China Economy Forum

[LeveragedBuyout]

Poignant. Then, let us hope that the Leadership have under their employ -- Western educated and experienced economists and business / financial analysts. And to take heed their recommendation(s).

I am certain that China has all the competent technocrats necessary to enact these reforms. The problem is the opacity of China's system. We discussed this issue before, perhaps in another thread, but there's a paradox to reform in China. One of China's primary advantages is the speed at which government decisions are executed, and one of the drivers of this speed is the very corruption that Xi is now stamping out.

In other words, imagine a driven and competent middle manager who sees an opportunity for his company, but is confronted by resistance when he takes his ideas to upper management. This resistance may be simple skepticism, or it may be because upper management is deriving "personal benefits" from the status quo. The middle manager may have to provide an incentive for upper management to enact his ideas, and in the end, it's win-win: the company thrives, upper management looks good, and maybe the middle manager is even promoted to upper management. That said, the process is not ideal by any means. If this greasing of the wheels is done away with, will the institution have strong enough processes to compensate, and allow talented middle managers to execute their great ideas?

That's the question. Stamping out corruption is, in a sense, the easiest part of reform. Getting everything else done after back-room deals are verboten is the challenge. We see the same outcome in the US: after earmarks were abolished, legislation essentially ground to a halt.

Let's hope China finds a way.

 

[Aepsilons]

I am certain that China has all the competent technocrats necessary to enact these reforms. The problem is the opacity of China's system. We discussed this issue before, perhaps in another thread, but there's a paradox to reform in China. One of China's primary advantages is the speed at which government decisions are executed, and one of the drivers of this speed is the very corruption that Xi is now stamping out.

In other words, imagine a driven and competent middle manager who sees an opportunity for his company, but is confronted by resistance when he takes his ideas to upper management. This resistance may be simple skepticism, or it may be because upper management is deriving "personal benefits" from the status quo. The middle manager may have to provide an incentive for upper management to enact his ideas, and in the end, it's win-win: the company thrives, upper management looks good, and maybe the middle manager is even promoted to upper management. That said, the process is not ideal by any means. If this greasing of the wheels is done away with, will the institution have strong enough processes to compensate, and allow talented middle managers to execute their great ideas?

That's the question. Stamping out corruption is, in a sense, the easiest part of reform. Getting everything else done after back-room deals are verboten is the challenge. We see the same outcome in the US: after earmarks were abolished, legislation essentially ground to a halt.

Let's hope China finds a way.

Excellently explained. Thanks also for your example(s) on some issues that arise amongst tactical and strategic management. Spoken like a true businessman.

To the topic; the issue of quid pro quo -- which is a driver in the speed of Chinese policy making -- comes to the fore. I do wonder if Xi can truly and effectively assess and change the culture of political beneficiary in China.

Whatever the case, I hope the best for them. China's progress and economy is-- dependent on this.

 

[Genesis]

I understand your fatigue on this, to be sure. But just to clarify, the WSJ is just relaying the IMF report, so your irritation should be directed at the IMF. My previous comment was meant to address two issues: 1) if China doesn't care about the IMF, why pay attention to this report? 2) If China doesn't care about the IMF, why is it setting up a competitor to the IMF?

First china really doesn't care, and neither do I. Why set up a competitor? USA already exist, why be strong ourselves? By the same logic us becoming stronger is redundant.

I think we both know the answers to these questions, since it's the same answer. It's also the reason why China is reforming. We agree that Xi isn't standing still, but the point of all of these articles is that time is running out. Xi is doing well, but he must continue to be aggressive. I don't see anything wrong with such a statement.

Xi is reforming because he loves China and wants a strong country, crazy idea I know, a commie loving his country, insteaf of looting or destroying it.

Time is never running out, maybe for a specific time frame it could, but China is 1.3 billion, we are like Pizza a bad one is still pretty good.

Finally, I consider these kinds of articles to be constructive, because they focus on the specifics. It's easy to call for "reform," but what does that mean, exactly? This article provides the details. In that spirit, I would be very happy if you were to post similar criticism of the US economy in the Americas section from a Chinese perspective, as sometimes the discussion here in the US becomes too introspective. It's good to have an outsider's opinion.

[/quote]

They first 100 maybe constructive, now it's just propaganda, since people in democracies are always so interest in what's propaganda, here it is. Repetitive slogans that sound exactly the same as the previous.

As to America, it's doing fine, you are already at your peak, now you are adding people instead of too much income, so, unless something insane happens you guys are fine. 2008 or was it 07, you guys were more or less fine.

 

[Aepsilons]

Xi is reforming because he loves China and wants a strong country, crazy idea I know, a commie loving his country, insteaf of looting or destroying it.

Even poor leaders committed poor policy based on the 'love' of one's country. Case in point Hitler, Idi Amin, Pol Pot, Porforio Diaz, Muammar Gaddafi, Francisco Franco, Hideki Tojo et al.

Time is never running out, maybe for a specific time frame it could, but China is 1.3 billion, we are like Pizza a bad one is still pretty good.

It is or it isn't. You can't have it both ways, dear.

 

[LeveragedBuyout]

Xi is reforming because he loves China and wants a strong country, crazy idea I know, a commie loving his country, insteaf of looting or destroying it.

So it appears, but as @cnleio alluded to before, we won't really know if this is true until after Xi is gone. The other alternative is that Xi is using the anti-corruption drive as a cover to maneuver his political rivals out of the picture, and clear the way for his preferred proteges. It's an exceptionally cynical way of looking at the world, but it should not be dismissed, since there are precedents for this kind of maneuver.

In any case, good luck to Xi and to China.

 

[Aepsilons]

As to America, it's doing fine, you are already at your peak, now you are adding people instead of too much income, so, unless something insane happens you guys are fine. 2008 or was it 07, you guys were more or less fine.

The United States hasn't reached its peak. I surely don't think that you have the powers of Divine Providence , and can see into the distant future of a nation.

Mr. Zhang faulted the IMF's assessment for failing to account for the impact of monetary policies in advanced nations on global financial flows—code words for saying that China's exchange rate was being buffeted by bond purchase programs by central banks in the U.S., Japan and elsewhere.

Interesting point.

 

[LeveragedBuyout]

Interesting point.

Indeed. Since the QE3 taper is set to end in October, we won't have long to wait to put his words to the test.

 

[Genesis]

Even poor leaders committed poor policy based on the 'love' of one's country. Case in point Hitler, Idi Amin, Pol Pot, Porforio Diaz, Muammar Gaddafi, Francisco Franco, Hideki Tojo et al.



It is or it isn't. You can't have it both ways, dear.

When Xi starts to invade a country 10 times its size like Tojo did, I'll let you know.

So it appears, but as @cnleio alluded to before, we won't really know if this is true until after Xi is gone. The other alternative is that Xi is using the anti-corruption drive as a cover to maneuver his political rivals out of the picture, and clear the way for his preferred proteges. It's an exceptionally cynical way of looking at the world, but it should not be dismissed, since there are precedents for this kind of maneuver.

In any case, good luck to Xi and to China.

Nothing should be dismissed, but if it's highly unlikely, it's probably not true. Much like 9/11 conspiracies.

Even if it is true, Xi lacks something a true dictator lacks, a divine right to rule, he rules because he was chosen by the people, we didn't elect him, but we tolerate him. He lacks the divine right to rule as emperors of old did.

 

[Aepsilons]

Even if it is true, Xi lacks something a true dictator lacks, a divine right to rule

That's relative. As President, he holds the mandate, and in communist China, is as close to absolute power. Akin to the autocracies of old.

 

[Genesis]

That's relative. As President, he holds the mandate, and in communist China, is as close to absolute power. Akin to the autocracies of old.

Yes, absolute power, but not absolute right to rule. An emperor is God on earth, he isn't. While deposing an emperor is an act against God, pushing his allies and even him out is just political.

Which is also one of the reasons why your emperor lives but Tojo died.

 

[Aepsilons]

Yes, absolute power, but not absolute right to rule. An emperor is God on earth, he isn't. While deposing an emperor is an act against God, pushing his allies and even him out is just political.

Your understanding of the concept of Mandate of Heaven is lacking, i must say.

In the old classical sense, the Emperor holds the Mandate of Heaven, means to say that the Emperor is considered the Son of Heaven. Heaven will show distaste to the reign of an Imperial Dynasty if there are natural calamities, and whence this happens, it is a sign of a particular ruling dynasty loosing Heaven's Mandate, and the right to rule.

Peasants will rise to revolt, and a new Dynasty will established and thus would now claim the Mandate of Heaven. An Emperor, as Son of Heaven, may lose the Emperor of Heaven's support if the Dynasty shows poor governance and sows unrighteousness. The concept of 'god' holding favor towards an Emperor is, too, rather relative.

In the case of Xi and prior Presidents, their presidential term would be considered as a definite ruling epoch. Like the Emperors of old, they hold absolute power, and have to deal with issues of corruption. And like the Emperors of old, are subject to replacement after their term is over.

Thanks.

Which is also one of the reasons why your emperor lives but Tojo died.

There is a difference between the Emperors of Japan and Emperors of China.

In China, the Emperor is man, yet favored by Heaven and named as Son of Heaven. He has the Divine Mandate. But he is not god.

In Japan, the Emperor [TENNO] is , according to Japanese Shinto Religion, a direct descendent of the Sun Goddess Amaterasu, and is Divine. Tho His Imperial Majesty the Showa Emperor declared that he is not divine, as per the post-war treaty, in Shinto Religion, the Emperor remains divine.

Also, one dichotomy between the Imperial House of Japan and the dynasties of China was that whereas China had Dynastic cycles, Japan did not. The Imperial Household of Japan has remained on the Imperial Chrysanthemum throne since time immemorial , an unbroken line for over 2500 years.

 

[cnleio]

So it appears, but as @cnleio alluded to before, we won't really know if this is true until after Xi is gone. The other alternative is that Xi is using the anti-corruption drive as a cover to maneuver his political rivals out of the picture, and clear the way for his preferred proteges. It's an exceptionally cynical way of looking at the world, but it should not be dismissed, since there are precedents for this kind of maneuver.

In any case, good luck to Xi and to China.

Right now the anti-corruption movement help Xi win most of Chinese ppl's trust, last time is Deng's anti-"Gang of Four".

Today CPC's official news opened called Zhou YongKang & his members as the interest group against China's reform. Last time i said Xi will hold a political reform inside CPC, yes he did.

Last time Deng changed China economy, this time Xi might change CPC, just see future development.

人民网：周永康纠结利益集团 权钱勾结阻挡改革

BTW Zhou YongKang is former CPC central committee member, he retired at 2013. A retired CPC official isn't Xi's political rival, he and his members r some interest group inside CPC. Like Jiang also has his interest group inside CPC.

Xi tried to save CPC coz recent years conflicts between the interest group and normal Chinese in China worse than before, many cases due to corruption of CPC officials and that lost credibility to local governments. I said Xi's political reform is only hope for CPC or Class Conflicts inside China society will break down CPC like last KMT.

Chinese ppl hate unfairness, interest groups inside CPC blocked China development coz they were using their power & unfairness to earn money, that lead to a bad influence to China equitable social development.

 

[Hypersonicmissiles]

Just shows Japan is a weak and dying country. It's now a second class power in East Asia. China is the top power now.

 

[Aepsilons]

Despite record Q3 results announced last week, investors fled Qualcomm Incorporated stock. The company, while reporting earnings, disclosed serious problems with licensees and others in China.

The San Diego-based firm should be able to negotiate its way out of current disputes in that country, but its long-term predicament there looks incapable of successful resolution. Moreover, Qualcomm should be concerned that its China troubles will spread to other developing countries, a development that could be beyond its control.

On Wednesday, the company reported that it is in a dispute with a Chinese licensee and expressed its belief that other manufacturers have been underreporting sales of licensed products. Moreover, Qualcomm suggested some companies are delaying executing licenses. The giant, “a toll collector for almost every smartphone made,” is entitled to royalties for mobile devices, even for those not incorporating its chips.

Qualcomm expects the licensee matters, which affected the just-released Q3 results, to get worse in the current and succeeding periods. In an interview with Reuters, Derek Aberle, the company’s president, said the impact could potentially last “a number of quarters until we can get these things resolved.” Qualcomm estimates that this year it is not collecting licensing fees on 170 million to 260 million handsets in China.

Qualcomm’s main problem is that China’s National Development and Reform Commission has, according to Chinese state media, determined that the company has a monopoly in China. Moreover, it is clear from such reporting that the Commission has come to the conclusion that the company abused its position.

At the moment, it is not clear what Qualcomm did wrong. The Securities Times, a state-run paper, says Qualcomm lowballed royalties for patents to injure competitors and maintain market share. Other reports suggest the company was using its dominant position to overcharge manufacturers. Aberle told Reuters the NDRC has been looking at the interaction between Qualcomm’s licensing and chipset businesses.

In any event, the NDRC is now pouring over Qualcomm’s China sales data, a sign it has made its determination and is now calculating the fine. The Commission can fine a violator up to 10% of its revenue for the previous year. In Qualcomm’s previous year—ended September 29, 2013—the company took in $12.3 billion in China. Qualcomm’s penalty, therefore, looks like it could be as much as $1.2 billion.

What will Qualcomm do? It now looks like the company will admit guilt and pay cash. “We just believe whatever the resolution may be, will likely include some form of payment,” said Aberle.

Qualcomm, it appears, is trying to get the anti-monopoly matter behind it quickly. The apparent strategy is that, once it comes to terms with the NDRC, it can begin collecting royalties. Chinese manufacturers have been stiffing the company on payments in part because there has been no resolution of its well-known legal difficulties. In November, Qualcomm announced the NDRC investigation into its conduct.

The investigation, however, is not really about conduct. Qualcomm is in quicksand because it is foreign and—worse—American. Beijing has been targeting American companies that possess valuable technology and other forms of intellectual property. Its attack on Google was especially determined and successful. Its campaign against Apple has continued for more than a year, with its most recent jab occurring this month. Moreover, Beijing is going after Microsoft, Cisco, IBM, even consulting firms. Along with Qualcomm, Beijing is also investigating InterDigital, another American wireless company.

Qualcomm is especially vulnerable. In the last nine months, royalties produced only 29% of its revenue but 77% of profit. China accounts for almost half of the company’s total revenue. The NDRC ruling, in all probability, will require Qualcomm to reduce its licensing fees, what makes it so attractive to the markets.

As Forbes contributor Panos Mourdoukoutas notes, Beijing is about to “permanently change the rules of the game for the company” by “regulating the tolls Qualcomm collects in the fastest growing market in the world for its products.” It is almost certainly no coincidence that the NDRC is investigating the company just as China is rolling out its 4G network and trying to keep costs down.

What’s worse than regulation? Qualcomm has to be concerned that the NDRC’s decision will be framed in such a way as to undermine Chinese laws protecting intellectual property. Qualcomm is valuable because of its patents on mobile communication. If China’s legal framework does not protect those rights, its “whole model starts to fall apart,” as Bloomberg’s Cory Johnson pointed out on Friday. That would be, he said “the worst nightmare for Qualcomm.”

And what happens in China might not stay in China. What Beijing does, unfortunately, could serve as the basis for enforcement actions elsewhere. As Johnson said, “The very basis of intellectual property isn’t going to hold up if China doesn’t want it to.”

Jim Cramer, who is bullish on Qualcomm, last week wrote that the company’s “situation is resolvable.” There will be some resolution, but as other foreign companies have found out, Beijing keeps attacking until it gets what it wants. Beijing wants Chinese companies to use Chinese products. That’s the unmistakable message of its half-decade campaign to indigenize technology.

Qualcomm’s real crime in Beijing is not being Chinese. And in China, it’s now open season on foreigners.


Qualcomm In Quicksand, Its China Problem Not Fixable - Forbes

 

[Hypersonicmissiles]

Prosecuting departments have been handling an increasing number of cases involving bribery offered by multinational companies to government officials or State-owned enterprises, according to the Supreme People's Procuratorate.

"The worst-hit areas in terms of corruption are pharmaceuticals, the electric power sector and software," Song Hansong, director of the procuratorate's corruption prevention department, told China Daily.

The number of bribery cases being prosecuted has risen markedly across the country, Song said, but he declined to give further details.

Because State-owned companies often need to purchase equipment and components from foreign firms, some multinational enterprises saw this as an opportunity to offer huge bribes to senior managers in State-owned companies or government officials to promote their products, Song said.

Zhao Wu'an, also a senior member of the corruption prevention department, highlighted some common methods of bribery.

"Rather than directly offering cash, they usually hire agents in China to offer the bribe by other means, including supporting overseas study for their children, arranging expensive foreign holidays and, of course, depositing money in a foreign bank account."

In some cases, he said, corrupt officials in State-owned enterprises sent their children or spouses overseas to study or invest in businesses as a disguise to get passports and visas to launder money ahead of their own departure, he said.

Last year, Chinese police accused GlaxoSmithKline China, a British pharmaceutical giant, of offering huge bribes to officials and doctors to boost their product sales.

The company also faced accusations that it transferred up to 3 billion yuan ($489 million) to 700 middlemen over six years to facilitate the corruption.

Four senior Chinese executives at the company were detained, and Abbas Hussain, president of Europe, emerging markets and the Asia-Pacific for GlaxoSmithKline in Beijing, made a public apology and said the company will fully cooperate with police in the investigation.

Song said prosecuting departments face a number of practical difficulties when investigating corruption since getting their hands on evidence can be difficult as there is no paper trail.

Song said the procuratorate will increase education in State-owned companies about the dangers of corruption and offer advice on how to deal with it.

Companies will also take more steps themselves to combat the scourge, he said.

The most effective measure, he said, is to "tighten supervision of ‘naked officials' in State-owned companies".

This term refers to officials who have sent their children and spouses overseas to pave the way for their own departure, said Liu Fang, a lawyer from the All China Lawyers Association.

She also said that greater supervision over State-owned companies, especially those involved in high-cost projects, is required.




My Comment:
Find these rat bastards and execute every single one of them, their spouse and their children.
Take away all their family wealth.
Disqualify their academic achievements including the achievements of their spouse and their children.
Ban them and their entire family from travelling overseas by freezing their passport and using biometric technology to prevent any escape.
Ban any foreign company caught bribing in China from the Chinese market.

Time to bring the hammer down hard on these corrupt foreign firms and corrupt officials.