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chgough34

Junior Member
Registered Member
proelite said:
Chinese startups will do exactly that in China once they know that something works in the US and might also work in China.
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Chinese startups getting locked out of the 90% of the world that is not China is quite bad for them, as would be the deleterious effect of downstream firms that use Chinese startup inputs to improve business practices since they would have to
1) buy foreign and when Chinese startups get there, reconfigure their business, at substantial cost, to support local protectionism or
2) go without new innovation and run less efficient businesses or
3) wait for Chinese startups to develop (but if they have local protectionism - startups will have no incentive to innovate); and thus have more inefficient business practices
 
proelite

proelite

Junior Member
chgough34 said:
The 0 value in the FT is likely a definitional change and/or some regulatory evasion but the general directionality: an atrocious sentiment and business environment that has frozen equity investment in high-risk innovative businesses
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In many people's opinion, this would be called a smart diversion of resources to more productive forces. If something turns out to be a money printer elsewhere China can simply copy the idea domestically and beat the other company to global expansion.

chgough34 said:
Chinese startups getting locked out of the 90% of the world that is not China is quite bad for them, as would be the deleterious effect of downstream firms that use Chinese startup inputs to improve business practices since they would have to
1) buy foreign and when Chinese startups get there, reconfigure their business, at substantial cost, to support local protectionism or
2) go without new innovation and run less efficient businesses or
3) wait for Chinese startups to develop (but if they have local protectionism - startups will have no incentive to innovate); and thus have more inefficient business practices
Click to expand...

The US is 90% of the world? what?
 
H

HighGround

Senior Member
Registered Member
proelite said:
In many people's opinion, this would be called a smart diversion of resources to more productive forces. If something turns out to be a money printer elsewhere China can simply copy the idea domestically and beat the other company to global expansion.
Click to expand...

This is about private equity. What are you diverting and where?

proelite said:
The US is 90% of the world? what?
Click to expand...

US + EU + Japan and SK is like 30-35% of China's exports destination. But downstream wise, large portion of exports to Vietnam ultimately head to a US/EU, same with Hong Kong and other ASEAN countries.

But trade will never go down to zero. The big deal is that many of the advanced and high value products will want to be exported towards high value markets. The threat of bans and trade wars creates uncertainty and friction. Smart (private) money will want to wait until this trade uncertainty is over before investing.

I'm not dooming and glooming, but when assessing China's strengths and weaknesses, this limitation on China's private equity is not a good thing. China would be even better off if had more private equity investment. This is an unfortunate casualty of the US trade war, but the Chinese gov. should do more to address this. It also feeds into private spending and consumption as well. All of these things are ultimaetly interconnected.
 
proelite

proelite

Junior Member
HighGround said:
I'm not dooming and glooming, but when assessing China's strengths and weaknesses, this limitation on China's private equity is not a good thing. China would be even better off if had more private equity investment. This is an unfortunate casualty of the US trade war, but the Chinese gov. should do more to address this. It also feeds into private spending and consumption as well. All of these things are ultimaetly interconnected.
Click to expand...

As you stated, China is in an economic war right now. It's not the normal environment for businesses. The ultimate end is climbing up the value chain and breaking out of American economic suppression. Whatever means that not available for doing so, i.e. private equity / smart money, will be substituted with state money and funding.

In a life/death competition between nations, internal competition between corporations takes a back seat. Many inventions and breakthroughs were made during times of war, so as long as there is competition there will be growth.
 
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