I have a fairly dim view of China's ethics and respect for human rights, and so tend to suspect the worst; however, the hyper-competition in China's production industries has led to product ecosystems rife with unsafe materials (e.g. lead), and other cut corners. Now that many Chinese are able to purchase the things they produce, I can imagine that safety regulations are starting to be demanded by the public, and that is a good thing. Nevertheless, I am sure this push will also be used to further crackdown on political dissent and to consolidate power, I can well imagine.
> I can imagine that safety regulations are starting to be demanded by the public, and that is a good thing
I remember seeing a sign at the Hong Kong border when going to the mainland warning that there was a maximum amount of infant formula that could be taken across. Hopefully this is that crackdown.
USSR followed the same path when their citizens grumbled about liberalization. State owned enterprises are now seizing power from private companies and foreign entities. Pretty soon you are going to see replays of USSR SoE dominance such as lack of innovation, bread lines, inefficient operation, and corruption. It seems xi jing ping did not fully study the downfall of USSR after all.
This analogy works on a few levels, but not in others. One key differences between the USSR and China is that the USSR did not have a close economic relationship with the U.S., nor an economy near parity to the U.S.'s. There might be a decline of Chinese power, but it will not take a similar path, imo.
I've been hearing from pundits that the collapse of China is around the corner for the past 25 years, and I have yet to see why I won't be hearing about it for the next 25.
Do you really think that the Chinese government have not studied the causes and effects of the ussr collapse enough? The other large communist nation who was also their neighbour? Or is this just some weird rhetoric you're using
The causes of the downfall of the USSR seems to always line up with whatever political angle the writer has. Leftwing can point to a lack of (political) liberalization or poor planning, rightwing can point to not going further on (economic) liberalization. It's a topic that is really valuable to think tanks based on their politics and their donor's politics.
> they really are keen on annoying investors aren't they. i wonder for how long tencent and the other conglomerates will obey these orders
They will obey as long as the state has power, which will be for the far foreseeable future.
The Chinese government has been smart enhance its power by keeping its domestic businesses in a strictly subordinate position and creating an environment were foreign businesses cooperate because dependence is the best business decision (e.g. Apple has no "plan B," it's China all the way for them).
And it might work out for them, especially if foreign nations continue to complacently indulge in free market Kool-Aid.
> Apple has no "plan B," it's China all the way for them
I know many people who work, or worked for Apple on the hardware side.
I assure you, Apple has "plan B," and it been trying executing on it relentlessly for the last 2 years — just without any success.
Vietnam's total electronics industry output is like a single district in Dongguan. The supply chain is very, very immature there, despite it already towering above any other place in developing Asia, but China.
If what my buddies tell me of Apple's internal assesment of countries is correct, no other countries are even close to a 2nd place alternative on that, except for Taiwan, which is their "plan C" — a sure to work, but expensive option if everything else fails.
i wonder for how long tencent and the other conglomerates will obey these orders
Strange question with what I would consider to be an obvious answer. They will obey for as long as they want the profits they get from China's market of video game players for instance. Which strikes me as pretty much "forever".
What company is gonna leave and give that kind of gift wrapped profit center to someone else voluntarily?
Any company, when the realize that it's no longer a profit center, and isn't likely to return to being a profit center any time soon.
The trick for China is to get the regulations in place that are necessary, without putting so many in place that it strangles profitability (and therefore destroys business). But come to think of it, that's the trick for any country when regulating.
"What company is gonna leave and give that kind of gift wrapped profit center to someone else voluntarily? "
When it's no longer a gift.
These companies are sometimes high flying startups along the lines of US firms and they require access to capital.
If their valuations are clipped by an order of magnitude because of regulatory apparatus (i.e. can't list in the US and American investors have no appetite for Chinese exchanges), then this will be a problem for a lot of businesses.
TikTok is getting big in the US and the West where margins are a lot fatter, it could feasibly make more sense for Bytedance to jump ship and become an American-based company with a Chinese workforce. Obviously that's hugely speculative but just an example.
It's like any bit of regulation it has a bunch of externalities. Some may be pretty bad for the company. Maybe, maybe not.
> i wonder for how long tencent and the other conglomerates will obey these orders
Probably as long as the regulation exists. It is amazing, but once there is the real threat of personal, physical imprisonment, most CEOs are pretty good about making sure regulations get followed despite any impact on the stock price.
If they can make Jack Ma disappear for months over some casual comments - I think executives at these conglomerates understand the message pretty clearly.
My tinfoil hats say that they realize that we are in the age of ultra loose monetary policy, so abundance of capital. Therefore it's time to clean the house. Gonna spook investors of course, but hey all other places offer zero or minus yield rate, China still has positive yield anyway.
If you are still manufacturing in China, you are a fool. Get ready for your factory to be seized/shut down in the next couple of years, or be taxed/fines so much that you have no choice but to leave. Or get ransomed by the local factory that you are working with (like extreme delay of products or shoddy products delivery).
1. Why would there be a mass exodus, any shareholder board will fire a C-suite that gives up selling to the world's fastest growing market / building in the world's most capable manufacturing market. Expecting one is just wishful thinking. Boards and executives tend to care about the bottom line, and very rarely about political grandstanding.
2. Even if there were a mass exodus (Which won't happen, because #1), the factories, the expertise, the knowledge base and the human capital those investments paid for aren't going to disappear. All that will happen is that they will become China-owned, as opposed to partially China-owned.
> “Strengthen the construction of the national ‘Internet + supervision’ system, and realize the integration and aggregation of data from supervision platforms by the end of 2022.”
I'll bet they're pleased with you-know-who's you-know-what.
"Internet+ supervision" doesn't refer to supervision of the internet, but using the internet to make supervisory agencies in general more efficient. E.g. this post by the Zhejiang Archives from 2019 http://www.zjda.gov.cn/art/2019/6/10/art_1378485_34553497.ht... mentions that employees no longer have to carry around documents and manually fill them in to do their work, but can use an app for that.
The part you quoted probably means they want to get to the point where if someone in Jiangsu needs documents archived in Zhejiang, they can just access them through a unified platform instead of having to ask their colleagues there to send them over.
Surely supervision/surveillance of a person covers all their Internet usage too, right? Google Translate makes it sound like this will just bring massive scale and automation to the types of surveillance and re-education that are already in place:
“In accordance with the requirements of the State Council’s ‘Internet + Supervision’, Zhejiang has vigorously promoted the pilot work of a unified administrative law enforcement and supervision platform across the province. The platform includes dual-random administrative law enforcement, a list of law enforcement matters, supervisory account management, schedule supervision and inspection, special law enforcement inspection, grassroots four-platform linkage management, departmental collaborative management and other module functions. Through this system, it is possible to enter law enforcement information online, transfer law enforcement procedures online, supervise law enforcement activities online, push law enforcement decisions in real time, and publicize law enforcement information in a unified manner, so as to realize the entire process of administrative law enforcement. At the end of May this year, the platform launched a handheld law enforcement app on Zhezheng Ding. Law enforcement officers can log in to the handheld law enforcement system using Dingding accounts. The handheld law enforcement APP system has four functional modules: supervision and inspection, supervision object management, classified supervision, inquiry and work assistance, which can meet the requirements of various inspection methods such as incident verification, daily inspection, and random inspection in administrative law enforcement inspection. Summarize law enforcement data with complete functions.”
explicit goal is actually the opposite and it's likely not just empty words. If you've done business in China as a foreigner over the last few years the court system in particular has actually become more reliable and noticeably quicker. It used to be way more arbitrary and chaotic about ten-ish years ago.
China has a court system? I always thought Chinese law enforcement is basically, "Do something the government doesn't like and you will disappear. Try to run away overseas, and we'll make you an offer you can't refuse: Commit suicide or your family will suffer in your place [1]."
I want to say something glib here but straightfaced I will ask if you are referring to reliably improving the speed and efficiency of the courts' 99.965% [1] conviction rate because that's a number that makes some of my softwares vendors' SLAs look rickety in comparison to.
Im by now convinced that xi jinping, in the back of his mind, hates the communist party and its apparatus, and wants to destroy it by going back to a north-korea style totalitarianism, against which the citizens will rebel en mass.
I take a much dimmer view of this. Xi knows that climate change is coming and its going to be really bad. One of the issues coming from climate change is food shortage.
Food shortage is going to cause riots in US, Canada, and EU for sure. Just based on the vaccine protests/riots, imagine what will happen when rationing is introduced.
He's going to crack down hard and control the population, so when the inevitable comes there is acceptence.
Xi is just trying to centralize party control over the country, and solidify his grip on it. This is very common in dictatorships, take North Korea for example.
Right now that's true. Look at food production this year across the globe, we're seeing dramatic output drops due to climate change (fire, floods, etc). Imagine 20 years of this.
>Food shortage is going to cause riots in US, Canada, and EU for sure
The US (along with France) can easily supply all the food they need to its citizens. Along with the alliances with Mexico and Canada, the US is not going to have food shortages, much less riots.
China, on the other hand, is definitely screwed on this front. All of its neighbors are either outright enemies or begrudging allies. As the global order continues to collapse, China will see constraints on its shipping routes that will lead to shortages of key goods.
The food shortages won't hit as bad, though, since the population is declining. Just not fast enough, unfortunately.
and here are some scientific studies projecting future crop failures:
Schlenker and Roberts, 2009. Nonlinear temperature effects indicate severe damages to US crop yields under climate change. PNAS, 106(37), pp.15594-15598
https://www.pnas.org/content/106/37/15594.full
Schauberger et al, 2017. Consistent negative response of US crops to high temperatures in observations and crop models. Nature Comms, 8, p.13931.
https://www.nature.com/articles/ncomms13931
If you take it as a simple additive 2°C increase in temperature sure, if you instead trust the models predicting significantly more unstable weather on both ends of the temperature spectrum then not so much.
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I remember seeing a sign at the Hong Kong border when going to the mainland warning that there was a maximum amount of infant formula that could be taken across. Hopefully this is that crackdown.
I don't know if you really mean it or you are forced to well imagine it so your comment won't be downvoted.
They will obey as long as the state has power, which will be for the far foreseeable future.
The Chinese government has been smart enhance its power by keeping its domestic businesses in a strictly subordinate position and creating an environment were foreign businesses cooperate because dependence is the best business decision (e.g. Apple has no "plan B," it's China all the way for them).
And it might work out for them, especially if foreign nations continue to complacently indulge in free market Kool-Aid.
I know many people who work, or worked for Apple on the hardware side.
I assure you, Apple has "plan B," and it been trying executing on it relentlessly for the last 2 years — just without any success.
Vietnam's total electronics industry output is like a single district in Dongguan. The supply chain is very, very immature there, despite it already towering above any other place in developing Asia, but China.
If what my buddies tell me of Apple's internal assesment of countries is correct, no other countries are even close to a 2nd place alternative on that, except for Taiwan, which is their "plan C" — a sure to work, but expensive option if everything else fails.
Strange question with what I would consider to be an obvious answer. They will obey for as long as they want the profits they get from China's market of video game players for instance. Which strikes me as pretty much "forever".
What company is gonna leave and give that kind of gift wrapped profit center to someone else voluntarily?
The trick for China is to get the regulations in place that are necessary, without putting so many in place that it strangles profitability (and therefore destroys business). But come to think of it, that's the trick for any country when regulating.
When it's no longer a gift.
These companies are sometimes high flying startups along the lines of US firms and they require access to capital.
If their valuations are clipped by an order of magnitude because of regulatory apparatus (i.e. can't list in the US and American investors have no appetite for Chinese exchanges), then this will be a problem for a lot of businesses.
TikTok is getting big in the US and the West where margins are a lot fatter, it could feasibly make more sense for Bytedance to jump ship and become an American-based company with a Chinese workforce. Obviously that's hugely speculative but just an example.
It's like any bit of regulation it has a bunch of externalities. Some may be pretty bad for the company. Maybe, maybe not.
Probably as long as the regulation exists. It is amazing, but once there is the real threat of personal, physical imprisonment, most CEOs are pretty good about making sure regulations get followed despite any impact on the stock price.
Deleted Comment
Edit: If
2. Even if there were a mass exodus (Which won't happen, because #1), the factories, the expertise, the knowledge base and the human capital those investments paid for aren't going to disappear. All that will happen is that they will become China-owned, as opposed to partially China-owned.
I'll bet they're pleased with you-know-who's you-know-what.
The part you quoted probably means they want to get to the point where if someone in Jiangsu needs documents archived in Zhejiang, they can just access them through a unified platform instead of having to ask their colleagues there to send them over.
“In accordance with the requirements of the State Council’s ‘Internet + Supervision’, Zhejiang has vigorously promoted the pilot work of a unified administrative law enforcement and supervision platform across the province. The platform includes dual-random administrative law enforcement, a list of law enforcement matters, supervisory account management, schedule supervision and inspection, special law enforcement inspection, grassroots four-platform linkage management, departmental collaborative management and other module functions. Through this system, it is possible to enter law enforcement information online, transfer law enforcement procedures online, supervise law enforcement activities online, push law enforcement decisions in real time, and publicize law enforcement information in a unified manner, so as to realize the entire process of administrative law enforcement. At the end of May this year, the platform launched a handheld law enforcement app on Zhezheng Ding. Law enforcement officers can log in to the handheld law enforcement system using Dingding accounts. The handheld law enforcement APP system has four functional modules: supervision and inspection, supervision object management, classified supervision, inquiry and work assistance, which can meet the requirements of various inspection methods such as incident verification, daily inspection, and random inspection in administrative law enforcement inspection. Summarize law enforcement data with complete functions.”
[1] https://www.theguardian.com/us-news/2020/jul/07/china-christ...
[1] https://www.chinajusticeobserver.com/a/what-is-the-convictio...
Dead Comment
Deleted Comment
Food shortage is going to cause riots in US, Canada, and EU for sure. Just based on the vaccine protests/riots, imagine what will happen when rationing is introduced.
He's going to crack down hard and control the population, so when the inevitable comes there is acceptence.
I'm curious how that will work. Are you saying CCP propaganda on TikTok is going to ease famine?
The US (along with France) can easily supply all the food they need to its citizens. Along with the alliances with Mexico and Canada, the US is not going to have food shortages, much less riots.
China, on the other hand, is definitely screwed on this front. All of its neighbors are either outright enemies or begrudging allies. As the global order continues to collapse, China will see constraints on its shipping routes that will lead to shortages of key goods.
The food shortages won't hit as bad, though, since the population is declining. Just not fast enough, unfortunately.
https://www.agupdate.com/livestockroundup/markets/corn-proje...
some other examples of crop failures currently happening
https://www.nationalgeographic.com/environment/2019/06/midwe...
https://www.cnbc.com/2019/07/19/extreme-heat-wave-hits-us-fa...
https://www.theguardian.com/australia-news/2019/may/15/austr...
https://www.theguardian.com/environment/2018/jul/20/crop-fai...
https://mobile.abc.net.au/news/2019-10-02/low-rice-crop-lead...
https://www.telegraph.co.uk/global-health/climate-and-people...
https://phys.org/news/2019-12-climate-whammy-corn-belt.html
https://www.telegraph.co.uk/news/2019/11/12/britain-facing-p...
https://weather.com/science/environment/news/2019-08-01-drou...
https://phys.org/news/2020-01-atlantic-circulation-collapse-...
https://phys.org/news/2019-12-climate-threat-global-breadbas...
https://phys.org/news/2019-12-large-atmospheric-jet-stream-g...
and here are some scientific studies projecting future crop failures:
Schlenker and Roberts, 2009. Nonlinear temperature effects indicate severe damages to US crop yields under climate change. PNAS, 106(37), pp.15594-15598 https://www.pnas.org/content/106/37/15594.full
Mora et al, 2015. Suitable days for plant growth disappear under projected climate change: Potential human and biotic vulnerability. PLoS bio, 13(6), p.e1002167 https://journals.plos.org/plosbiology/article?id=10.1371/jou...
Schauberger et al, 2017. Consistent negative response of US crops to high temperatures in observations and crop models. Nature Comms, 8, p.13931. https://www.nature.com/articles/ncomms13931
Sakschewski et al, 2014. Feeding 10 billion people under climate change: How large is the production gap of current agricultural systems?. Ecological modelling, 288, pp.103-111 https://www.researchgate.net/publication/263472623_Feeding_1...
Liang et al, 2017. Determining climate effects on US total agricultural productivity. PNAS, 114(12), pp.E2285-E2292 https://www.pnas.org/content/114/12/E2285?collection=
Not saying it’s a good thing overall of course.