Chicken Little cried: “The
sky is falling” in 1989 and
2002. But China survived
and became even stronger.
Companies that stayed,
survived and thrived. Can
China survive this crisis?
A work in progress
China’s central government
suffered greatly after
Tiananmen. It lost the trust
of its citizens, the thousands
of foreign companies that
invested in China and the
many world leaders who
believed that the country
was making great strides with
respect to human rights.
The country regressed as
foreign companies pulled out;
economists doubted whether
China could pull off their
experimentation with Marxiststyle
capitalism.
But China learned from
its mistakes. The leaders
admitted its past regressions,
regrouped and changed their
ways. Since then, they have
never looked back, growing
China’s GDP from US$350bn
in 1989 to over US$14trn in
just under 30 years.
Two steps forward, one step
back. China blunders again,
losing trust and goodwill
over its mismanagement of
the coronavirus crisis. At
the onset of the outbreak,
the CCP (China Communist
Party) demonstrated a lack
of transparency as it tried
to control the narrative
and reduce the seriousness
of the infection. Beijing’s
information has been
late, often politicised and
confusing.
The crisis has created
widespread uproar in China’s
social media. Calls for
Trade war effects
One positive to the Trump
trade war is that it highlighted
many of the idiosyncrasies
of doing business in China.
China’s unfair business
practices — intellectual
property (IP) theft, joint
ventures, limiting its domestic
markets to foreigners and
subsidising state enterprises —
are now front and centre. It’s
not just the US complaining.
Practically all the EU countries
have fretted about the same
issues for years. China is fi nally
listening and doing something
about it.
It was only a matter of
time before China improved
its IP laws as it evolves from
a “copy and manufacture”
economy to an “innovate and
develop” one. Trump’s tariffs
pushed China off the fence to
fi nally make some meaningful
concessions. As a result, it just
enacted the Foreign Investment
Law, which aims to do three
things: 1) ban the practice of
foreign technology transfer;
2) promise a better legal
system for foreign companies
to present their IP grievances;
and 3) put foreign companies
on an equal playing fi eld with
Chinese ones in such highly
regulated industries as fi nance,
fi lm entertainment and air,
shipping and land logistics.
Though the implementation
details have yet to be hashed
more freedom of speech,
better transparency and less
bureaucracy and formalism
fi lled China’s airwaves in
February and March.
Xi Jinping survives the
melee, but he’s cashed in
all his goodwill. He will
have a short rope if another
catastrophe occurs. All his
political enemies are either
dead or in jail, so there’s
no-one else to blame. He
has to get the country back
on track fast, return to
6% plus GDP growth and
regain the confi dence of
millions of young millennial
Chinese who blame him for
extending the outbreak to a
full-blown pandemic.
The coronavirus outbreak
has led to road, airport and
factory closures in China
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