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Comment by DiogenesKynikos | Hacker News Reader

Many of the claims you're making here are outdated, or just outright false.

For example, the 51% requirement does not apply in most industries any more. It was a transitional measure as China opened up its economy to foreign investment, to prevent foreign companies from instantly taking over or outcompeting every Chinese company. But that measure has been rolled back over the years, and now only applies in particular industries. Tesla 100% owns its operations in China, as do more and more foreign companies.

Many people in the US and Europe are operating with a mental picture of China that is decades out of date, or which is even just wrong.

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>But that measure has been rolled back over the years, and now only applies in particular industries.

I would like to know where you saw this. Not to be a jerk but I've never heard this and I'm more informed than most.

>Tesla 100% owns its operations in China, as do more and more foreign companies.

Tesla is the first one to have that arrangement. https://en.wikipedia.org/wiki/Gigafactory_Shanghai What about this? https://asia.nikkei.com/Spotlight/Supply-Chain/Tesla-cars-fa... Keep in mind, producing Teslas in China is not the same as selling them in China. They can mandate Tesla to export 100% of the cars at any time if they feel it threatens the local industry.

>Many people in the US and Europe are operating with a mental picture of China that is decades out of date, or which is even just wrong.

Many people are also operating with an overly optimistic and romanticized picture of China that was never true to begin with.

> I would like to know where you saw this. Not to be a jerk but I've never heard this and I'm more informed than most.

You just mentioned an example yourself: automobiles. This isn't specialized knowledge. You can read about China's JV policy, and how the list of affected industries has shrunk over time.

> They can mandate Tesla to export 100% of the cars at any time if they feel it threatens the local industry.

Anyone could theoretically do anything in the future. They haven't. In fact, they've been extremely welcoming to Tesla.

>You can read about China's JV policy, and how the list of affected industries has shrunk over time.

Yes but I don't read Chinese. Like I said I have read about this stuff and never found another example besides Tesla. You said something about "particular industries" which implies there must be far more examples of exceptions to the JV rule. I haven't been able to find them. I thought you might have a good source since you're the one claiming that there are more exceptions.

>Anyone could theoretically do anything in the future. They haven't. In fact, they've been extremely welcoming to Tesla.

They have a history of welcoming outside companies until they get a domestic equivalent. For example this has happened to tech companies.

The key term here is the "negative list," which defines which sectors have restrictions on foreign investment.[0] The negative list has been shrinking over time.

I don't know the details of each company, but I think many major US corporations, including Apple, Walmart and Nike, have wholly owned subsidiaries in China.

> They have a history of welcoming outside companies until they get a domestic equivalent.

I don't know if any example of this, though I know this is something Noah Smith always claims (and I have a dim view on his knowledge of China). The closest thing to this is what happened to Google and Facebook, but they were really just blocked because the government wanted them to censor information, and they apparently weren't playing ball. But in terms of the Chinese government chasing a foreign company out just because there's a Chinese equivalent, I've never actually heard of a specific example.

0. https://en.wikipedia.org/wiki/Negative_list_of_foreign_inves...

The relaxation of the limit was announced in mid-2019 after Trump's trade war started.

https://fundselectorasia.com/china-officially-ends-foreign-o...

There have been successive relaxations of the restrictions over the years, going back more than 30 years.

China's economy used to be completely closed to foreign investment. They didn't open up overnight. It's been a long, gradual process. The JV requirements were meant to prevent foreign firms from instantly wiping out every Chinese company in every sector. But as the Chinese economy becomes more advanced and competitive, the government worries less and less about foreign companies swooping in and taking everything over.

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