Protection of Foreign Investment in China: The Foreign Investment Law and the Changing Landscape - "For a long time after the adoption of the Sino-Foreign Equity Joint Venture Law in 1979, the first national legislation relating to foreign investment, China maintained a distinct legal system for foreign investors, subjecting domestic and foreign invested enterprises (FIEs) to different laws with different requirements for their establishment and operation... Discussing foreign investment in particular, President Xi Jinping stated in 2017 that China should ‘create a stable, fair, transparent and predictable business environment, and speed up bids to build an open economy in a bid to promote the sustainable and healthy development of the Chinese economy’, adding that China should create a new basic law governing foreign investment and that rules that contradict the principles of opening up should be abolished."
A China shill claimed that Chinese discrimination against foreign companies since 1979 is justified because Huawei and TikTok were unfairly treated in the 2010s and the 2020s.
China Joint Ventures: Everything You Should Know - "China bars many foreign companies from participating in the Chinese market. As a result, companies need to enter the market through other means, such as setting up a wholly foreign-owned enterprise (WFOE) or forming a joint venture with a Chinese business partner... The Chinese joint venture system was set up to make commercially reasonable buyouts impossible. The goal of the Chinese government was and is to force foreign companies to keep their investments in China, and the government established its JV rules and regulations to accomplish this purpose."
It's hilarious when China shills complain that Chinese companies are unfairly treated
How to Kill Chinese Dynamism by Yasheng Huang - Project Syndicate - "In Lonely Ideas: Can Russia Compete?, MIT historian of science Loren Graham shows that many technologies pioneered by Soviet and post-Soviet Russia – including various weapons, improved railroads, and lasers – nonetheless failed to benefit the national economy in any substantial way. The reason for this abysmal failure, he concludes, is Russia’s lack of entrepreneurship. The same insight can be applied to Imperial China. Many ideas that originated there were lonely orphans and brought little to no benefit to the Chinese economy. By contrast, the China of the post-1978 reform era moved in an altogether different direction from both Russia and China’s own past... Imperial China was inventive, but it was not innovative. As the late economist William Baumol showed, this distinction is crucial. Inventions alone do not contribute to economic growth. Rather, growth is powered by innovation – the entrepreneurship and business-development activities that take inventions to the market through commercialization. Capitalism is an innovation machine because it provides the mechanisms needed to turn inventions into economy-boosting innovations... In their best-selling 2009 book, Start-up Nation: The Story of Israel’s Economic Miracle, journalists Dan Senor and Saul Singer show how a culture of informality, risk-free inquiries, and organizational egalitarianism – all supported by government policies and programs – helped make Israel a global entrepreneurial success story. The authors offer vivid details of subordinates pushing back against their superiors, even in the military – an institution that is synonymous with hierarchy. China, by contrast, is top-down, hierarchical, and repressive, stifling individual initiative. It seems to lack Israel’s culture of democracy, rule of law, and protection of property rights. Chinese laws place no meaningful constraints on Chinese leaders, and Chinese finance is dominated by the statist banking system. While venture capital grew exponentially in the first two decades of the twenty-first century, big tech companies such as Alibaba, Huawei, and Lenovo were not funded by Chinese VC in their startup phase. China, thus, represents the polar opposite of Israel. Yet it, too, became a startup nation. Chinese entrepreneurship has flourished even without rule of law and market-based finance, and even though autocracy is widely assumed to be antithetical to innovation. What explains this outcome? Among commentators and scholars, there is a deeply rooted view that China has discovered and crafted “a third way” to foster dynamic innovation: a development model that harnesses the efficiency of the market economy and the power of the state without having to rely on the institutional prerequisites of capitalism, such as rule of law and market finance. I disagree. In my new book, The Rise and Fall of the EAST: How Exams, Autocracy, Stability, and Technology Brought China Success, and Why They Might Lead to Its Decline, I show that Hong Kong, at least until very recently, functioned as a hidden-in-plain-sight source of rule of law and market finance for many high-tech entrepreneurs in China... China’s success has less to do with creating efficient institutions than with providing access to efficient institutions elsewhere... That is why it has been so common among Chinese high-tech firms to register their assets outside mainland China’s legal system. Within the BAT trio of internet giants (Baidu, Alibaba, Tencent), only Tencent is registered in China (in Shenzhen). (Incidentally, Tencent was backed early on by Naspers, a media company in South Africa.)... there are nine Chinese firms among the world’s 20 biggest tech companies, and only three of them are fully domiciled domestically: Tencent, Xiaomi, and Ant Group (whose parent firm is foreign-registered)... Sadly, many commentators, and Chinese policymakers themselves, do not seem to grasp this point. In her new book, Keyu Jin of the London School of Economics argues that China’s unique development model – “beyond socialism and capitalism” – enabled its miracle growth without a need for Western contrivances such as the rule of law and market finance. She mistook the genuine enlightenment during the reform era that allowed Chinese entrepreneurs to circumvent a statist system for the virtues of that system. Remarkably, her book comes at a time of massive capital flight from China, much of it driven by Chinese entrepreneurs who fear for the security of their persons and property. The incongruity is jarring... Imagine arguing that the US Constitution is useless because it has zero GDP... Now that the 2020 National Security Law of Hong Kong has eviscerated the “one country, two systems” formula that provided a semblance of legal protection to Chinese entrepreneurs, they could be in for a rude awakening. Hong Kong has been dragged away from the rule of law toward China’s “rule by law” – and this at a time of geopolitical tensions, deglobalization, and increasing economic insularity. New safe harbors have emerged, such as Singapore, but this time they are hosting economic refugees from China rather than performing the institutional functions that previously powered China’s high-tech entrepreneurship. Soon, China will feel the effects of no longer being able to outsource the rule of law and the other basic ingredients of innovation-driven growth, and it will pay a steep price for getting basic economics so egregiously wrong."
China asks consulates in Hong Kong to give details on local staff - "China's foreign ministry in Hong Kong said it has asked consulates in the financial hub to provide job titles, home addresses and identification details of all locally employed staff"
Naturally, China is lying, since the Convention only requires the "The full name, category and class of all consular officers" to be sent, and this doesn't apply to all local staff. But of course this is justified because the French and British looted the summer palace in 1860 and the fact that the Western diplomats got captured and killed is irrelevant
Michael Fritzell (Asian Century Stocks) on X - "Spoke to a couple from Shanghai last night. Locals are getting seriously worried. English classes replaced with Xi Jinping Thought. People reporting others if they use English words or voice anything radical. No more stand-up comedy. Perhaps this cycle truly is different."
Drew Pavlou 柏乐志 🇦🇺🇺🇦🇹🇼 on X - "An Australian MP from the government party is attacking me as a racist for holding a sign reading “Fuck Xi Jinping” It is truly insane to believe insults against Xi Jinping constitute hate speech Why must we all wear kid gloves when it comes to the genocidal dictator of China"
Sydney activist sparks outrage over ‘F*ck Xi Jinping’ sign in Asian market - "“No way I would have been surrounded by 50 people and physically assaulted if I held up a sign saying ‘F*ck Scott Morrison’ in Sydney. Why should Chinese ultranationalists get a free pass to assault people in Australia if someone insults Xi Jinping?”... The NSW Council of Civil Liberties (NSWCCL), one of Australia’s leading human rights organizations, said using the swear word “f*ck” in a political statement is not considered offensive. “The police should certainly tell you what you've been charged with. We don't think it's offensive to use the word f*ck in a political statement”"
Xi Jinping builds a 21st-century police state - "A revised version of China’s Public Security Administration Punishments Law was recently opened to public comment on the website of the National People’s Congress (NPC), updating a law enacted 17 years ago. It grants police many new powers. Some are provoking an unusually vocal backlash. Article 34, for instance, creates a set of administrative-level political misdemeanours. It empowers police to fine or detain people for up to 15 days for words and deeds that “harm the spirit” or “hurt the feelings” of the Chinese people. The article is inspired by laws passed in recent years that created political-thought crimes punishable in court. To widespread public alarm, this proposed administrative-level law allows rank-and-file police to sanction not just unpatriotic acts, but also articles of clothing or symbols that they deem offensive to the public, as well as insults to party-approved heroes and martyrs. Should those being punished answer back, they may regret it. Whereas the existing law punishes people whose actions obstruct police work, the draft version creates an offence of merely insulting or verbally abusing the police in the course of their duties. Its Article 120 allows some cases, involving “irrefutable evidence”, to be decided by a single officer... By adding language about clothing that hurts the public’s feelings, authorities are reopening recent rows about sartorial censorship. In effect, the new clause offers retroactive backing to police who temporarily detained a young woman last year for taking selfies while wearing a Japanese kimono in the eastern city of Suzhou... if a police state worries some Chinese, their main concern is the police. An article by Shen Kui, a law professor at Peking University, voices concerns that the draft’s vague language makes “arbitrary” law-enforcement more likely. In a commentary later deleted from the Paper, an online publication in Shanghai, Zhao Hong of the China University of Political Science and Law worries that officers may be allowed to decide whether they have been abused while on duty, based on their personal feelings. In that case, he writes, the law may sanction citizens who merely direct heated complaints or “harmless ridicule” at the police. Other scholars note, gloomily, that the draft law allows police to collect biological samples, such as hair or blood, from those charged with even trivial misdemeanours. A court warrant is not needed... To a pessimist, a less corrupt, more professional justice system offers no real shield against tyranny. China’s courts and police are explicitly under the party’s authority, and judicial independence is denounced as a dangerous Western notion. Vaguely-worded laws allow officials to define wrongdoing as they see fit."
China's Xi Jinping Spooks Global Investors, Governments With Recent Firings - Bloomberg - "After President Xi Jinping tore up the Communist Party rulebook to promote key loyalists last year, some observers expected his new team to operate more smoothly in tackling China’s biggest challenges. Instead, his government looks like it’s in disarray. Xi’s mysterious purge of his foreign minister in July, followed by the reported ouster of his defense chief less than two months later, is making China appear unstable to the outside world. The Chinese leader also overhauled the generals overseeing China’s Rocket Force, which manages the nation’s nuclear arsenal, without giving an explanation. And those are just the firings that have been made public. While most analysts don’t see any threat to Xi, who has amassed more power than any leader since Mao Zedong, questions are being raised about his management style. Morale within the Foreign Ministry in particular is very low, with anxiety running high among a group of bureaucrats that see themselves as professional diplomats who don’t want to get caught up in political power plays... China hasn’t seen such an intense period of high-profile purges since the reform era of the 1980s, exposing the “opacity and brutality” of Xi’s system, according to Richard McGregor, a senior fellow at the Lowy Institute in Sydney who wrote The Party: The Secret World of China’s Communist Rulers. “These men were handpicked by Xi himself for promotion,” McGregor said. “So their fall reflects on him.” The upheaval is leaving investors and governments spooked, as outsiders try to piece together Xi’s motives from a slim trail of clues. It’s also undercutting Beijing’s efforts to convince the private sector it’s safe to invest in China, after years of bruising crackdowns on sectors including tech and education. Health-care tycoons have lost some $17 billion in Xi’s latest sweeping anti-graft campaign... “Investors are worried palace politics are keeping Xi away from addressing China’s pressing economic problems.” Western firms in China are now the gloomiest they’ve been about the future in decades, largely due to geopolitical risks, according to a recent American Chamber of Commerce in Shanghai survey. Persistent tensions with the West — coupled with China’s economic slowdown — have sparked a $188 billion exodus from Chinese stocks and bonds from a December-2021 peak through the end of June this year, diminishing the market’s clout in global portfolios. “Investor confidence requires systemic stability,” said Brock Silvers, Hong Kong-based chief investment officer at private equity firm Kaiyuan Capital. “Sudden, unexplained personnel or policy changes only exacerbate growing market concern.” Xi’s shift in behavior isn’t limited to his newfound hire-and-fire governing style: He’s also increasingly focused on security and is staying home much more than previously. Xi has left China for only six days this year even after the nation opened up after the pandemic, and skipped the Group of 20 summit this month for the first time since he took power in 2012. When he attended a leaders’ summit in South Africa last month, he didn’t show up for a scheduled speech, getting his commerce minister to read his words instead. Chinese-language media reported that Xi made the address. At that event, Xi’s security team swept his South African hotel so thoroughly it even took local police by surprise. The Chinese flew in their own beds, curtains and carpets on a cargo plane, South African Police Minister Bheki Cele told local media. “There was nothing from South Africa in those rooms,” he added... As Xi’s mistrust of his officials grows, the system is showing signs of becoming paralyzed as he tries to micromanage domestic operations. One foreign executive in Beijing, who asked not to be identified, said Chinese officials now operate in “silos of fear,” with everyone scared of Xi and also isolated from each other... “It shows a deficiency in the vetting process,” Neil Thomas, a fellow for Chinese politics at the Asia Society Policy Institute’s Center for China Analysis, told Bloomberg TV, adding that Xi appears to have skipped the stringent checks and factional haggling that accompanied Communist Party promotions in previous decades"
Resisting China’s cultural infiltration - "The Northeast Project was a study conducted by the Chinese Academy of Social Sciences and the three provinces of Northeast China from 2002 to 2007. It researched the role that the ancient Korean Peninsula — including Gojoseon, Goguryeo and Bohai, known as Balhae in Korean — played in Chinese history, and aimed to strengthen how China’s Korean ethnic group identified with its Chinese ethnic group. The project’s consolidation of Chinese nationalism and academic research irritated South Koreans, and they fear a new rendition of the project. Disputes with China over the origins of kimchi and hanbok (traditional Korean dress) have reminded them of the Northeast Project’s invasiveness and distortions, but with a cultural twist... the National Security Bureau revealed that the Chinese Communist Party (CCP) had been training nearly 1,000 Taiwanese Internet celebrities and YouTubers in preparation for a cognitive warfare against young Taiwanese. Normal cultural exchanges are unlikely to be so dangerous, but China can turn everything into a tool for its “united front” work. Taiwanese would be naive to think that “culture is culture, politics is politics.” In addition to suppressing Taiwanese art and entertainment, the true seriousness of cultural warfare lies in the effects it has on Taiwanese’s cultural identity."
How China and the CCP aggressively push beyond their borders - "Four people approached, separately, and hovered nearby, uncomfortably close. Men and women. They were conspicuous... “How are you?” John asked one woman in Mandarin. She said nothing and abruptly left. But, oddly, she returned 10 minutes later wearing a different-coloured shirt. The group persisted even after John and Tara got up to leave, until Tara started to film them with her phone camera. One man was walking directly towards her until she produced the phone, at which point he immediately started walking sideways, crab-style, to avoid having his face recorded. It wasn’t the only act of harassment against Garnaut and his family, but it was a notably overt one. The message was plain: you have displeased the Chinese government and we are going to punish you. We can always find you, we know where you live, we can act with impunity in the middle of Australia’s biggest cities. We don’t care that you worked for a prime minister. We are not afraid of Australia’s authorities. It was January 24, 2019. The foreign influence laws had taken effect six weeks earlier. Their conduct didn’t mark them as professionals. But whoever tipped them off to Garnaut’s whereabouts probably was... As Tara recounted some of her experiences, one of the police officers leaned forward and interrupted: “Do you realise the people behind you are filming us?” The stalkers had helpfully provided first-hand evidence to the police. An investigation into potential criminal stalking was under way at the time of writing. The never-ending pursuit of power, the relentlessly expanding influence and paranoid nature of the Chinese Communist Party means that it will continue to press outwards unless and until it meets resistance. At home and abroad, it imposes one control after another until it is satisfied that it has total control. It is an ideology of authoritarianism animated by a psychology of totalitarianism... What does the Chinese Communist Party want from Australia?... “Espionage and foreign interference is insidious. Its effects might not present for decades and by that time, it’s too late. You wake up one day and find decisions made in our country that are not in the interests of our country. Not only in politics but also in the community or in business. It takes over, basically, pulling the strings from offshore.” Note that, although Lewis was a longtime soldier, traditional military invasion does not feature in his answer. This is the modern way of intelligent statecraft, conquest and control without war. Another expert comes to the same conclusion from a very different lifetime of experience. Anson Chan, the former chief secretary of Hong Kong, occupied a position of trust unique in history. She was the last head of the Hong Kong civil service under the British and the first under the Chinese. She served four years under each, evidence that both powers trusted her impartiality and professionalism. The career civil servant is now 79. “I don’t think Australians understand the sort of country they’re dealing with. Look at the way they are infiltrating, even in Australia,” she said during a visit to Melbourne in 2016. “Australia is a very open society, so it wouldn’t occur to most people the designs of the one-party state. And it wouldn’t have occurred to the people of Hong Kong until we experienced it first-hand. No one should be under any illusions about the objective of the Communist Party leadership: it’s long-term, systematic infiltration of social organisations, media and government. By the time China’s infiltration of Australia is readily apparent, it will be too late.” Chan stepped out of retirement to support the campaign to keep Hong Kong’s autonomy, as promised by Beijing under the Basic Law, which serves as Hong Kong’s de facto constitution. As a result, once trusted by Beijing to administer Hong Kong, she is now denounced in Party media as “an important pawn for anti-China forces in the West to meddle in Hong Kong affairs”... To the outsider, it appears that today’s China is so mighty that it must have outgrown such timorousness. Yet the psychology and the policies of an impoverished and uncertain new republic of 70 years ago remain operative today... China’s President, Xi Jinping, has told his party that it must brace for a long ideological struggle. Early in his tenure he gave an internal party speech, not released until six years later, in which he said that “the eventual demise of capitalism and the ultimate victory of socialism must be a long historical process”. Regardless of how China seems to us – and it’s hard to think of today’s China as communist or even socialist in its economic principles – this is how it sees itself. Xi portrayed China as the challenger striving to defeat a stronger, more established West... Prime Minister Scott Morrison, in a desperate effort to protect his new MP, accused the opposition of racism. This is a favoured tactic of Beijing. Any scrutiny of Chinese activity is “racist”. Morrison should have resisted the urge to do Beijing’s work for it. Australia’s former race discrimination commissioner, Tim Soutphommasane, didn’t think it was racist to scrutinise Gladys Liu. “Questioning by Labor and the crossbench members of Parliament on this is legitimate and reasonable”... “The majority of Chinese-Australians have been wavering politically. They want to carry on their normal lives in Australia, but in the meantime they are very, very nationalistic. They are Australian citizens but they have never shown that to the Australian public. But hundreds of thousands of them will come out to wave the red flag to welcome Chinese government visitors.”... Many of the richest Chinese, who can command every luxury and privilege at home, nonetheless prefer to live in Australia. We are the number one choice for rich Chinese looking to migrate, ahead of the US, Canada and Switzerland. This is a more telling indicator than any amount of nationalist chest-puffing and official propaganda."
'China is a paper tiger,' says Kyle Bass, Hayman Capital Management - "The manner in which the Communist Party sets up the architecture of its financial system is very clever. I don't know if you know this but 95% of the chief economists in Asia are Communist Party members. When you have a Goldman Sachs partnership in China, they require joint venture partnerships. Nothing can be printed without someone in the Communist Party approving it being printed. I know this because I know senior people at these firms and talk to them, sometimes on a daily basis. They'll tell me their thoughts and I'll say, ‘Well, why don't you print that?’ They’ll say ‘Oh, that would never get through editing or we would never get that through our chief economist — but this is really what’s going on’. The Chinese state is able to control the data flow and the narrative in the financial sphere through Western firms, because Western firms agree to this architecture. It's important to note how you debunk a Chinese number: it's really easy. China says for example their exports grew 8% in a quarter, yet you look at their top 10 exporting importers that are buying exports from China. Let's say all of them had a quarter that was down 4.6%, then China's plus eight is probably not the number — it's probably minus 4% or minus 5%. It's our job to figure out what the truth is. And it's not by listening to their reporting... Global economists that are all on China's payroll one way or the other say that they're the second largest economy at 15% of global GDP. But that is taking their renminbi-based economy and converting it back at a closed capital account exchange rate for the dollar. But if they opened their capital account, the renminbi would drop 40%-50%, and its economy would be just the third or the fourth largest economy in the world. The West gives China this status as the world's behemoth and that not dealing with China will have such negative consequences for the US and the developed West. If you're 15% of global GDP and yet only slightly over 1% of global transactions settle in your currency, the West holds all the cards and believe me when I say that Western governments have just figured this out."
Remembering Tiananmen Square 30 Years Later Is Dangerous - The Atlantic (2019) - "These items are more than just symbols of one of the most turbulent periods in China’s recent history—they are evidence that something Beijing says didn’t happen did, in fact, occur. China censors all mentions of the Tiananmen Square protests, and subsequent crackdown, domestically. The iconic photo of the anonymous “tank man” staring down a line of armored vehicles as they left the square the following day is impossible to find, and even veiled references to the massacre, such as the term May 35, are omitted from the press, public discourse, and online communication. Parents who lost their sons and daughters in 1989 can expect to be jailed for bringing it up. Yet here in Hong Kong, which since its handover from the United Kingdom in 1997 has operated autonomously with its own laws and basic rights, such as freedom of speech and assembly, annual commemorations are held to mark the demonstrations. This city is the only place on Chinese soil where the June 4 Museum can exist. Not everyone here wants it to exist, though. Civil liberties have gradually been curtailed in Hong Kong, and the museum has not been spared, facing sustained harassment and suppression, a response reminiscent of the 1989 crackdown. This should come as no surprise. When a government’s worst behaviors officially never happened, the state has little reason not to behave in such a way again."
Hong Kong police raid Tiananmen massacre museum | Tiananmen Square protests 1989 - (2021) "Hong Kong authorities have raided the city’s Tiananmen massacre museum a day after arresting four members of the civil society group that ran it."
When the Lion Wakes: The Global Threat of the Chinese Communist Party - "Chinese citizens have been indoctrinated for decades with the idea that Party is country. The idea was introduced by paramount leader Deng Xiaoping soon after the Tiananmen Square Massacre of 1989. He realised that as long as the state and the people were seen as separate entities, then the door would remain open for recognition of the Party’s many historical crimes—and also for recognition of the ongoing subjugation of the people by the Party. He wanted to make sure that citizens would never again rise up as they did in 1989. As China-watcher Clive Hamilton explains: “For many new Chinese arrivals in the West, one of the hardest concepts to understand is the distinction, essential to democracies, between the nation and its government. When they do grasp the difference, they are open to becoming critics of the party-state without feeling they are betraying their homeland.”... Today, the Communist Party stifles criticism and dictates policy far beyond Chinese borders, controlling NGOs and businesses, silencing dissidents, and filling Western university boards with CCP sympathisers. Academic institutions are increasingly reliant on Chinese money—$12.55 billion in student tuition fees in 2016—and so it’s easy to buy their silence. “We don’t talk about Taiwan independence,” says Perry Link, Professor of East Asian Studies at Princeton University. “We don’t talk about the occupation of Tibet. We don’t call the June 4 Massacre ‘massacre.’” The same subjects are off-limits for British lecturers, who have been warned by staff from London’s Chinese embassy that they should never talk about “the three Ts” (Tibet, Tiananmen, and Taiwan). Those who do stray into the forbidden areas of discussion are summarily punished... The Party’s iron grip extends to society far beyond academia... This craven behaviour is making the Party confident—so confident, in fact, that it has begun arresting the citizens of other countries... They locked British businessman Peter Humphrey into an iron chair inside a steel cage and drugged him in order to elicit a confession. They hounded New Zealand academic Anne-Marie Brady, punishing her for researching the CCP’s foreign influence by sending their goons to break into her home in Christchurch, tamper with her car, burgle her office, and send her threatening letters... The Chinese authorities apparently believe that the citizens of all countries come under their jurisdiction. This is more than aggressive nationalism, this is imperialism... All manner of innocuous activity can drive down an individual’s score—even playing video games. When a declining score passes a certain threshold then travel plans and bank loans are blocked. Citizens with low social credit scores were prevented from buying airline tickets 17.5 million times in 2018... Lee Kuan Yew told Graham Allison that hundreds of Party officials came to him over the years to seek his advice, and they all shared the same nostalgia for “a world in which China was dominant and other states related to them as supplicants to a superior, as vassals came to Beijing bearing tribute.” Graham Allison knows of a Shanghai deputy mayor who says he looks forward to the day when every upper-middle class family in Shanghai has an American houseboy... Wang Dan, one of the exiled student leaders from Tiananmen Square, has found cause for hope in the recent US-China trade war. “In the 1990s,” he told the New York Times, “when Washington linked the granting of China’s most favourable trading status with human rights, the Chinese government bowed to the pressure by relaxing its political control and releasing me and several other dissidents. But once trade and human rights were delinked, the situation there deteriorated drastically.” Perhaps we could cage the lion by refusing to compromise on human rights, and by insisting on the association of political reform with trade."
From 2019
