China Stops Encouraging Foreign Investment

30 Dec

Riddle me this.

A “developing” nation of 1.3 billion people, a country that is supposedly the “engine of growth” for “a new era” in the world economy, stops encouraging foreign investment in its local car manufacturing industry.

Meanwhile, a “developed” nation of 22 million people, a country that survives on digging huge holes and selling its coking coal and iron ore for steel production to said “booming” nation, not only actively encourages foreign “investment in” (read “ownership of”) all its vital industries (agriculture, mining, manufacturing) … it gives $25 million to the world’s biggest (foreign) car maker to build a car it was going to build anyway … sends billions in “stimulus” overseas to buy carcinogenic pink batts and crappy flat screens … and all the while, its Treasurer constantly bleats his continued expectation of a “huge pipeline of investment” to salvage the nation’s savaged finances.

Tell me … which of these two nations’ politicians are best serving the long term interests of their own people?

From Bloomberg:

China will stop encouraging foreign investment in car manufacturing to allow for “healthy development” of a market that saw sales growth plummet to a tenth of last year’s pace.

The change ends seven years of foreign-investor benefits including reduced tariffs on imported plant equipment, said Jenny Gu, a senior market analyst at LMC Automotive in Shanghai…

SAIC Motor Corp., the nation’s largest listed automaker, rose 4.1 percent to 13.88 yuan in Shanghai trading today, it’s biggest gain in almost two weeks…

The nation’s automobile manufacturers association estimated that 2011 deliveries may grow by the least in 13 years as a rollback in policies aimed at encouraging buyers curtailed purchases.

So, China doesn’t want more cars produced? Because a dramatic fall in sales is another red flag that the “China bubble” is bursting?

Or, they just want to guard their own economic destiny?

In either conclusion, by contrast our own politicians are made to look exactly like the short-sighted, self-centred, traitorous sell-outs that they really are.

5 Responses to “China Stops Encouraging Foreign Investment”

  1. Jazza December 30, 2011 at 9:00 am #

    You omitted the adjectives “incompetent” and “deceitful” from the local descriptions.

    I was told yesterday that business people who actually follow what happens overseas, where they buy and/or sell, know a lot of the world is in recession and they predict Australia will not have a happy or smooth sailing 2012.

    Sad to say!

  2. John Comnenus December 30, 2011 at 9:13 am #

    So we can’t invest in their car industry but they are allowed to invest, ie buy up, our resources sector. Our open investment regime should only apply to countries that reciprocate. We should be rewarding genuine free traders not letting the protectionists take advantage of our openness.

  3. Tel December 30, 2011 at 11:30 am #

    You are suggesting that China is better managed than Australia, and that the Australians are slowly selling out their country to China. Well if you let this process run to its logical conclusion then both problems will be fixed when Australia is owned and operated by the Chinese.

    • The Blissful Ignoramus December 30, 2011 at 12:27 pm #

      Actually no, Tel. I’m not suggesting that China is better managed. Only that their regime is looking after their interests, whilst ours is not. When it comes to the specific issue of “management” of the Chinese economy, I’ve posted lots of articles pointing out the grave flaws there.

  4. Richo December 30, 2011 at 5:01 pm #

    Just saw this article in the Aus

    Australia’s sharemarket this afternoon closed 15 per cent down on the year, down 12 points on the day, with an earlier weak gain, inspired by Wall Street’s strong lead, once again petering out by the end of the shortened session.

    At 4111 points, the All Ordinaries index hovers uncomfortably above the low point of 3927 points, set on September 29.

    I am willing to bet at least another 15 per cent will get wiped off next year. Happy new year everyone!

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