On May 27, 2007, at 11:11 PM, Marvin Gandall wrote:
> Most of this burgeoning production appears to be by foreign firms.
> Since
> Deng, we know that the country has been thrown wide open to to foreign
> investment and I have understood that they were leading China's
> development,
> but not at all to the extent suggested in an article from the
> latest issue
> of the Australian Marxist publication, Green Left Weekly, posted on
> Lou
> Proyect's list last week. Under the headline "China: Foreign capital
> controls three quarters of industry", Eva Cheng - citing a study
> from the
> Beijing Communication University - writes that "foreign capital
> controls the
> top five firms in every industry where Beijing allows foreign
> investment.
> Additionally, in 21 out of China's 28 leading industrial sectors
> foreign
> capital controls most of the assets."
This is at odds with what most other sources say. E.g. a 2006 working paper from the IMF <http://www.imf.org/external/pubs/ft/wp/2006/ wp06265.pdf> says:
> Foreign-invested enterprises (FIEs) account for a small share of
> investment.6 The share of
> such investment has hovered around 10 percent of total investment,
> roughly split between
> foreign-invested firms and those from Hong Kong SAR, Macao SAR, and
> Taiwan Province
> of China. This finding is consistent with the data on sources of
> financing, which show that
> foreign capital is only a small share of financing.
And much of the investment, reports the paper, is from firms' internal funds (as opposed to funds raised externally from banks or markets - thereby repeating the experience of most of the rest of the world). Note too in the memo on the Article IV consultation <http:// www.imf.org/external/np/sec/pn/2006/pn06103.htm> that direct investment is a relatively small share of the BoP.
> If accurate, these statistics suggest a degree of foreign control
> characteristic of a colonial or semi-colonial dependency - the
> country's
> condition before the Chinese Revolution.
China is plainly not some sort of dependency; Hank Paulson is begging them to open up their financial markets and they're giving him the brushoff. Which is another reason to wonder about the stats.
Doug