This questions was asked by an attendee during a recent Proformative
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This questions was asked by an attendee during a recent Proformative
You can view a video of the
Largely, no and no.
On the former, I think you might see a parallel, but that is correlation and not causation. SOEs specifically, and firms that operate in a manner that corrupts the market in general, are naturally inefficient. China has been able to throw immense resources at growth, including in inefficient ways. This is not necessarily a bad thing for them; when you hit your car's accelerator, your car will burn gas less efficiently, but if you don't want to wait 20 years to get up to highway speed, that could be the correct choice. They've been accelerating, but they will, eventually need to back off because they are facing a series of incoming challenges that will prohibit those inefficiencies; a demographic cliff, continued slackening foreign demand, lagging domestic demand, continued rise in input costs...a long list.
On the latter I think you have cause and effect reversed. One good parallel was USSR/Russia during the Gorbachev/Yeltsin period. Gorby needed to be economically competitive, and this required more openness. The combination of economic opportunity and it's necessary partner, information, created the opportunity for (and perhaps more importantly, demand for) more civil freedoms. I don't think it is generally a natural thing for governments to grant additional freedoms...they tend to get demanded. In China the rising middle class creates a significant threat to the Party, and the Party will need to respond to that threat. Will they crack down, will they trickle out increases in rights slowly, or will they face an internal crisis. The latter...there are plenty of brush fires burning, and the Party is not unaware of this. The former they can probably not afford, because it would result in increased risk of the latter. I think they will shoot for the middle course, and try to find a way to preserve the one-party system. In support of that as a reasonable outcome, note there are some monarchies that are surviving perfectly well today, albeit less absolute. England, Denmark & Sweden historically, survivor regimes in the Middle East today, are examples of avoiding revolutionary change. This is a manageable transition, but not an easy one. My expectation is that they will tend towards a German Ordoliberalist / social market approach that involves significant investment and control by the state, with an eye towards targeted growth.
The FCPA is an example of good intentions reaping bad results.
This law hampers US companies from competing on a level play field in most parts of the world.
In most parts of the world; payola, graft, corruption, what ever term you wish to use is the norm. Is it wrong? Depends on which side of the pond you sit on. But regardless of the morals, ethics or legalities, it is real, it is accepted and business is transacted under those rules.
If other major countries permit their citizen businesses to operate in that environment and we don't, then how can the playing field be level.
Now to point: Since the Chinese at the moment don't care about the FCPA, unless a company gets caught and it becomes a major public relations nightmare; I don't see a change in the way they do business.