Comment by DiogenesKynikos
4 months ago
And then you actually go to China and are shocked to realize that Western companies and brands are everywhere. Starbucks and KFC on every other corner. Tesla, Volkswagen and BMW cars clogging the roads. Rich people wearing Italian luxury brands, middle-class people wearing Nike and Adidas athleisure wear.
China is nothing like your paranoid fantasy.
China’s foreign investment framework is formally open (especially after WTO accession), but:
- Certain industries are restricted or prohibited for foreign investors.
- The “Negative List for Foreign Investment” explicitly bans or limits foreign participation in many areas (e.g., media, education, data services, telecoms, mining). - Some sectors require a Chinese joint venture (you can’t have 100% ownership).
So even though the law allows foreign entry, policy barriers and regulatory discretion make it hard in practice.
To use your example of Volkswagen, their ownership in China is structured around several joint ventures, where it shares ownership with Chinese companies like SAIC Motor, FAW Group, and JAC Group. https://en.wikipedia.org/wiki/SAIC_Volkswagen
> The “Negative List for Foreign Investment” explicitly bans or limits foreign participation in many areas (e.g., media, education, data services, telecoms, mining)
That's a very good for them, by looking at the list. Look at how big a problem the EU now has with its reliance on US tech and military. Sovereignty is very important in strategic industries and in those that allow foreign powers to influence your population.
> of use your example of Volkswagen, their ownership in China is structured around several joint ventures
Volkswagen is a cherry picked example, look at Tesla, which isn't a joint venture. BMW still uses a JV but now holds 75% of BMW Brilliance etc. And it's no longer required for car companies to use joint ventures, that rule was lifted in one of the recent years and more industries were actually opened in the same time.
> Volkswagen is a cherry picked example, look at Tesla, which isn't a joint venture. BMW still uses a JV but now holds 75% of BMW Brilliance etc.
No cherry picking. Purely random. FWIW, according to my quick research there are only 3 vehicle manufacturers that operate and manufacture in China while retaining 100% ownership as a foreign company. They are Tesla (Gigafactory in Shanghai), Lexus (EV plant in Shanghai), and Scania (truck manuf. in Rugao). If this list is comprehensive, then it is very very short, and my original point stands which is that technically the market might be open (barring the exceptions I mentioned), but in practice it is pretty closed because it is so hard to enter due to all the barriers that are put up.
I think it is fair to say, and I think you would agree, that on a spectrum of free trade, China doesn't rank very high.
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