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Strategies & Market Trends : The Financial Collapse of 2001 Unwinding
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To: DinoNavarre who wrote (4130)12/15/2019 11:29:46 PM
From: Elroy Jetson  Read Replies (1) of 13801
 
In theory it's possible for US and other foreign businesses to get their profits out of China, but not in practice.

So US and other foreign companies charge their subsidiaries in China invoices which include an overhead charge or a higher price than they'd charge elsewhere, which effectively gets their profits out of China.

This practice has often seen the resident foreign managers arrested until the Beijing central government intervenes because they don't want the businesses to leave.

As international law firms advise, "Business people need to understand and incorporate a profit repatriation strategy from the very beginning to ensure access the profits earned."
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Russia is even more difficult because it is not even legal to make a profit in Russia. If you do, the tax on profit exceeds 100%.

All Russian businesses keep two sets of books and pay bribes to the tax authorities, while foreign firms like BP do the same as they do in China - submit inflated invoices to their Russian subsidiary.
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This style of business doesn't appeal to Chevron or myself, but clearly plenty of international firms including The Trump Organization are wiling to do what needs to be done to do business in China and Russia. Chevron operates in China as a stakeholder in Chinese businesses because business practices in China are incompatible with what Chevron is willing to do. While you find it shocking, Donald Trump, GM, Apple and tens of thousands of others are willing to leave what ever ethics they have at the Chinese border - that's the way it works.

The basic communist laws have still not been changed because these societies are still ambivalent about private businesses. All large 'private' firms in Russia were effectively seized by Putin.

As Vladimir Putin says, "The person who tends the egg deserves compensation, just so long as they do not come to believe they own the egg."

One of the most important negotiations, to himself, Donald Trump has been involved with since he was elected was obtaining another 135 or so trademarks in China for The Trump Organization.
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