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Lessons Learned: Why Not to Joint Venture with Chinese State Companies

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  • #61
    Originally posted by pla View Post
    Well, at least Airbus didn't learn the "lessons why not to joint venture with chinese state companies", it is expanding its joint venture in China. Airbus is increasing its current capacity of 4.5 aircraft per month to 6 aircraft per month at its China facility:





    Of course, then there is also Tesla, BASF, SIEMENS, DAIMLER, BMW, BOSCH, CONTINENTAL, VOLKSWAGEN, FORD, etc... They are all expanding their joint ventures in China. It is quite ironic that a trade war aimed at stopping joint ventures actually promoted even more joint ventures. Go figure!

    The lessons learned is that they should expand, not retreat, in China:-) Again, reality is very different from fantasy.

    Lastly, I recommend a recently published book "21 Lessons for the 21st Century" by Yuval Noah Harari. It was reviewed by Bill Gates: https://www.nytimes.com/2018/09/04/b...ah-harari.html

    Learn some real lessons.
    Large German corporations may be corrupt, but they are not stupid. They think that China-US trade war gives them an excellent opportunity to expand in China in the expense of Tesla, Ford, GM. and even GE. I think they are 100% right - China will welcome them with open arms. On the other hand, China is also expanding their business in Germany. For example, they are building a new battery factory in Thuringia:

    https://www.reuters.com/article/us-b...-idUSKBN1JZ11Y

    Some background info:

    https://www.theverge.com/2018/8/15/1...-battery-cells

    Comment


    • #62
      Originally posted by Jumper View Post

      You don't talk about the nations we talk about, It's about China's behavior. How to exploit open economies while controling everything within homeland China.
      Why defending the Chineese behavior, isn't that clear what's happening?

      Wait a second.....Don't tell me that you actually believe that only China exploits "open economies". Oh boy.......where do I even start.....

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      • #63
        Originally posted by MRAPer View Post

        In the so-called Western democratic states, the states are effectively controlled by large and corrupt corporations, which are in turn abetted by corrupt financial institutions - so much for open and free economy. In China, large corporations are reined in by the state. Also in China, the ruling committee member is replaced every 5 years if he or she (so far only he) does not perform well. On the other hand, both local and central governments in China rely heavily on surveys of public opinions to amend existing policies and enact new ones. In my opinion, this is a much more accurate, rapid, and cost-effective way for policy-making, which renders election a redundant and wasteful process under most circumstances.,
        Who determines the performance of leadership and how? The benefit of indirect democracy versus alternative systems of government is its inherent stability - by throwing this "bone" called elections to the third estate, the third estate does not feel ignored or oppressed and is less likely to resort to violence if aggrieved.

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        • #64
          MRAP and pla you guys working for China’s Economic Council and/or Ministry of Truth?

          Ni Hao gentlemen! Long live the party. 中国强鸡馄饨汤

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          • #65
            On a serious note, nationalism seems to be getting "worse" here.

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            • #66
              Originally posted by ak16 View Post

              Who determines the performance of leadership and how? The benefit of indirect democracy versus alternative systems of government is its inherent stability - by throwing this "bone" called elections to the third estate, the third estate does not feel ignored or oppressed and is less likely to resort to violence if aggrieved.
              The simple answer is "peers." It is just like how a hospital would evaluate its doctors in the West, or how reviewers or peers evaluate scientific papers in the West. This is not perfect because "peers", sometimes, back each other for personal gains. Well, just like in Western democracy, there is always this gap between reality and ideals. But it seems to be working fine for China. Most importantly, Chinese DO NOT think its system is perfect, and is constantly looking for ways to reform it. Whereas the West seems to think that they have found the only way, and it is unchangeable. There are several books on Chinese political meritocracy.

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              • #67
                Originally posted by pla View Post

                The simple answer is "peers." It is just like how a hospital would evaluate its doctors in the West, or how reviewers or peers evaluate scientific papers in the West. This is not perfect because "peers", sometimes, back each other for personal gains. Well, just like in Western democracy, there is always this gap between reality and ideals. But it seems to be working fine for China. Most importantly, Chinese [B]DO NOT think its system is perfect[/B], and is constantly looking for ways to reform it. Whereas the West seems to think that they have found the only way, and it is unchangeable. There are several books on Chinese political meritocracy.
                I am not sure that a political system based on "peers" is superior or can be accurately compared to peer-review in scientific journals. For once, even in peer-reviewed journals there is a lot of backroom "politics" and "bickering" b/w those subscribing to different theories. In fact, authors who submit a paper for peer review typically have the choice to nominate which reviewer and editor they would like to avoid (I have been lucky enough to never encounter an antagonistic reviewer, but have heard some truly horrific stories about this process from those much less fortunate). Not exactly a flawless, unbiased, or incorruptible system. Secondly, political decisions taken by the leadership affect (directly or indirectly) every citizen of a country, whereas the squabbles b/w scientists about merits of one interpretation over another generally impacts only their own prestige and a limited circle of experts.

                I am not saying that indirect democracy is perfect - there is simply not enough accountability for my liking, such a system tends to slide into primitive populism all too often and a myriad of other issues. However, I believe the whole "Politburo" approach is not the answer either as it lacks a certain degree of legitimacy from the public.

                This is a topic I am ill-informed about, but which reforms have been passed in China (say, over the last decade or two) in order to optimize the current political system?

                No one in the West with any real sense or understanding truly believes that. Certainly, "democracy" may be regularly invoked as a form of propaganda to push a certain agenda in many countries (Google "threat to democracy" for a laugh), but I am sure that China has its own preferred propaganda methods. Also, I can't judge by other countries, but in Australia there have been some very recent and significant reforms of the election process (https://www.aph.gov.au/About_Parliam...teVotingSystem).



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                • #68
                  Originally posted by ak16 View Post

                  I am not sure that a political system based on "peers" is superior or can be accurately compared to peer-review in scientific journals. For once, even in peer-reviewed journals there is a lot of backroom "politics" and "bickering" b/w those subscribing to different theories. In fact, authors who submit a paper for peer review typically have the choice to nominate which reviewer and editor they would like to avoid (I have been lucky enough to never encounter an antagonistic reviewer, but have heard some truly horrific stories about this process from those much less fortunate). Not exactly a flawless, unbiased, or incorruptible system. Secondly, political decisions taken by the leadership affect (directly or indirectly) every citizen of a country, whereas the squabbles b/w scientists about merits of one interpretation over another generally impacts only their own prestige and a limited circle of experts.

                  I am not saying that indirect democracy is perfect - there is simply not enough accountability for my liking, such a system tends to slide into primitive populism all too often and a myriad of other issues. However, I believe the whole "Politburo" approach is not the answer either as it lacks a certain degree of legitimacy from the public.

                  This is a topic I am ill-informed about, but which reforms have been passed in China (say, over the last decade or two) in order to optimize the current political system?

                  No one in the West with any real sense or understanding truly believes that. Certainly, "democracy" may be regularly invoked as a form of propaganda to push a certain agenda in many countries (Google "threat to democracy" for a laugh), but I am sure that China has its own preferred propaganda methods. Also, I can't judge by other countries, but in Australia there have been some very recent and significant reforms of the election process (https://www.aph.gov.au/About_Parliam...teVotingSystem).


                  China does not claim its system is "superior." It is simply claiming that it is a working system for China at this very moment. This system may or may not work for tomorrow's China. What you said about peer-reviewed journals is exactly what I said. I said sometimes peers would back each other for personal interests rather than for the interests of the people. I didn't say the Chinese system has very little corruptions. In fact, China is just a little bit better than India when it comes to corruption. But India is a democracy, so if it has more corruption than China, then why should China try their system? China has taken many measures to counter this. China even invited foreign experts to China to help with reforms. Some examples of these measures are the fact that many top Chinese leaders do not get all of their powers overnight. It is a gradual process. For example, President Xi did not get all of his powers when he became the Chinese president. He had about 70% of the power on day one, then after 4 years in power he finally got 100% of all the power. Imagine what if Trump can't have all the presidential power after midnight, and Obama does not lose all of his power after midnight. Similar power transfer process occurs in other Chinese government leadership positions. Another example is that Chinese politicians sometimes have to go to a different region of China to get promoted. Most Chinese governors did not come from the province they are governing. Of course, some very low level leaders are directly elected, etc...There are many other measures...

                  We can talk about all the theories all day long, but these are the facts: China was POORER than India in 1992, but now it is four to five times wealthier. China contributed to over 95% of global decline in poverty. This is good news for China, but it is bad news for the world because rest of the world is doing little to nothing for poverty. China is one of the five countries that improved the most on Global HealthCare access and quality index over the past 15 years. China hasn't been involved in any armed conflicts for almost, if not more than, 30 years. China's aggressive actions in the South China Seas resulted ZERO deaths in the past 25 years. China is generating enough power from solar and wind to power the whole Germany, etc...While India is now ranked BEHIND North Korea on global hunger index. Ranked as the most dangerous place for women. It has shut down the whole internet 76 times last year or 92 times in 2018 to prevent or stop civil unrest, while China only restricts certain websites, etc...There is simply no comparison. It is getting easier and easier for the Chinese propaganda machine. I mean the leader of West is declaring that climate change is a Chinese hoax. Does the Chinese propaganda machine even need to try?

                  Relevant sources:

                  Green energy: https://www.spglobal.com/platts/en/m...es-to-dominate
                  Poverty: http://globalpublicsquare.blogs.cnn....s-the-problem/
                  Healthcare Access and Quality Index: https://www.thelancet.com/journals/l...818-8/fulltext
                  Internet Shut Downs: https://qz.com/india/1341995/indias-...ns-of-dollars/
                  Women safety: https://www.washingtonpost.com/news/...=.171c4c0d6e85
                  Global Hunger Index: http://www.ifpri.org/topic/global-hunger-index
                  etc....
                  Last edited by pla; 08-10-2018, 04:21 PM.

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                  • #69
                    Tesla has not learned the "lessons." Tesla's joint venture in China is getting one step closer to reality as it is buying land for its factory: https://www.wsj.com/articles/tesla-a...ory-1539771044

                    SHANGHAI— Tesla Inc. TSLA -1.74% gained a foothold in the world’s biggest market for electric vehicles, completing the purchase of land for its new Shanghai plant, the company announced.

                    “Securing this site in Shanghai, Tesla’s first Gigafactory outside of the United States, is an important milestone for what will be our next advanced, sustainably developed manufacturing site,” said Robin Ren, Tesla’s vice president of world-wide sales, in a statement issued following a signing ceremony in Shanghai on Wednesday.

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                    • #70
                      Tesla has openend all their patents a long time ago.

                      https://electrek.co/2017/10/24/tesla...source-patent/

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                      • #71
                        Originally posted by picanha View Post
                        Tesla has openend all their patents a long time ago.

                        https://electrek.co/2017/10/24/tesla...source-patent/

                        VW has opened all their patents a long time ago, too? https://www.engadget.com/2018/10/21/...near-shanghai/

                        VW's grandiose electric car plans just became more tangible. The automaker has started building its first group-wide, large-scale EV production factory in Anting, about 19 miles west of Shanghai. When it's up and running in 2020, the plant will build nothing but all-electric vehicles based on the company's MEB (Modular Electric Drive Kit) platform as well as the battery systems needed to power those vehicles. The first EV to roll off the line will be a VW-badged SUV (not necessarily the I.D. Crozz).




                        The factory will meet the "highest modern standards" of automation with 1,400 robots, the company said. It also promises a minimal environmental impact with technology to reduce emissions as well as lower energy and water consumption.

                        This won't be the very first plant making electric VWs. Production will start in Zwickau, Germany, and a recently-opened plant near the southern Chinese city of Foshan. It will, however, pump out a tremendous volume of those cars -- at its peak, it'll produce 300,000 EVs per year. That could be necessary given the sheer size of the Chinese car market, but it could also create the economies of scale that would make EVs more affordable.


                        The news also hints at Shanghai becoming a hub for EV activity. Tesla just secured the land for its Shanghai Gigafactory several days ago -- that's two massive regional investments in a relatively short amount of time. Combine that with existing (albeit conventional) manufacturing in the area and it may become a hotbed for the industry, especially now that China is relaxing rules on foreign companies' EV production.




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                        • #72
                          No I think not. They just got rid of the gagging JVs. Thsi is what companies want. Do their thing and keep their thingt. In the long run China would have lost all continuing this path. Thse are the wonders of a free market. Foreign companies are always competing even in foreign markets.

                          An evolutionary business model based on fast circles, a thing state controlled businesses will never reach and therefore always lag behind.

                          It was so bad companies couldn't even choose with whom to partner. Some got good partners, unfortunate others got totally incapable partners.

                          From your article:


                          China is taking steps that could not only help ease
                          trade tensions with the US, but help electric car manufacturers around the world. The country is phasing out rules that required foreign automakers to share factories and profits with local brands if they wanted to avoid a 25 percent tariff. EV companies will no longer have to find partnerships as of this year, while all other car manufacturers will be free of the requirement by 2022.


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                          • #73
                            ABB is expanding its joint venture in China by building a new $150 million factory. https://m.economictimes.com/news/int...w/66390098.cms

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                            • #74
                              Sorry, latest foreign direct investment data do not show that anyone is staying away from joint ventures in China: https://www.scmp.com/economy/china-e...tment-weak-due

                              FDI, a sign of international confidence in the world’s second-biggest economy, rose to US$9.7 billion in October, up 7.3 per cent from a year earlier, the Ministry of Commerce said on Thursday.

                              In the first 10 months of the year, total FDI rose to US$107.6 billion, with the growth rate accelerating slightly to 6.5 per cent from the same period last year and from 6.4 per cent in the January-September period.

                              Investment from the US increased 4.1 per cent in the first 10 months, well below investment increases of 36 per cent for South Korea, 24 per cent for Japan and 176 per cent for Britain, the ministry said.
                              Even with the so-called "trade war", Americans are still increasing their investments in China.

                              Comment


                              • #75
                                Like said before a JV ist not bad per se, if the investor and know-how supplier has the upper hand on the business and ip rights no problem. Chinese companies always seek that wether in foreign buy outs or compulsory JVs. Eventually the line is crossed as to what is deemed acceptable.

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