Huang is teaching in an Ivy league university alright, and also got paid big money from elite Chinese universities for little so-called consultation. I disagree with him on a lot of things he said about India. As for what he said about China, some is true, MOST are not. It is true that "the main problem is that it does not have a fair, level, playing field for domestic private firms", but it is NOT mainly due to the SOE monopoly, it is mostly due to the preferential treatment to ALL foreign-owned/JV companies. To start with, the domestic companies have to pay twice as much of the tax on their revenue as foreign-owned/JV companies. That alone would and have choked a lot of domestic companies to death! and deplete them from investing money in R&D!
As for "huge amount of money is wasted", that is true for ALL big enterprises, Chinese or Western, within China or within the US. If you don't believe, just ask some who work in the big US companies, they will tell you there are a lot of waste, bureaucracy, and red tapes going on in those big US corps. And those big US companies, just like some big Chinese SOEs, are among the most Inefficient ones in the world. Quite a number of Chinese who are working for Fortune 500 have told me this.
And BTW, go ask some people who know how Indian gov. works, they will tell you, without exception, that red tapes, inefficiency and bureaucracy in India are among the worst in the world, much much worse than they are in China! Most of that had to be credited to British colonial ruling!
Huang is very pro-West, so he will never tell you this. Or maybe he does not know at all.
One big inefficiency in terms of capital spending in China has NOTHING to do with ownership of the company, it has everything to do the competition among dif. provinces. And this can ONLY be solved/controlled by the restriction of the investment in the fixed asset at the state level. Vast amount of capital has been wasted in China due to laisser-faire investment in fixed asset among dif. provinces, and thus create a big problem of over supply. When steel price was sky rocketing, every province in China wanted to build a big steel plant. When solar play is hot (they all saw STP successful IPO and raised >$400 million, and the CEO became a billionaire overnight. The list goes on and on. The planning at the State level is the ONLY way can prevent this from happening!
What Huang encourages China to do is exactly what the US gov. and companies want China to do. That is to let 30+ dif. provinces/municipalities in China to compete among themselves, and make the suicidal price war among themselves, and then the US and other developed countries can take advantage of that. You know, there is actually a Chinese saying for this, called Yu Bang Xiang Zheng, Yu Weng De Li-- means, when fish and clam are fighting and killing each other, fisherman will be benefited! This is exactly what will happen if China does not have a tight control at the state level!
And unlike Huang, I am an economic nationalist<g>. So it is only natural that I disagree with him a lot!
I guess I can continue, but you got the idea<g> |
