How "foreign" is a multinational which assembles and exports most of its products abroad and retains most of its profits in the host country? China, of course, is what's behind this question.
If GM, Ford, and other American carmakers relocate the bulk of their production from Detroit to Shanghai, can they still properly be considered "foreign" corporations operating in China? As China's boundless domestic market continues to expand, and if retailers like Walmart eventually have more stores and employees there than in the US, should it still be described as an "American" corporation?
Answering my own question, if the majority of shareholders are American, or if the earnings are repatriated back to US banks, then the ownership of these China-centered corporations could still properly be regarded as "foreign", even if the workforce no longer is.
But here too the trend is strongly in the other direction. The "national" shareholding character of US and other leading multinationals is becoming rapidly diluted as institutional and private investors from the faster-growing economies abroad acquire more ownership and control - an outgrowth of the transformation of the developing countries from net importers to exporters of capital, and their growing interest in equity investment.
So far as I'm aware, most of the earnings of the multinationals are not being repatriated back to their home countries. The USD export earnings of US firms operating in China, for example, are converted into yuan accounts in Chinese banks, which the Chinese central bank then sterilizes by buying USD's to roughly maintain the dollar peg and selling yuan-denominated notes and bonds to contain inflation at home. But the earnings for the most part stay in China. Is this not in fact the case?
And doesn't it explain the insistent and increasing penetration of the Chinese financial sector by Wall Street and other European and Japanese banks eager to tap these earnings, as well as the domestic savings of the rapidly-expanding mass of Chinese consumers?
This is not how it used to be. Historically, nationalists fretted about "foreign ownership" because it was transforming their country into a branch plant economy where subsidiaries of large US, British and the other more developed capitalist countries, often in order to circumvent tariff barriers, largely produced for the host market rather than for export, and repatriated the bulk of their earnings back home. Most of their production and jobs also stayed at home.
There was no other alternative. Transportation costs negated any advantage to cross-border labour arbitrage, and the means of communication were too underdeveloped to manage production at great distances. But the revolution in transport and communications technology in the latter part of the 20th century has changed all that, and profitable exporting from lower-wage countries has now become possible.
The transformation of China and Eastern Europe is in part a result of these profound technological changes, because it afforded the massive transfer of Western capital and jobs to these formerly autarchic regions, and enticed their Communist party governments and populations with that prospect. The opening up of these vast new cheap labour pools has accelerated the process which contributed to their transformation.
I tend to think this accelerating interpenetration of global capital in the world economy is no more reversible than was the consolidation of local and regional markets into national ones. If that's the case, it challenges classical nationalist and Marxist concepts about foreign ownership and the inevitability of inter-imperialist war based on the competing interests of national bourgeoisies. But I'd be interested to know what others think, or if they can direct me to material which contradicts the above.