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Beijing Sinnet says it will buy Amazon Web Services’ China business

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Re: Beijing Sinnet says it will buy Amazon Web Services’ China business

#61

Earlier quoted context omitted.

> China will likely start opening up more ... Let's not forget that there is an international trend to close down more (to use the same metaphor), including the U.S. and U.K. China could follow that trend too, and certainly the progress of free trade no longer can be assumed. The President of the U.S. just gave an unprecedented speech at the Asian summit, criticizing institutions of rules-based, cooperative internati…

Trump's an awful, undiplomatic speaker, but that seems like a wilful mischaracterisation of his position. His complaint is exactly that America has opened up its economy to others in Asia, but that they haven't reciprocated. Whether or not his isolationist threats makes any sense, it's absolutely true that some countries, China most of all, have limited access to their own markets while taking full advantage of open…

> a wilful mischaracterisation of his position

Perhaps you could present some evidence?

I paraphrased what he said accurately; 'he misspoke' is baseless and an insufficient explanation. His policy is America First, a term that purposely revived from nativists and isolationists of an earlier era. The President and his administration has advocated it over and over, in multiple forums. His national security advisor and (secretary of state or another high official) wrote an editorial asserting that there is no "community of nations", and that the U.S. will serve itself without significant regard to others' interests. They've also asserted, repeatedly, that the U.S. has no interest in democracy or the rights of others.

The parent's claims regarding Xi's speech are also baseless. Like Xi's predecessors and peers the world over for generations, Trump being the notable exception, he appears to understand that all benefit from the free trade regime and that the powerful nations, including China and the U.S., benefit most.

Re: Beijing Sinnet says it will buy Amazon Web Services’ China business

#62

Earlier quoted context omitted.

I mean, the game they play is really hard to fight against. It usually goes something like this: * Attract western businesses to make investments based on various capital incentives. You are a free market, after all. * Once they are established and comfortable, start imposing restrictions, stealing IP and undercutting foreign companies. Make life increasingly difficult, except for those companies which you really nee…

> Why play that game? You can't win. 1 billion people to buy your stuff is pretty tempting!!! If you are a CEO with 10 million shares of stock in BigCo.. and profits are going up like 1% a year.. why not roll the dice with China? If it works for a year, you make a bunch of money and cash out. If not, you don't "lose" anything.

Yeah, the CEOs who enter the Chinese market are long gone when the company pulls back.

I remember a conversation I had in the late 1990s with the owner of an Indian textiles company (father of a friend). He said Western companies investing in China were idiotic. He was upset because Chinese mills were selling textiles for cheaper than the raw inputs. His point was that anybody who thinks they can "compete" in such a market is stupid. The Chinese government (buoyed by dumb Western money) can support their producers for longer than any non-Chinese company can stay solvent. That will remain true for the foreseeable future.

The only winning strategy is to use this state of affairs to your advantage, which mostly means exploiting Chinese labour and investments to bolster your position in foreign markets. But trying to compete directly in the Chinese market is just dumb. The government isn't stupid. Long-term they know that they'll need every penny of their consumer market to prevent the financial collapse of their producers. And even if the collapse comes, that makes it all the more important to capture that value.

Better to wait it out until the Chinese market matures. You'll end up no worse than someone who entered prematurely, and probably better off.

Re: Beijing Sinnet says it will buy Amazon Web Services’ China business

#63
post #45
post #8

Two things I take away from this. 1. Amazon decided that the risk of doing business in China (handing over information & know-how to the government, helping it suppress the human rights of its citizens, etc) was not worth the revenue that it would make. 2. It sold for $300 million. That means its run-rate was probably only $50 million a year or so annually (or maybe less). That's not very much at all, given that AWS'…

Amazon didnt decide anything, you simply CAN NOT do business in china(in selected sectors) without majority domestic ownership. Unlike west globalization trends, China actually cares about its own interests first, not the interests of mega corp owners.

The government is responsible for all the citizens, but mega corp only responsible for its owner, isn't it?

Re: Beijing Sinnet says it will buy Amazon Web Services’ China business

#64
post #15

Earlier quoted context omitted.

Why couldn’t they? No/little international pressure to do otherwise and a currency printing press to subsidize back room deals. This is a great strategy for China and it’s utterly insane that we allow this situation to continue.

> it’s utterly insane that we allow this situation to continue. That is the point I am trying to make. How long before everyone says this is insane and tries to start blocking deals? Though China's inflation due to currency printing press might come home to roost before that happens.

It's dumb greed. China dangles the prospect of a 1 billion+ consumer market in front of Western companies, and rational thinking ceases. The upside looks infinite.

I bet that Taiwanese, Japanese, and Singaporean corporations filter and structure their deals differently given that they have much deeper and historic ties to China, and are more familiar with long-term planning in the context of centralized political economies. Perhaps someone could confirm or dispute that.

Re: Beijing Sinnet says it will buy Amazon Web Services’ China business

#65

Earlier quoted context omitted.

Adding money to the supply of money causes inflation regardless of the "productive purpose" for which it is used.

Banks add money to the money supply daily. Money that didn't exist before a loan is approved suddenly appears out of thin air, due to the fractional reserve system. Billions of dollars in loans are created every single day in this way, and even before they are paid, more is created. Where is the inflation? Instead, we live in a deflationary world. Countries, through their development banks do exactly the same. No inf…

Not necessarily disputing your point, but part of the reason that there's deflation (or at least lack of inflation) is because banks _aren't_ investing in production capacity. Corporate debt is at an all time high, yes, but AFAIU mostly because corporations are swapping current earnings for debt because in the current environment it's [presumably] marginally more efficient.

Capital investments largely are coming from equity markets, VC firms, etc. There's so much free cash floating around globally that there's little need to leverage fractional reserve banking. That's why banks so vociferously oppose margin controls--they're having to compete with all the cheap money.

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