Last year, Jeffrey R. Immelt of G.E. complained to a meeting of business leaders in Rome that it was getting harder for foreign companies to do business in China, and he expressed a growing irritation that China was protecting its own national companies at the detriment of American companies.
This from the nation that will not allow the import of meat and dairy products?
American multinational corporations, experts said, are hurt by Chinese regulations that openly favor Chinese companies over foreign ones for government contracts. These rules, which are intended to stimulate technological innovation in China, have the effect of cutting American and other non-Chinese companies out of many of the big contracts there.
"U.S. companies have issues with China in many different business sectors,” said John Frisbie, president of the U.S.-China Business Council in Washington. “But if I were to point to one single issue over the last year, it has been China’s innovation policies and how they link to government procurement.”
This from the nation who provides aid only in the form of payment to US companies for product supplied to the recipient of the aid? The nation that promotes its generosity on the basis of protected industries? “Provide the fish, not the fishing line…”
While nationalistic rules that favor Chinese companies affect technology and entertainment giants, China’s cheap currency undercuts tens of thousands of small-scale American manufacturers — companies that still make their products at home.This is the argument for China to float the Renmimbi. NZ went through that process 20 years back. Frankly, I don’t think that we have suffered as a nation, or as an economy. Quite the reverse in fact. Would we have the likes of Rakon and Fonterra if we had not had open border trading? Quite unlikely I think. Remember that Rakon started as a “Ma and Pa” company, Fonterra still is (at its roots) a co-operative of NZ farmers.
“The small mom-and-pop companies, which are getting crushed by the renminbi, you never hear from them,” said Nicholas R. Lardy, an expert on the Chinese economy at the Peterson Institute for International Economics. “They don’t really have a voice. They just shrink and go out of business.”
Thanks, NYT, I enjoyed that.