Chinese Economics Thread
- Thread starter Norfolk
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CNN is not telling the whole truth and the title is wrong. They are wrong to imply that China is "uninvestable" last year because they conveniently left out the fact that direct foreign investment in China in 2021 was a record high.
And CNN is wrong to imply that China is making a "comeback" this year because DFI have never stop following in inspite of all the negatives they mentioned i.e tech cracked downs, Real estate stumbles and locked downs.
The direct and indirect consequences of the Ukraine war, covid locked downs, supply chains troubles and inflations all over the world resulted in a net positives for China, thus more foreign investments. And CNN is spinning it as a "comeback".
To put the designed capacity of the storage facility in perspective, in 2021 China imported 16.5 billion cubic meters of gas from Russia. So the facility can store 29% of the annual gas import from Russia.
Lethe
Captain
How does a "unified domestic market" interact with regional inequality across China and policies intended to address this?
Who knows.. That's probably going to be a big thing for Xi's third term. Too many interests involved on local protectionism.
Maybe they will start by putting up some clear red lines on what is not allowed to do and then start slowly building up these rules
Obviously the curent system of every local governement adding barriers to companies entering their market is not sustainable.
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A unified market will decimate smaller and mid size companies. It will cause a lot of job losses. But it will be necessary for more Chinese companies to be able to reach critical mass to reach global scale and increase investment in R&D. The government will have to compensate the losers somehow to keep social justice.
Not only that. It also includes the politicians career.
Today they can say " I cultivated X market entities, including X high-tech companies and X companies witn RMB >500m revenue." Look how good I have been as an administrator/politician/policy maker, give that promotion now!
Something along those lines. Cultivating strong local companies is a strong signal/indication that you are good at your job and you should be promoted. However, as usual, they manage to find tricks on this. They put up local barriers to external companies outside of their local gov jurisdiction and thus give space for local companies to grow.
What this does for China as a whole, is to build up many small sized companies but less huge companies with enough revenue base to compete globally and perform cutting edge R&D.
I can't even imagine how difficult it is going to be to start changing this system
In the long-run, if a unified market results in larger and more efficient companies, it's something that has to happen.