China unveils draft law to allow fully foreign-owned enterprises

https://www.thehindubusinessline.com/news/world/china-unveils-draft-law-to-allow-fully-foreign-owned-enterprises/article26129186.ece

by beefman • 7 years ago

142 67 7 years ago

thehindubusinessline.com

walrus01• 7 years ago

Foreign Owned Enterprises, like the one Erik Prince is setting up to help train armed government law enforcement authorities in Xinjiang province?

https://www.nytimes.com/2019/02/01/business/erik-prince-xinj...

toxik2• 7 years ago

The recent press release of Ai Weiwei comes to mind, perhaps particularly this:

There are no clear laws, only interpretations of the law based on the Party’s interests. China is not a nation under the rule of law. China is a nation under the rule of the Party.

https://www.gardinermuseum.on.ca/ai-weiwei-releases-statemen...

TazeTSchnitzel• 7 years ago

The Constitution of the Soviet Union guaranteed, among other things, freedom of speech.

pas• 7 years ago

Maybe the PRC's constitution does the same, but there are always exceptions, for example for national security.

Pharmakon• 7 years ago

As the Radio Yerevan jokes went:

Radio Yerevan was asked: "Is it true that there is freedom of speech in the Soviet Union the same as there is the USA?"

Radio Yerevan answered: "In principle, yes. In the USA, you can stand in front of the Washington Monument in Washington, DC, and yell, ´Down with Reagan!´, and you will not be punished. In the Soviet Union, you can stand in the Red Square in Moscow and yell, ´Down with Reagan!´, and you will not be punished.

And

Q: What is the difference between the Constitutions of the USA and USSR? Both guarantee freedom of speech.

A: Yes, and the US Constitution also guarantees freedom after speech.

awakeasleep• 7 years ago

It's frustrating to consider how that same standard applies to the USA.

We certainly have enough laws that everyone is a criminal and selective enforcement perverts the idea of justice.

Of course, I'm not saying things are equally as corrupt as they are in China, but we're definitely on the same spectrum. Maybe the difference is, in the USA, "The Party" includes both big business AND the government.

seanmcdirmid4• 7 years ago

It is always a spectrum. America is hardly perfect, but rule of law in the states is much more developed than in China. Especially constitutional law, which the CCP sees as a western abomination (so the Chinese constitution garauntees freedom of speech, religion, and so on, but is meaningless because the judiciary is not a check on the party).

toxik2• 7 years ago

The US has an independent and democratic justice system. They are not on the same spectrum.

threeseed2• 7 years ago

but we're definitely on the same spectrum

That is absolutely ridiculous.

USA has an independent judicial system, investigations of government behaviour via congressional committees, oversight over consumer impacts via Bureau of Consumer Protection, oversight over corporate governance via SEC. China has none of this.

I would also refer you to the Corruption Perceptions index: https://www.transparency.org/cpi2018

USA has a score of 71/100 and for China it is 39/100.

jeffbax• 7 years ago

This is silly. In China it's nearly LITERALLY both government and big business. You cannot be a big business without the government saying so, and most of the business leaders are party members.

This is a far cry from in the states, where while crony capitalism is an issue -- it isn't the actual law like in China when it comes to large firms and the amount of state intervention.

hitsholy• 7 years ago

Chinese constitution: "No state organization, social group or individual may force a citizen to accept or not to accept a religious faith, nor can they discriminate against either religious or non-religious citizens."

Chinese government has

- placed 1M muslims into internment camp

- forced muslims to eat pork and drink alcohol

- arrested muslims observing Ramedan

- placed muslims in "re-education centers" to forcefully convert them.

I don't trust anything this evil government says.

dkural• 7 years ago

Here's some journalism on the matter: Washington Post: "China is creating concentration camps in Xinjiang. Here’s how we hold it accountable.": https://www.washingtonpost.com/opinions/china-is-creating-co...

NYTimes: "China Is Detaining Muslims in Vast Numbers. The Goal: ‘Transformation.’" https://www.nytimes.com/2018/09/08/world/asia/china-uighur-m...

"China’s Detention Camps for Muslims Turn to Forced Labor" https://www.nytimes.com/2018/12/16/world/asia/xinjiang-china...

https://www.nybooks.com/articles/2019/02/07/reeducating-xinj...

The parent comment calls this evil. Whole-scale internment of an entire population without any legal due process; resulting in deaths of those who resist; does fit the bill.

logicchains3• 7 years ago

If you read the two paragraphs after that:

"The state protects normal religious activities. No one may make use of religion to engage in activities that disrupt public order, impair the health of citizens or interfere with the educational system of the state.

Religious bodies and religious affairs are not subject to any foreign domination."

The Chinese government justifies their actions in Xinjiang as an attempt to prevent extremism (terrorists disrupting public order) and prevent foreign extremist influence, so technically the government could claim its actions in Xinjiang are "protecting normal religious activities". The statement that "religious affairs are not subject to any foreign domination" could allow it to argue that it's free to define Islam however it sees fit, such that it could claim things like Ramedan are artifacts of foreign domination.

Note that the government is not arbitrarily oppressing muslims; the muslim Hui minority are not being locked up, as they haven't been pressing for independence. The Chinese government doesn't care about religion, what it cares about is stopping anyone who tries to resist it, such as separatists, and the separatists in Xinjiang just happen to be muslims, and the government sees their religion as a motivating factor behind their separatism.

Of course, this doesn't make it any more acceptable, I'm just pointing out that the Constitution as written gives the government a lot of leeway to do such things without technically breaching it.

Another line:

"Article 51. Non-infringement of rights

Citizens of the People's Republic of China, in exercising their freedoms and rights, may not infringe upon the interests of the state, of society or of the collective, or upon the lawful freedoms and rights of other citizens."

So the government could justify pretty much anything in the name of not allowing people to "infringe upon the interests of the state".

vinceguidry3• 7 years ago

He's... not wrong. But it's important to realize that rule of law is an Anglo legal and cultural invention. Rule by humans is the default, 'natural' way of organizing human behavior, and innovations over that have to be iterated slowly. We simply cannot expect Western philosophical concepts, as great as they are, to simply be transplantable in other parts of the world just cuz it worked so great for us.

Or does Mr. Weiwei expect the Chinese Communist Party to willfully give up power in order to put itself under a legal regime?

Even Europe has moving slowly away from rule of law towards rule by international technocratic bureaucracy, borne out of the need to make a historically extremely heterogenous landmass peaceful. The UK was never going to be part of that tribe, it's fine with its rule of law.

barry-cotter3• 7 years ago

He's... not wrong. But it's important to realize that rule of law is an Anglo legal and cultural invention.

And Dutch, Norwegian, Danish, Swedish, German (speaking), Finnish, Latvian, Estonian at a minimum. The rule of law is very much not an Anglo thing. Outside North(Western) Europe where the rule of law absolutely was a thing you’d be pretty hard pressed to deny that it was never present in Iberia, particularly Aragon, Italy or the entirety of both Latin and Orthodox Christendom. Hell, the Ottoman Empire’s kanun law was based on... canon law.

A government of laws, not men was an ideal dating back to Rome and indeed much earlier. But Christianity preserved Roman law. There were clearly areas that approached rule of law more and less closely but the idea that it’s an Anglo thing is historically ignorant to a ridiculous degree. How closely any particular state approached it varied a great deal, France and Hungary weren’t Prussia or Russia but they certainly weren’t England or Holland either.

If you want to learn more about the various ways premodern societies ordered themselves Francis Fukuyama, Origins of Political Order, is a great place to start.

webmobdev• 7 years ago

It's easy to make laws, it's the interpretation and implementation that's the real test.

crazy5sheep• 7 years ago

And the Chinese govt can also have a thousand different ways other than law to harass foreign-owned companies. that said these law means nothing to real business in long-run, but just a response which attempts to fool the US govt for stopping the trade war.

dmortin• 7 years ago

If a company is in China then I assume most of the employees will be Chinese as before.

DeonPenny• 7 years ago

This time though the US plan on having a mechanism to allow them to swiftly punish china for using those abilities unlike before. Quartley reviews and what not with mandatory tariffs.

forkLding• 7 years ago

Ironically it seems in the comments that making this law means no difference, if so whats the point of a trade war.

gred• 7 years ago

Great question. My own reactions over the past months have been something along the lines of (1) "Not the best execution, but maybe we'll see some positive change..." -> (2) "Cool, looks like things may actually change!" -> (3) "Wait a minute, I don't trust that this is real... so what's the end game??"

adventured• 7 years ago

If the trade war concludes in a deal, more realistically there will likely be some improvement, while abuses in the national interest will also continue.

Let's assume the worst case scenario however, that there is an expectation and result of zero improvement. The goal would be to push supply chains out of China by increasing political concerns and costs. Business hates chaos and risk in the supply chain. Whether some of that shift ends up being back to North America and Europe, or all of it goes to other nations in Asia that will never be the potential threat that China is, it's all a net gain strategically for the US and Europe.

Indonesia + Vietnam + Bangladesh + Philippines = ~620 million people.

Brazil + Mexico have 340 million (larger than the US). India has 1.3 billion. Nigeria has 190 million people.

There are plenty of other places to consider when it comes to allocating investment for overseas manufacturing (depending on what you're making). It will take time and cost money to alter supply chains, however that is always an inevitability. Every few decades supply chains get remade due to cost changes, political issues, and so on.

starpucks• 7 years ago

And.... would you believe them? Would a corporation sink billions into there knowing full well they can come up with arbitrary laws to get their way? How about if there is a war fought, would you believe that they won’t sieze all the assets? How about getting money out of their country? And how about subjecting your company to the inevitable corporate espionage that will happen? Would their court system actually protect your company? Hmmmmmmm

chrischen4• 7 years ago

Yes they already do that. Even Taiwanese companies like foxconn and HTC.

mistermann3• 7 years ago

The China of today seems less safe than the China of ten years ago though. Are foreign companies making big investments lately?

jorblumesea2• 7 years ago

Why would you ever believe anything China says? Their game is clear and obvious at this point. Avoid that country like the plague if you care about the longevity of your business.

sonnyblarney• 7 years ago

Here's another gem of a 'law', Constitutional no less:

"Article 35 of the 1982 State Constitution proclaims that "citizens of the People's Republic of China enjoy freedom of speech, of the press, of assembly, of association, of procession, and of demonstration.""

[1] https://en.wikipedia.org/wiki/Constitution_of_the_People%27s...

logicchains3• 7 years ago

"Article 51. Non-infringement of rights

So technically those rights may only be exercised when they don't "infringe upon the interests of the state".

rhegart• 7 years ago

Good work Trump. The one thing I absolutely love about his administration is the pressure on China. Didn’t back down from all the pressure from literally every group. His method works, he’s getting concessions. The TPP at its best would be 1/100th as effective and would have taken 20+ years to implement. Our cyberwar truce was a joke policy.

NicoJuicy• 7 years ago

No, he is not. He's still getting an empty hand dealed by the dealer.

justaguyhere• 7 years ago

His method works

Okay, can you list real, permanent, verifiable changes as a result of his "method" (whatever that is)?

Anyone can get empty promises, empty laws that have no teeth etc for PR purposes...

mmwelt• 7 years ago

So what's the difference between WFOE's (Wholly Foreign-Owned Enterprises[1]) and the new fully foreign-owned enterprises? WFOE's have existed for a while.

[1] https://en.wikipedia.org/wiki/Wholly_Foreign-Owned_Enterpris...

baybal2• 7 years ago

Misnomer here, wholly foreign owned companies were there there for more than a decade. What the law is said to do is to remove "qualitative distinctions" in between 3 foreign owned company types.

It will not end the prohibition on foreign ownership in restricted industries.

What it will do is that the state will not be allowed to say "you can't do that, but we will let you do it in a joint venture"

Now, the question in between doing a JV and setting up an own company is up to an applicant in every industry.

China unveils draft law to allow fully foreign-owned enterprises

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