USA talks with China can only be a good thing. It will take a long time until both parties are perfectly in sync but both need each other so it will have to work. USA is the world's largest consumer and China is the largest producer. China bankrolls USA so USA keeps buying Chinese goods. The ties are irrevocable.
Jacob. I totally agree with you. What I think is that every country has the right to protect its own industry esp when the local organizations are not as powerful. Not every country is like those Asian and African countries who let the imports rule through and are under too much pressure to apply protectionist policies. Although this kind of protectionism that is applied by China is against the free trade treaty but when you look at it from the Chinese point of view, they are doing what is earning the most for their economy.
Bruce, What's your opinion on the view that China's form of capitalism (state-managed) is different and so requires a rather different set of rules and regulations than what is applicable in the West. If China is growing with its mostly state-managed system, why should it conform with Western laws? The West knew this is different going into China so why should we expect them to conform with our own laws?
Bruce, none of the Chinese laws are favorable to corporate world. All there laws are based to promote countries capital investment and for generating internal revenue. They are very keen in attracting foreign investments, but they never promote any products from any MNCs. Most of the disputes are happened because of their monopolistic behavior and unilateral decisions. Their ultimate aim is to extract the foreign companies, for internal benefits and promote GDP growth. They never bothered or will think from investors point.
The point is debatable. If Apple invests directly in Chinese as permenant manufacturing unit, Chinese government may find it hard that all the profits are running out of the economy as the shareholders remain those residing abroad. Encouraging investors to list the company on Chinese stock markets may be a solution however, the investors might be forced not to do so by the parent country's government, i.e. the US.
However, with a growth to economy and the infrastructure development that are probable positive effects of investment in China, the Chinese government would find it appropriate to let the investment levels go up. Increase in exports would also increase as the manufacturing takes place in China and worldwide demand is fulfilled through it.
@waqas:I agree that foreign investment is a source of inflow of foreign currency. But China is already exporting a lot in the form of goods and manufacturing services to the world. If China encourages direct foreign investment, it may result in a reduction of exports of goods and services. For instance, take the example of Foxconn which is a major EMS to Apple and other leading brands. If instead of outsourcing manufacturing to Foxconn, Apple decides to invest directly into China in the form of its own factories, would such a move be beneficial for the Chinese government and economy? I am not sure.
"But the point here is whether China really wants the presence of US companies inside China? Would China get any additional benefits if US companies establish their factories in China directly?"
I think China would definitely want presence of all major companies including those from US. With foreign direct investment come in major benefits to the economy such as foreign currency inflows, unemployment levels go down, knowledge bank arrives through advanced processes and systems that are implemented at these large organizations and employees are trained with these introductions.
It is highly surprising to see China imposing barriers (such as legal barriers that Bruce mentioned) as I dont see any benefit to China from these. While we discuss the restrictive actions taken by China, we should not forget that despite all this, many US companies have their manufacturing facilities outsourced in China.
I agree that unless China improves the IP protection rights, foreign companies will not be encouraged to invest in China. But the point here is whether China really wants the presence of US companies inside China? Would China get any additional benefits if US companies establish their factories in China directly?
EBN Dialogue enables and encourages you to participate in live chats with notable leaders and luminaries. Not only editors and journalists, but the entire EBN community is able to comment and ask questions. Listed below are upcoming and archived chats.
Thailand Stages a Comeback Join EBN contributor Jennifer Baljko on Thursday August 23, 2012, at 11:00 a.m. EST for a live chat on how electronic manufacturers in Thailand have shored up their supply chain to reduce the impact of future natural disasters.
Microsoft Surface: Potential Winners & Losers What are the implications for the electronics industry supply chain of Microsoft Corp.'s decision to launch its own tablet PC? Join industry veteran and EE Times' systems and OEM expert Rick Merritt on Tuesday, July 3, at 12:00 pm EDT for a Live Chat on this subject.
Join EBN contributor Jennifer Baljko on Thursday August 23, 2012, at 11:00 a.m. EST for a live chat on how electronic manufacturers in Thailand have shored up their supply chain to reduce the impact of future natural disasters.
Peter Drucker famously said "Trying to predict the future is like trying to drive down a country road at night with no lights while looking out the back window." Yet in the razor's-edge world of electronics—with a lean supply chain and just-in-time demands—the need to know the future is vital.
You've heard the saying "the No. 1 supply chain risk is your people." That hasn't always been the case. But today's complex global supply chain requires a new type of multitalented employee. It's one who understands, finance, marketing, economics, is savvy with technology, graceful with relationships and can think analytically.
Where are these people? Are universities properly preparing the next generation supply chain professionals? How do train your existing workforce for these new, demanding positions?
Brian Fuller, editor-in-chief of EBN, will lead a 60-minute Avnet Velocity panel discussion that will ask and answer these and other questions swirling around today's supply-chain talent challenges.