanese made, which led to their decline. It's an issue for pretty much all of East Asia actually. Huawei already proved that when people are forced to choose between software and hardware, they will be loyal to the apps they use and easily switch hardware. Theu would rather have their gmail on a crappier phone than no gmail on their huawei. That's why Huawei tried thread into software with Harmony OS too late. But until now, China was the overall exception in Asia that it had strong software companies like Alibaba and Tencent too. That was the great advantage China had that made it better than South Korea or Japan. The government should have strengthened those companies even further by banning windows and developing a domestic OS, and banning Google chrome.
 

KYli

Brigadier
Only supporting hardware and neglecting software is the mistake the Japanese made, which led to their decline. It's an issue for pretty much all of East Asia actually. Huawei already proved that when people are forced to choose between software and hardware, they will be loyal to the apps they use and easily switch hardware. Theu would rather have their gmail on a crappier phone than no gmail on their huawei. That's why Huawei tried thread into software with Harmony OS too late. But until now, China was the overall exception in Asia that it had strong software companies like Alibaba and Tencent too. That was the great advantage China had that made it better than South Korea or Japan. The government should have strengthened those companies even further by banning windows and developing a domestic OS, and banning Google chrome.
Not entirely true, Japanese semiconductor industry is systematically destroyed by the US through sanctions, coercion, and trade embargo. US has also supported Korea technology industry to weaken the Japanese companies. And through Plaza accord, forced tech transfers, intimidation, and forced relocation, the US has successfully weakened Japan economy and high flying companies.

In addition, Japan failed to embrace the rise of China like Korea, Germany, and Taiwan did has also left them behind. Software only played a minor role in the decline of Japan as both Korea and Taiwan did very well for the last two decades even though they don't have great software companies.

Tencent and Alibaba have many great application software but they never venture into more meaningful software development until now. What the Chinese government did actually force them to be innovative instead of relying of their monopolies to make easy money.

On the other hand, the US government didn't have the gut to confront Google or FB and was scared off by the claims made by FB that the US needs monopolies such as FB to be competitive and maintain domination against Chinese companies. In the end, the US government would only be focused upon destroying Chinese champions such as Huawei because it doesn't have the stomach to breakup tech monopolies.
 

Tyler

Captain
Registered Member
Having wealth taken from you is nothing you'll ever have to worry about. Why do you defend people who consider you no more than an insect?

Same question.

I understand the rich doing whatever they can to clutch onto their wealth. I don't understand the people who defend them without even being paid to and who go against their own interest to do so. I'd like you, so perhaps both of you could explain it.

Not that your market fundamentalist sophistry is going to change China's policy one smidgen; I'm just curious.
Large corporation had already paid their share of corporate taxes. Tax rates can be raised if needed. If the company pays dividends to its shareholders, these shareholders need to pay taxes on dividends received. Remember that companies pay dividends from their after tax profits. And then when the shareholders decide to cash out their shares, capital gains taxes will be paid as well.
 

Tyler

Captain
Registered Member
Not entirely true, Japanese semiconductor industry is systematically destroyed by the US through sanctions, coercion, and trade embargo. US has also supported Korea technology industry to weaken the Japanese companies. And through Plaza accord, forced tech transfers, intimidation, and forced relocation, the US has successfully weakened Japan economy and high flying companies.

In addition, Japan failed to embrace the rise of China like Korea, Germany, and Taiwan did has also left them behind. Software only played a minor role in the decline of Japan as both Korea and Taiwan did very well for the last two decades even though they don't have great software companies.

Tencent and Alibaba have many great application software but they never venture into more meaningful software development until now. What the Chinese government did actually force them to be innovative instead of relying of their monopolies to make easy money.

On the other hand, the US government didn't have the gut to confront Google or FB and was scared off by the claims made by FB that the US needs monopolies such as FB to be competitive and maintain domination against Chinese companies. In the end, the US government would only be focused upon destroying Chinese champions such as Huawei because it doesn't have the stomach to breakup tech monopolies.
Chinese companies are now facing foreign sanctions and domestic intimidation at the same time. Big Chinese technology companies need the support of their government to compete against foreign big tech companies.

Tencent and Alibaba have already invested in a lot of smaller technology startups, the same way Apple, Amazon and Microsoft did.
 

ZeEa5KPul

Colonel
Registered Member
Large corporation had already paid their share of corporate taxes. Tax rates can be raised if needed. If the company pays dividends to its shareholders, these shareholders need to pay taxes on dividends received. Remember that companies pay dividends from their after tax profits. And then when the shareholders decide to cash out their shares, capital gains taxes will be paid as well.
Thank you for this amazingly novel information.
 

KYli

Brigadier
Chinese companies are now facing foreign sanctions and domestic intimidation at the same time. Big Chinese technology companies need the support of their government to compete against foreign big tech companies.

Tencent and Alibaba have already invested in a lot of smaller technology startups, the same way Apple, Amazon and Microsoft did.
Both Tencent and Alibaba got 95% of their revenue and profits from China. What can the US do to these companies, basically nothing. Sanctions and intimidation against Alibaba or Tencent would hurt the US more than China.

Supporting Tencent and Alibaba to continue to exploit their employees, destroy SMEs through monopolies, use derivatives to overleverage and passing risks to banks, make threats against local government and central government agencies. No thanks!

Compete against foreign big tech companies, other than gobbling up gaming companies Tencent is no threat to FB. Alibaba is just an extension of China export might. These two companies don't compete directly with foreign big tech.

Most of these startups were forced to take Tencent or Alibaba money. Otherwise, they don't get accessed to the ecosystem monopolized by Tencent or Alibaba which is precisely what Chinese government doesn't want to happen.

And Apple, Amazon, and Microsoft have been slacking. Why, because they are monopolies.
 

Sincho

Junior Member
Registered Member
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3 Sep 2021 22:36:57 UTC


OPINION
Xi Jinping risks toppling China's tech house of cards
Beijing ignores lessons of the recent past at its peril


Nina Xiang
September 4, 2021 05:00 JST


Employees work on the production line of silicon wafer at a factory in Jiaxing on May 25: China's semiconductor industry is one example where decades of heavy government intervention failed to achieve official objectives. © VCG/Getty Images
Nina Xiang is the founder of China Money Network, a media platform tracking China's venture and tech sectors. She is the author of "Red AI: Victories and Warnings from China's Rise in Artificial Intelligence" and "US-China Tech War: What Chinese Tech History Reveals About Future Tech Rivalry."
China's President Xi Jinping is on a mission to re-engineer the world's second-largest economy. But he must be delicate in this endeavor or risk toppling the Chinese tech powerhouse that took four decades to build and sits at the foundation of the nation's economy.
Data security, privacy protection, curbing monopolies and common prosperity are all worthy causes, but the line between disciplining the market and distorting it is fluid and thin. So far, Beijing's efforts to tame the tech sector are not only self-contradictory but appear to be ignorant of history, while offering little in the way of transparency and predictability.
Against the backdrop of the partial U.S.-China tech decoupling, such confusion has the potential to cause real damage to the future of China's technology sector.
The biggest misconception about how China achieved its tech prowess is that it is a result of government support and industrial policy, with terms like state capitalism and whole-nation model often thrown around when experts discuss China's "impressive" tech power. They are the same terms being used to justify U.S. plans to spend hundreds of billions of dollars to boost its own innovation to "outspend" China.
History shows that government support -- at the very least -- did not always produce the desired outcome. China's semiconductor industry is one example where decades of heavy government intervention failed to achieve official objectives.
Government subsidies, instead of producing national champions, often propped up commercially unviable zombie companies and led to fierce price wars that ultimately slowed the sector's development. Overall, research has found that although industrial policy in China improves output while the policy is in effect, there is no evidence that output continues to improve once state support is taken away.
China's most valuable tech companies, including Alibaba Group Holding, Tencent Holdings, ByteDance and Meituan, were all founded by individual entrepreneurs and financed by venture capital. It was actually government nonchalance -- not active support -- that made way for these companies' robust growth.
It is these same companies -- winners that prevailed in a fiercely competitive market -- that form the core strength of China's tech industry. They represent the most advanced segment of China's economy, and their capabilities are on a par with -- or are even superior to -- their international peers.
Aside from the success of the copy-to-China model in the e-commerce sector, China's tech advances are a byproduct of global supply chain migration. Global companies reallocating low-end and low-value supply chains to China created the world's factory, on top of which emerged Chinese consumer tech companies like Xiaomi, Vivo, Midea, Lenovo and drone maker DJI.


Workers on the assembly line at a plant of Lenovo and Motorola phones in Wuhan, pictured on Aug. 20: China's tech advances are a byproduct of global supply chain migration. © FeatureChina/AP
Still, Beijing's policymakers seem to be ignoring the lessons of the recent past. Moves to buy stakes in Chinese tech companies, appoint their own directors, as well as advocating how private enterprise can help achieve the political goal of common prosperity, could end up damaging the very mechanisms that were the real drivers of China's tech advances.
Painful memories of failed state-led semiconductor projects during the 1990s show the danger of government intervention when it comes to enterprise operations. When such programs are being developed, it is often impossible to know where to intervene and when to stop. When global supply chains and the accompanying know-how no longer migrate to China, the local tech sector will face higher hurdles to upgrade itself.
Moreover, the haphazardness of some regulatory actions, including Ant Group's abrupt cancellation of initial public offering and Didi Global's curiously timed data security investigation, could further tear the bonds linking the global digital economy. They risk cutting off or limiting an important financing channel for Chinese tech companies and hurting their ability to achieve economies of scale. All of which contradict China's 2035 objective to be at "the forefront of innovative countries."
While China's tech sector has always operated under a degree of policy uncertainty, the compounding effect of recent government actions has created real concerns regarding how Beijing will manage the sector going forward. Already, it is hurting Chinese tech companies' global competitiveness. America's largest tech companies are now worth several times more than China's tech giants. Just two years ago, the valuation gap seemed to be swiftly closing.
At the most fundamental level, Xi Jinping shares the same utilitarian view on science and technology as previous Chinese rulers across millenniums: Technology is a governing tool that can be used to ensure economic development, social stability and the ruling party's grip on power.
"The belief in the value of scientific truth is not derived from nature but is a product of definite cultures," said German sociologist Max Weber. Lacking such a culture may be the reason why long-term and sustained tech progress in China cannot be taken as a given.
Combined with risky and haphazard government intervention, it could too easily weaken a powerhouse already built on less-than-solid foundations.
 

Tyler

Captain
Registered Member
Both Tencent and Alibaba got 95% of their revenue and profits from China. What can the US do to these companies, basically nothing. Sanctions and intimidation against Alibaba or Tencent would hurt the US more than China.

Supporting Tencent and Alibaba to continue to exploit their employees, destroy SMEs through monopolies, use derivatives to overleverage and passing risks to banks, make threats against local government and central government agencies. No thanks!

Compete against foreign big tech companies, other than gobbling up gaming companies Tencent is no threat to FB. Alibaba is just an extension of China export might. These two companies don't compete directly with foreign big tech.

Most of these startups were forced to take Tencent or Alibaba money. Otherwise, they don't get accessed to the ecosystem monopolized by Tencent or Alibaba which is precisely what Chinese government doesn't want to happen.

And Apple, Amazon, and Microsoft have been slacking. Why, because they are monopolies.

Alibaba got 95% of their revenue and profits from China, because they have a hard time expanding overseas. Luckily alibaba owns Lazada in south east Asia. Tencent is better since they have a big gaming footprint worldwide. But wechat is still mostly used in China.

Tencent is a threat to facebook, if tencent manages to promote wechat against whatsapp. Tencent is certainly dominating over microsoft and Sony, since tencent is able to expand its footprint worldwide by acquiring game publishers. Now if tencent's ecosystem is weakened in China, where else do they find the resource to expand overseas?

Many Chinese startups are taking seed money from Tencent or Alibaba. Are you expecting investments from monopolies like China Mobile or PetroChina for these innovative startups?

Apple, Amazon, and Microsoft are not slacking at all. They making more money over Alibaba, Tencent and Huawei. Apple, Amazon, and Microsoft are investing in even more startups worldwide.
 
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