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1/8
Very interesting article by @DJMatthewDalton: "Western officials and executives say financial support from the Chinese government allows Chinese-owned manufacturers overseas to operate on razor-thin margins or at a loss, while...
Very interesting article by @DJMatthewDalton: "Western officials and executives say financial support from the Chinese government allows Chinese-owned manufacturers overseas to operate on razor-thin margins or at a loss, while...
2/8
they grab market share or serve the strategic objectives of the government. The problem, they say, is particularly difficult to address when the manufacturer in question is operating inside a Western market."
they grab market share or serve the strategic objectives of the government. The problem, they say, is particularly difficult to address when the manufacturer in question is operating inside a Western market."
3/8
I remember almost identical articles 30 years ago about the activity of Japanese companies abroad. This perhaps suggests just how unsustainable this process might be, or else why did Japan Inc. eventually abandon it just as growth was slowing domestically? Because, I'd...
I remember almost identical articles 30 years ago about the activity of Japanese companies abroad. This perhaps suggests just how unsustainable this process might be, or else why did Japan Inc. eventually abandon it just as growth was slowing domestically? Because, I'd...
4/8
argue, it relied on the same process that drove domestic growth before 1990 and caused the collapse of growth thereafter. Where others see a strategy, in other words, I see more of an institutional inability to evolve quickly enough.
argue, it relied on the same process that drove domestic growth before 1990 and caused the collapse of growth thereafter. Where others see a strategy, in other words, I see more of an institutional inability to evolve quickly enough.
5/8
The subsidize-investment-and-they-will-come strategy that was so successful when investment levels were low and there were huge productivity gains available is now a mechanism that locks in losses on non-productive investment in the form of debt on its balance sheet.
The subsidize-investment-and-they-will-come strategy that was so successful when investment levels were low and there were huge productivity gains available is now a mechanism that locks in losses on non-productive investment in the form of debt on its balance sheet.
6/8
Beijing has promised for well over a decade to change, but or political reasons it is not willing to accept the costs (including a sharp slowdown in economic activity and reported GDP growth and a substantial domestic wealth transfer), and so it has been unable to change.
Beijing has promised for well over a decade to change, but or political reasons it is not willing to accept the costs (including a sharp slowdown in economic activity and reported GDP growth and a substantial domestic wealth transfer), and so it has been unable to change.
7/8
What many analysts don't understand is how GDP in China (not wholly unlike in Japan in the 1980s) is officially boosted by capitalizing losses on the balance sheet, and this means that ultimately this "strategy" is only sustainable as long as Beijing is...
What many analysts don't understand is how GDP in China (not wholly unlike in Japan in the 1980s) is officially boosted by capitalizing losses on the balance sheet, and this means that ultimately this "strategy" is only sustainable as long as Beijing is...
8/8
both able and willing to allow its debt burden to continue rising. Until then, European industry will just have to try to protect itself from potential disruption.
both able and willing to allow its debt burden to continue rising. Until then, European industry will just have to try to protect itself from potential disruption.
