Hacker News Reader

Comment by thisisit | Hacker News Reader

> The buyout was an attempt to “comply with our country’s laws and rules and further improve the security and the service quality of the AWS cloud-computing service operated by the company,” Beijing Sinnet said.

This was long time coming:

https://www.nytimes.com/2017/08/01/business/amazon-china-int...

Though I wonder how are the acquiring companies funded? And if China can continue doing this long term.

View on HN

Why couldn’t they? No/little international pressure to do otherwise and a currency printing press to subsidize back room deals.

This is a great strategy for China and it’s utterly insane that we allow this situation to continue.

> it’s utterly insane that we allow this situation to continue.

That is the point I am trying to make. How long before everyone says this is insane and tries to start blocking deals?

Though China's inflation due to currency printing press might come home to roost before that happens.

If giving money for business development ever created inflation, the US would not have enough machines to cut the zeros from its currency. Please understand that creating money for productive purposes cannot generate inflation, this is essentially what banks have been doing since they were ever invented.

Adding money to the supply of money causes inflation regardless of the "productive purpose" for which it is used.

Banks add money to the money supply daily. Money that didn't exist before a loan is approved suddenly appears out of thin air, due to the fractional reserve system. Billions of dollars in loans are created every single day in this way, and even before they are paid, more is created. Where is the inflation? Instead, we live in a deflationary world. Countries, through their development banks do exactly the same. No inflation is created because of this, stop believing in what has been proven untrue.

Not necessarily disputing your point, but part of the reason that there's deflation (or at least lack of inflation) is because banks _aren't_ investing in production capacity. Corporate debt is at an all time high, yes, but AFAIU mostly because corporations are swapping current earnings for debt because in the current environment it's [presumably] marginally more efficient.

Capital investments largely are coming from equity markets, VC firms, etc. There's so much free cash floating around globally that there's little need to leverage fractional reserve banking. That's why banks so vociferously oppose margin controls--they're having to compete with all the cheap money.

It's dumb greed. China dangles the prospect of a 1 billion+ consumer market in front of Western companies, and rational thinking ceases. The upside looks infinite.

I bet that Taiwanese, Japanese, and Singaporean corporations filter and structure their deals differently given that they have much deeper and historic ties to China, and are more familiar with long-term planning in the context of centralized political economies. Perhaps someone could confirm or dispute that.

Reply on news.ycombinator.com