China’s controversial policy of forced joint ventures is making a comeback — this time as a cornerstone of the European Commission’s masterplan for reviving Europe’s industrial might.
Beijing went from a poor economy in the 1970s to a superpower by requiring foreign automakers and other companies to enter into partnerships with Chinese companies, giving them critical know-how and creating many of the supply chains that power its economy today.
Once a taboo spurned by European policymakers, the idea of imitating China’s success in growing into an industrial juggernaut is winning increasing acceptance as a catch-up strategy.
Now it’s being written into regulations with the Industrial Accelerator Act — a plan spearheaded by Industry Commissioner Stéphane Séjourné — mandating that foreign companies team up with domestic firms if they want to get access to the European market.
You mean they should look at a Top-Five economy, globally? A state whose economy is larger and more diverse than nearly every other country on the planet? That would be a great thing for Europe to do.
So. Requiring JV s was controversial?
I wonder why.
China weaponized JVs.
Forced Western “experts” to train Chinese who replaced those western experts.
Forced Western companies to give their trade secrets to Chinese companies.
China required Western companies to train local Chinese to the skillsets and develop Chinese expertise. Many Western experts are retired and or dead. Ie, the skills are in short supply in western countries.
China forced companies to give up trade secrets. China now openly uses those trade secrets and has innovated some.
The Chinese expertise and manufacturing prowess, gives China a competitive edge over western competition.
China continues weaponizing JVs in countries that “accept” it’s BRI debt trap loans. China loans yuan to build infrastructure and REQUIRES these countries to use the loans to hire Chinese workers to build the infrastructure.
Ie, the local country does NOT get a local workforce with skills.
The local country gets infrastructure that its own people do not have the skills to maintain.
This becomes a debt trap for that developing country.
These developing countries become vassal states to the Chinese hegemony.
China does NOT intend to promote other countries’ skilled workers or expertise.
European countries BETTER require JVs with Chinese, and require China to develop European experts and skills. Otherwise, they too will be vassals to the Chinese hegemony.
Rubbish. They weren’t forced. Western companies went into that situation eyes wide open, knowing what would happen, but also know the short term benefit to themselves was too much to pass up. When I was at Motorola in the late 90s they were starting to go down that path. I openly questioned why we would do this, knowing what would happen. “If we don’t, our competitor will”.
News today reports EU has made trade deal w India. Sort of like their own NAFTA. Low tariffs to encourage trade. Previously they made deals w Japan, Mexico, South America, and Indonesia. They see US as unreliable partner. Deal w China could be interesting. Other deals probably seek export potential to deal w imports from China.
