In Reponse to Rachel Kleinfeld
I see much of the same in China. If Chinese companies are to becoming more sensitive to governance, labor rights, or environmental issues, they will do so because it either makes economic sense - like an American company that makes a deal with a union because it makes economic sense - or it makes sense in order for them to get Chinese consumers. Fifteen years ago, Western companies might have been able to demand more from Chinese partners. Today, I'm not so sure. Certainly, Chinese firms still need Western technology and investment, but far less than in the past. And, as compared to ten or fifteen years ago, when many Western companies were not actually making much money in China - see the many horror stories described in Joe Studwell's book The China Dream - today many more are making money, having better mastered the Chinese consumer market. Makes them less likely to rock the boat.
Absolutely right regarding foreign companies. Because China's economy is so tightly controlled by its government, American and European companies go their as supplicants rather than as applicants. They want to get in more than China wants them in. They have almost no leverage and are more likely to tacitly endorse the status quo than to cause much real change.
thosethingswesay.blogspot.com
June 28, 2007 10:22 AM | Reply | Permalink
We like to flatter ourselves with the notion that "asians can't think" and will therefore continue to need our technology, and investment. Goldman Sachs Intenational just published a study that thrashes that perspective. HERE
The study focuses on the growth of the global reach of the BRIC Tigers (Brazil, Russia, India and China). To quote:
Throughout the article you expect the bottom line to be that all of these BRIC companies that have moved up the tier are there because of unfair capitalization from their governments. Not according to Goldman Sachs. They cite one major reason being:
But they also cite a more fundamental reason, corporate attitude:
Ok, you might expect that in the oil industry, considering the growing appetite for oil in the BRIC countries. The study claims that fully 70% of all new exploration is being done by these companies. But the study is quick to point out that this global trend is also found in industries as diverse as mining and insurance. Goldman Sachs predicts food and pharmaceutical sectors will join this trend quickly.
Not too shabby for people who "can't think".
June 28, 2007 4:25 PM | Reply | Permalink