Obama needs to crack down on China
The partnership between
the United States and China plays an extremely vital role in the world economy.
With the two largest economies and populations in the world it is very important
for the two countries to find some middle-ground. $579 billion goods and
services were traded between the United States and China in 2012. Two-way trade
and investment between the two nations boomed, which benefits consumers and
businesses alike. This partnership increases the understanding of cultural differences
between the two nations.
Problems
began to arise as there were new barriers for foreign-owned company operations
to establish production. Other problems arose through the regulatory system as
intellectual property theft became rampant which restricted international companies
to conduct business in China. Targeting American and other Western companies
for regulatory abuse is causing international enterprises to question if doing
business with China is in their best interests. Qualcomm is a prime example of
this Chinese abuse private foreign companies were experiencing. Qualcomm was
forced to pay nearly a $1 billion fine for alleged violations of China’s
antitrust law. The Chinese government was also found restricting American tech
companies stating that there were new cyber-security regulations that were put
into place. Another government abuse case came from the intervention of the
meat-processing company OSI Group. Local Chinese authorities abused the nation’s
propaganda by using state-owned television station to report news.
China
still gained $119.6 billion in foreign direct investment last year which
attracts international businesses. Foreign companies will continue to be
cautious, however, because United States investment into China has continued to
decline. This is mainly from the political and economic uncertainty and
corruption the government is known for. Privately owned firms will have to be
careful in conducting business with China as regulations grow and propaganda
continues to be controlled by state-owned enterprises.
http://www.cnbc.com/2015/09/09/-down-on-china-shakedowns-commentary.html
2 comments:
I remember when the Qualcomm incident occurred not too long ago. It seems as though the Chinese government is trying to squeeze cash out of every crevice they can. It is unfortunate to see such an increase in regulation, but it may be a result of China trying to restrict foreign involvement in their country. The devaluation shows that China most likely wants to be exporting, not importing. Maybe further regulation and pushing away foreign presence is China's way of saying it wants to be independent and not rely on foreign companies to drive its exports.
It is discomforting to find that China has been implementing so much corruption in doing businesses with American (and other Western) companies. Considering that China has one of the largest economies in the world, many companies would be seeking business there, as it would be beneficial to their profitability. However, in the future it seems that businesses should be warned of the sketchiness behind China's global economic ties.
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