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Why Profit Zero Works In China

Far Eastern Economic Review published an article of mine in March 2008, wanted to introduce the piece here. For those less familiar with Far Eastern Economic Review, it is one of Asia’s leading business publications, and it shares an association with the Wall Street Journal. A couple of paragraphs, along with the link:

Why Profit Zero Works In China

“… One of the big questions going forward is whether the government will allow foreign companies to compete unfettered, or whether they will burden foreign firms with increased taxes, regulation and the unequal enforcement of laws that were meant to apply to foreign and domestic firms in equal measure. China has been more open than either Japan or Korea at comparable stages in economic development—but one has the sense that profit zero will play out on the macro scale, that the day will come when the nation will come to see the work of foreigners as largely done.

U.S. politicians pushed bilateral trade with China expecting that greater economic prosperity in China would lead to increases in political openness, and trade was seen as a way of integrating China more closely into the global economy. Chinese political leaders have viewed international trade differently by seeing exports as a means to an end. China wishes for itself greater levels of self-sufficiency. China may never be able to do away with exports, but the nation looks forward to a day when it will need the world a bit less.”

May be worth noting that of those factory closures in Mainland China, most of the sizable ones were owned by firms in Hong Kong, Taiwan and South Korea. A distinction that was missed.

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