China's Best Weapon against the US is the the Chinese Government Procurement Program

lilzz

Banned Idiot
No, it's not the nuke weapons
No, it's not the new ships and submarines

No, it's not the ASBM

No, it's not the Missile interception Tech..

It has nothing to do with military...
Well, what is it then?

....

The answer is China's new program that curtail US firms under the Chinese Government Procurement Program.

It's call the "Indigenous Accreditation Program" Which is a new program by the Chinese government spells out that all Government level Procurement should go for products that has Chinese company IP.. Meaning Foreign firms that control the technology selling to the Chinese government will not work.
In order for foreign firms to qualify, it has to form JV with Chinese firms and apply for new set IP under CHinese laws in CHina.

Well, you think why don't US firms and other firms challenge CHina's new program in WTO. It can't because CHinese government purchasing never part of WTO, China knew it at the beginning, and withheld that when signed for WTO. Only the regular Consumer market be part of WTO, not the Government Procurement. They were pretty shrewd...

In all fairness, US has "buy Amercian " clause in its government stimulus program...

Anyway, US firms are jumping up and down over this, that Chinese Government Procuremnt Program is well over $ 87 Billion big pie.

First, all the foreign firms gathered up in CHina together wrote letters to Chinese government , complaining about the they were boxed out. but to no avail Chinese government ignored them..

US chamber of Commerce President in China Donahue said, "we going to raise hell on this issue"

Then The US firmed wrote letters to Obama admin and Obama was deeply disturbed by this.. Clinton and Locke spoke out against this...

Well, US knows the option is limited because this has no WTO backing...
Otherwise, US would take China over this quickly just like the Rare Mineral Export..

Some folks would say US would set up protectionist measures against Chinese goods to US.

But keep mind Most Chinese goods going to US are just normal consumer goods, rather low end..

CHinese Indeginous Program is set up to foster the high tech capiblity of Chinese Companies . US firms are fear once the Chinese high tech firms dominate the chinese market , then that would be Bad news.. Kind of like what huawei was doing... If Chinese hightech firms dominate in CHina then they can go outward after that... On top of that, that huge Governemtn Procurement Pie they are missing.

I have keep track of related news quite a bit.....

By far this has create the deepest disturbances in the US circle.
US react to this far more than anything I have seen.. If CHina set up some tariffs against importing US products like cars, like agriculture , US doesn't care.. No big deal..

But CHinese government fostering Domestic high tech firms in CHina has strike deep fear for US..

And the Chinese Government Procurement program , not under the binding of WTO, has became a weapon against the interests of the US.
 

pla101prc

Senior Member
Re: China's "strongest weapon" against US, it creates by far deepest disturbance.

this thread will prolly be closed once popeye sees it

but technically governments are buyers and they have the right to choose whatever they wanna buy...so yeah you cant say anything if the customer doesnt want your stuff.
 

bd popeye

The Last Jedi
VIP Professional
Re: China's "strongest weapon" against US, it creates by far deepest disturbance.

this thread will prolly be closed once popeye sees it

Nope..I may re-name it but it looks pretty interesting. I'll see how it goes..

mod note >>> We shall see how this goes as far as politics are concerned.

Stay on an economic track of discussion and this thread should be fine..


bd popeye super moderator
 
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lilzz

Banned Idiot
Re: China's "strongest weapon" against US, it creates by far deepest disturbance.

but technically governments are buyers and they have the right to choose whatever they wanna buy...so yeah you cant say anything if the customer doesnt want your stuff.

Well, the taking of CHina to WTO over rare earth export by EU, US and Mexcio doesn't make sense either.

WTO deals with restricting foreign goods into the domestic market. Technically it shouldn't be about whether a country wants to export certain things.

I guess, anything goes if one in the global power position. If certain things hurting its interests then anything goes..

Many countries have no fear over Chinese weapons but they are fear and afraid if they lose out in the Chinese market.

Even the recent Google case is motivated by Google wanting to have bigger share of Chinese market but the filter has it uncompetitive against Baidu. Therefore Google used this threat card to get US help and hope the Chinese government to relent but it doens't look like. Google might backpeddle on this...
 
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lcloo

Captain
Re: China's Best Weapon against the US is the the Chinese Government Procurement Pro

One specific action by China could be anti-price tranfer measures. Price transfer is business transaction practice between two companies within the same group but located in different countries. The aim is to pay less tax to the country that imposed higher tax rates, example GXX USA Corp sold a gadget at 90% profit to GXX China Corp (and pay tax on the 90% profit in USA and keep the profit money in USA), GXX China Corp sell to end customer at 10% profit (and pay tax on this 10% profit to PRC and spend the money on upkeep in China), and this practice has been legislated as illegal in many countries.

Many foreign companies probably are doing this because of higher tax rate in China, if China will to impose such law and decided to take a hard measure and impose penalty like what the anti-dumping tax imposed by USA and EU, the result will be hard on certain companies that China decided to investigate.
 

tphuang

Lieutenant General
Staff member
Super Moderator
VIP Professional
Registered Member
Re: China's Best Weapon against the US is the the Chinese Government Procurement Pro

They already have a de facto "buy-China" purchasing program and it's pissing off a lot of countries in the West. This kind of stuff is just childish and really does not help anyone. Recently, they dropped the 70% localization requirements on wind power and they should keep doing that. Trading with rest of the world has helped China more than any nations out there. They need to do things to defuse trade tension rather than increasing them.
 

ravenshield936

Banned Idiot
Re: China's Best Weapon against the US is the the Chinese Government Procurement Pro

They already have a de facto "buy-China" purchasing program and it's pissing off a lot of countries in the West. This kind of stuff is just childish and really does not help anyone. Recently, they dropped the 70% localization requirements on wind power and they should keep doing that. Trading with rest of the world has helped China more than any nations out there. They need to do things to defuse trade tension rather than increasing them.

indeed but what china tries to achieve is to strengthen its domestic market. by providing more protection for domestic businesses, this provide an even better environment for domestic businesses and people to find jobs and develop the industries.

china can't rely on imports forever

a strong domestic economy and modernized industry provides an optimal well-being for china to be
 

lilzz

Banned Idiot
Re: China's Best Weapon against the US is the the Chinese Government Procurement Pro

They already have a de facto "buy-China" purchasing program and it's pissing off a lot of countries in the West. This kind of stuff is just childish and really does not help anyone. Recently, they dropped the 70% localization requirements on wind power and they should keep doing that. Trading with rest of the world has helped China more than any nations out there. They need to do things to defuse trade tension rather than increasing them.

Yes, the same countries that got pissed about Chinese moves are also the ones setting up alot of protectionist moves against China. I guess they want the best of both ends.

the world has called on CHina to change its economic policy from export to domestic driven.

Less export means CHina has to increase its domestic value shares offset lost from export.

Less trading and more internal development.
 
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