After 10 years of monopolistic profits in many areas, china has finally begun anti-foreign monopolies。
On 20 august, the cdrc announced that 12 auto parts manufacturers in japan had managed to monopolize the price of parts of their products and had been fined 1. 235 billion yuan. This is the latest anti-monopoly development in china, and the automobile sector is a priority area. The penalties were based on the antimonopoly act adopted by china in 2007 and the main points of the certification monopoly were: one, substantially higher than the average price and profitability of the european and american countries; and two, complicity in high pricing。
China's antimonopoly campaign has been controversial, and it has been claimed that only administrative monopolies should be countered and that the market's natural monopoly should not be countered. Indeed, the antimonopoly was introduced from europe and the united states, and we are in line with international standards and operate in accordance with international standards, while japanese automobiles were once subject to antimonopoly in the united states. "only europe and america are allowed to set fire, and china is not allowed to light"
In the view of the author, the creation of foreign monopolies in many industries in china is self-inflicted。
In the mid-1990s, there was a heated debate over the path of state enterprise reform. One option is to “marry first” the best state enterprises to multinational corporations in order to introduce foreign investment to boost the export development economy. The second option is that china, which is not a small economy in hong kong and singapore, has a huge market and should implement a “share partnership” system that stimulates the creativity of entrepreneurs and workers, thereby increasing productivity and, through full domestic competition, creates an international class of enterprises open to reciprocity。
The latter view was taken when, as a central media journalist, i, after studying the differences between the competitiveness of state and foreign enterprises in the consumable tyre industry in 1994, published " recovering the impact of transnational capital " , stating that the first marriage of a pretty girl would lead to the total collapse of a future state-owned tyre company. In 1997 and 1998, i studied the reform of the joint-stock system in anhuizhou and hunan hoyang, with strong public support. The 1999 book, " china on balance " , has systematically demonstrated that china's main problem is the delay in reform (reform of the administrative system and reform of the property rights system, which does not fully unleash the creativity of business operators and employees) and that opening up is behind schedule. It's like a man walking on a high-altitude rope with a balancing pole in his hand, one end in reform and one end in openness. Excessive openness and a lag in reform can result in a loss of balance and eventually fall. The book was then banned。
China's economic mainstream has finally chosen the first path. From a pretty girl to joining wto, foreign investment enjoyed supranational treatment. The advantages of capital, technology, management, channels and brand names inherent in transnational corporations, and the annexation and even progressive dumping of china's best state enterprises in various industries, are bound to produce two results: one, foreign investment, which creates a monopoly over many industries in china; and two, which, with the exception of the “pretty girls” of the annexation, left the poorer state enterprises in total bankruptcy, resulting in the drop-off of future generations in 1990, with 80 million state employees laid off, causing enormous damage to domestic demand。
Almost all chinese industries have opted for the second path in the telecommunications industry. The state has relatively protected the telecommunications industry, and china has become a global, peer-to-peer transnational corporation for the purpose of equity cooperation。
Foreign direct investment (fdi) has indeed been a driving force for china’s economy’s rapid economic growth in the early days of the invasion and expansion of market ownership; and when multinational corporations’ chinese factories have increased exports to europe and the united states, they have also brought more trade surpluses and contributed to growth. The problem, however, is that between just a few years and 2005, tncs have developed a monopoly position in many areas in china and have begun to return profits to their parent firms. The trade surplus, on the other hand, is nearing its peak, with a gradual shift from a positive to a zero-driven growth dynamic, or even negative impact。
Against this background, the appreciation of the renminbi in july 2005 was inevitable, namely, to attract international hot money speculation into china through the appreciation of the renminbi in order to bridge the liquidity gap created by the return of fdi profits and to continue to drive the boom in the economy。
There is no doubt that international hot money came to china for speculative profits, which contributed to the 2007 boom in the stock market, the 2011 peak in the pe, vc bubble, the 2012 peak in commercial bank stock profits, the 2013 peak in the building market, and the beginning of 2014 peak in the short-term property bubble, with international hot money, without exception, the winner of the bubbles。
In the meantime, china's economic liquidity has shifted from being largely domestic in the early 1990s to more than 100 per cent in 2014 (at the end of june 2014, china's foreign exchange stood at rmb 2,945 trillion, china's base currency balance at rmb 28 trillion and foreign exchange at 105 per cent of the base currency)。
To date, monopoly-based tncs have continued to return profits; the trade surplus has grown sharply and collapsed; and international hot money, after china has earned a full share of money, is prepared to return to the expected dollar hike, which is how much foreign investment has driven china’s economic growth since the mid-1990s, and how negative it is likely to be in the coming years。
Today, china has finally begun to correct the bitter consequences of the “preliminary marriage” plus foreign supranational treatment, but foreign monopoly has grown, and it has been difficult to support good ethnic enterprises in various sectors to resist the court. But it's always a step forward。
In conclusion, i would like to remind you that if china were to move away from high levels of foreign investment and return to a relatively independent and self-empowerment development path, it would be a painful process, from the decision-making level to the national level, with adequate psychological preparation. The author is the founder of the chinese think tank
October 2004 to date, as editor-in-chief and deputy editor-in-chief, financial and economic information centre, first daily financial and economic journal
Responsible editor: zhang dei
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