Why Foreign Companies are Skeptical of China’s New Openness | WSJ

Why Foreign Companies are Skeptical of China’s New Openness | WSJ

(game music) – [Ksenia] China has
never been an easy game for foreign businesses to play. Companies have complained about
a tightly controlled market and what they regard as
protectionist regulations. There have also been complaints
about inadequate protection of intellectual property, or IP as well as forced transfers of know-how. – China, which is a
first world country now, has to play by the rules. We can’t allow them to
steal our technology. – [Ksenia] Though Beijing denies it forces companies to divulge secrets, this has been one of the sticking points during trade negotiations. But recently– (Xi speaks Chinese) With hopes for a partial
deal on the horizon, Beijing has been playing nice, emphasizing its message
that it’s working hard to improve its business environment. This is something foreign
companies operating in China have been eager to see, but is this really going
to change the game? Starting next year, China
pledges to put overseas companies on more equal footing with local players with a new set of regulations. In January, a new law governing
foreign investment kicks in. It promises to do more to protect overseas companies’
technology and know-how. – Foreign investment, well, it does have a positive
impact on US companies. – [Ksenia] Jake Parker is
a Senior Vice President of the US-China Business Council, a lobby group of some
200 American companies that do business in China. In October, the Council received
a draft of the guidelines on how the law will actually work. In general, they liked what they saw. Chinese officials will be banned from forcing technology transfers. The guidelines will also limit the disclosure of trade secrets from going through China’s
administrative review process. – However, at least on IP,
the draft does fall short on specifying the types of disclosures of trade secrets that will be prohibited and clarifying the types
of administrative groups within China’s government to which provisions of
technology transfer apply. – [Ksenia] At the same time, China is also rolling out regulations that will open up its financial sector. – The banks and all of the
financial services companies will be very, very happy with
what we’ve been able to get. – [Ksenia] Starting next year, foreigners should be able to freely invest in future securities and life insurance. – The trick is to wait and see if these implementations
and liberalizations lead to specific licenses
for member companies and there’s always a disconnect between an opening of a sector and a company being able to operate there. – [Ksenia] These steps won’t
only level the playing field for foreign and domestic companies but could also end up
helping China achieve its own development goals. Beijing wants to hit a
target of doubling its GDP between 2010 and 2020. That will not be an easy task
with economic growth cooling and a trade war stretching
deep into a second year. – Foreign investment
remains an important mix in China’s economic system and they would like to
ensure that foreign companies continue to invest there. – [Ksenia] While the new
investment law is welcome, analysts say these new
business regulations don’t mean a shift away from
China’s direct investment in its domestic companies or looser control of its
planned economic goals. In late October, China
set up a state backed fund for its semi-conductor industry. The war chest is around $29 billion. That’s about $9 billion
bigger than a similar fund that was raised in 2014. That’s part of an attempt by Beijing to make its key industries
more self sufficient and competitive in the long run. (Xi speaks Chinese) China’s new regulations
promise a sweeping overhaul of its older practices, and this could affect corporate titans as well as smaller businesses. – China is going to focus on
the economic reform priorities that make sense for their
own domestic economy and in many ways, those
align with some of priorities of the foreign business community. – [Ksenia] However, some
companies are waiting to see just how sincere Beijing
is about opening up. At least for now, the opening
up is win-win for Beijing. It extends a political
olive branch to the US during contentious trade talks, while potentially bringing foreign money and expertise into its economy. (upbeat music)

100 thoughts on “Why Foreign Companies are Skeptical of China’s New Openness | WSJ

  1. 0:20 China a 1st world country?? With only 8,000$ per Capita?? The US's is about 60,000$…!! What's wrong with this guy? And he's an economic adviser??

  2. China remained closed : China open the gate! otherwise you die

    You are NEVER satisfied.

  3. In short,
    Westerners want to enter China market but don't want China to get more powerful,, and want to get China into their side, like Japan.

    It's too late, the Dragon has been awaken.
    She training to breath fire now

    War is inevitable

  4. It's ironic that China needs to create a new law to protect IP.
    How does any company is expected to believe a country that's enacting a law to prevent IP theft, when it should have been the norms from the start?.

  5. They've just been thieving and undermining the west for decades. Totally start trusting the communists now that their economy is tanking and they're finally being called out for all the hacking,piracy and mass human rights abuses .
    Nothing to see here, the CCP drones and wumao paid to post say everything the west does is evil (yet CCP and most Chinese spend all their time trying to emulate westerners and the western world) and China can do no wrong. Clearly everything will be fine,you can totally trust communist despots to play by the rules..

  6. Creating a law and implementing it not enought let the us build a military base in front of beijing capital with nucklear missile if they break thier rules launch it so be it

  7. Larry Kudlow — brought into the White House to make Trump look intelligent by comparison.
    Wow! What a triumph of executive search! That was a difficult one to find…

  8. I see a lot of patriotic comments but it seems some are confused between the government(ccp) and the people of China. How do you exactly seperate the two or avoid crossing the boundary of racism or are they the same to all of you

  9. come on all the company just want the large population of market and make big buck
    one get the money, one get the tech ….fair win

  10. Do you think real capitalists will tell you the easiest time to make money?You won't hear the truth until their market stabilizes

  11. I'm not a Trump supporter, but I like what he is doing with China. They are not playing fair, and they've been cheating everybody else for a long time because everybody needed their cheap manufacturing and them taking our recyclable materials. Now that they don't have that much leverage and Trump winning the trade war they have to change some of the ridiculous, unfair policies.

  12. This is a lie because China in the past 2 years have been cracking down on foreign businesses, you see more communist propaganda in the streets, creating new protectionist rules everyday, obviously lying…

  13. Company without much budget: What? Foreign Companies are Skeptical of China's New Openness? Wow, I quit.
    Company with tons of budget: Lets tell other companies"Foreign Companies are Skeptical of China's New Openness".

  14. China is now the most over-credit country in human history. If they don't pretend they are open, to keep cash flowing, their fall will be spectacular.
    This new "openness" It's all a matter to speak the right words to fuel the desire of greed.

  15. It doesn't matter. Foreign companies never stopped investing in China or outsourcing to China even when it is blatantly unethical. Economy rules over everything else be it law or fairness.

  16. What you gonna do about it? Abandon the biggest market? Deal with it if you want the money. China playing the capitalist game better than the biggest capitalists

  17. Stay strong China and do what's good for you and stability of the world.
    China is the second largest importers in the world. Means a lots of successful business are running because of China. These people or lechers are only pressuring so they can make a quick profit and will killed the whole market in the future.

  18. 3:56 Yes you said it. It's always a win-win (only!) for Beijing. The CCP does not know how to play fair, they are complete liars and cannot be trusted. The best thing that foreign governments and companies can do is completely leave and isolate China until they are ruled by a government with at least rule of law and freedom of expression.

  19. You are angry that China used to restrict foreign companies.
    Now that China remains open, you are skeptical.
    Very annoying ,It's a real headache.

  20. China is more of a Fascist country. The government have absolute control of all things. The laws can't protect you from the government. When's the last time you see China's government get sued by the chinese people? It never happened, and NEVER will.

  21. Without the US market .. China would be stuffed.. china can’t shift into domestic consuming.. all asian know very well .. the chinese are very tight when come to spending. Also 4-2-1 china one child policy has push all the pressure of one person to look after 7 people.. apart energy and food on the table.. they have nothing left to spend. China commie regime is now printing more money to stimulate rubbish infrastructures leading to nowhere to help curb down unemployment rates.. apart from that it will increase pushing the Belt Road Initiative debt traps projects into those corrupted countries to collect foreign exchange and resources.

  22. Ofc, this makes perfect sense. Protectionist until own industry becomes strong and then slowly opening up. This is how superpowers are born (look at the history of the USA). Only China could pull this off under the immense pressure of the ”free western world”. Usually protectionist regimes dont work out due to national debt (dependence) or being closed out from the rest of the open markets, but China pulled it off. Just try to harbour all that production capability back to Europe or the US. Let’s see where this goes.

  23. Laws mean nothing in China if selectively enforced. Read their constitution, it's pretty liberal and promises all sorts of freedom, then see what happens to human rights lawyers in China… See if Hong Kong enjoys the democracy they were promised in an international treaty with the UK. Seriously, don't be so naive… Promises from China aren't worth the paper they are written on…

  24. All developed countries protect their economies. Billions and billions go to industries and agriculture every year. Of course China will do the same…

  25. One of the things that the companies complain about is stollen technology or trade secrets. The things is, you have an overseas factory produce parts or even the whole product itself and when you do that, you provide blueprints and tolences, and production processes so that the parts/product meets your standards. The thing is, what prevents said factory/company from continuing to produce said product when the agreement ends? NOTHING!! Even if the contract stipulates that the factory needs to relinquish the blueprints & etc, an engineer or manager could simply take pictures of the specifications/blueprints and continue to produce it. There's really no way of preventing that. The contractor could be done dealing business with you but you still have their production line and their blueprints, you can restart or continue the production and make profit while releasing the product under a different name. That's one of the reasons why there are a lot of counterfeit goods. Year 2017 model needs to cease but is still highly sought after, meh. Have the factory start on 2018 models. Nothing prevents you from keeping the 2017 line running!

  26. China is cracking down on foreigners living there and making it harder for foreigners to live and work there, unless China thinks that they absolutely need them.
    There seems to be a return to the Mao style of government and even many Chinese people are very worried.
    If they seem like they are being cooperative it is all a ruse. Their economy is failing and they are getting desperate. I do not trust them.

  27. China is a surveillance state on steroids. If you say something critical of the communist party you can be banned from flying, traveling, even going to school.

  28. If you have not noticed Xi Ping will be a life long president and abolishing privacy through it's citizen credit systems. Openness is not something China attempts to do.

  29. China's entire electronics assembly line, filling many of their new skyscrapers, is being automated and their government will have no choice but to level the playing field more in order to attract new industries. However, over a trillion dollars was invested in AI research last year alone, and it is already possible to replace the overwhelming majority of bureaucratic jobs and teaching jobs with computers. Thankfully, computers already conduct over 40% of all Wall Street transactions, and AI is about to take the mystery out of economics, and introduce a theory of everything.

  30. America must protect technical know how and deregulate+ innovate to become a high tech export oriented manufacturing hub. Without trade surplus , dollar will slowly erode, which will be detrimental beyond comprehension. Manufacturing export oriented jobs will provide upward mobility and build a new generation of middleclass America

  31. China will never allow anything that doesn't benefit them and they will steal everything they can. They will lie to everyone's face, promise things and go back on those promises. If they are caught, they will make token arrests, advertise their actions and then release the same people to go back to their ways of stealing and taking advantage of everyone. Xi (Winnie the Pooh) is a bald face liar, the biggest liar leading a government made up of liars.

  32. Fun fact: Qualcomm CEO said in his interview with CNBC it’s collaboration not appropriation. You gotta listen to real industry practitioners not Wall Street bankers. These are the same group of ppl distorted the world in 2008

  33. The chinese communist party needs to be destroyed, the disasterous government collecivisation and centralization of "the dictatorship of the proletariate" in any form no matter how "subtle" (lets not forget they never actually implimented marxism), is exactly the same thing as a capitalist monopoly the party was set out fight (thus becoming the very thing it set out to destroy).

    There needs to be fair ground for entrepreneurs so that things like, copying products, (stealing in essence) doesn't happen, and you know slave freaking labor.
    The way things should be is simple:
    1)There should be no taxes period, as this is highway robbery of the people. We need a barebones government that (just military judicial etc) is funded by the national bank issuing bonds and the government paying it back in referendum symbolically (although actually through their labor).

    2) social services are provided by quesi government not for profit corpate bodies that pay for themselves how? If someone becomes a burden on society (by degrees) they have to be managed (homeless/drug addicts/immigrants/poor etc), they are given bare bones living accomidations: (in a large military tent, with one cot ie locker, curten for privacy, free wifi, one tv per tent, free showers and 3 meals a day) this is payed for by them providing rudimentary labor for free 6 hours a day (box shipping/ or repeat processess on machine (such as those that make resin pellets or whatever) 5 days a week. Everything else is an incentive: extra work they get payed minimum wage, the institution provides an adress and resume classes etc… If they choose otherwise they get barebones(the incentive to want something better).

    This labor is at zero cost so it undercuts third world competition, while providing institutions of cultural indoctrination that can be sent overseas to follow said guidelines, hence cities, communites, states, groups, provences, counties, nations, billionaires etc can create real expansive colonial empires legally and in a fair way; ie: the institution is set up overseas following whatever nations government/cultural guidelines (from their home nation), building buildings in thier specific cultures way, thus bring a brand of that particular culture to a foriegn nod/colony and also proving a buffer zone for waves of immegration/migrations and also teaching them etc. At no cost, also there should multipul institutions thay compete which is alligned with the dailect struggle of nature.

    3)there should be mandaitory military/ emt/ hospital/national/peacecorp service of youths ages 18-20 utilizing thier strengths and so on.

  34. Cheating is a chinese habit. Just recently, a group of chinese athletes was banned because it was caught cheating in military games it hosted. Mainlanders have no honor and dignity mainly because of communism

  35. People are way to brainwashed by American propaganda too see past the surface that there are many many business opportunities in China that will make you wealthier much quicker than investing here in the US. Globalization is the future, don’t let the media poison your entrepreneurial spirit

  36. Companies don't care ,long as they makes money they be lineing up to get their foot in China ie, Tesla,apple, VW, Boeing list goes on 🤔🤔🤔

  37. Yet, take a look at RCEP, and the current import expo happening there. Many companies and contries are making deals there! So yeah……

  38. Question is: Can you really trust China? Uyghurs, Concentration Camps, CCP involved in Hong Kong, CCP police not arrested, Debt Diplomacy in Africa … eating DOG MEAT

  39. There are like thousands of businesses at the CIIE all over world ready to cater Chinese consumers they wouldn't be there if they have doubts would they?

  40. WSJ?? Seriously foreign companies or is it just you? Forgot 2008 when trust was in you and then what you did to world economy? Don't sling mud at those who are against your thoughts. China trying to establish its own supremacy/influence is major factor to your envy/ jealousy towards them..Ask Warren Buffett, Bill Gates and so, why aren't they sceptical about China?? By this, incorrect and misleading marketing, You guys are ensuring China doesn't attract anybody but US, thereby making China rely on US..Well that's never gonna happen..

  41. Chinese banks are insolvent. Time to open them up to stupid and very greedy western funds to put your pension money in China to prop up banks that have at least 35% nonperforming loans, usually to State Owned Enterprises. Oh, oh, too big to fail and linked to the US banking SWIFT system, time to give the goons a trillion, maybe two in real money.

  42. i from chengdu,china,im a 15 year old chinese student
    I don't want to discuss this video content, but I can see that there are obvious prejudice and self-imagining. lol
    I have been to the USA and UK, the quality of the people is low, the infrastructure is backward, and the technical facilities are also behind. The store doesn't even have a QR code.The streets are dilapidated and racially discriminatory.
    Only wages are 50% higher than China
    ,I was serious. I went to San Francisco and New York in 2016 (the basics were too bad) and went to London in 2018 (my Givenchy baseball uniform was stolen near the British Museum), the streets of London are old.
    I want to ask a question, what technology is China stealing today? Has China stolen technology that the United States does not have? lol

  43. Please be as skeptical as you want, indeed feel free to move your business elsewhere if you don’t care about the Chinese market or if you think, say India, Indonesia, or Africa are better off. Nobody is putting a gun to your head forcing you to do business in China, you vote with your feet!

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