A very intriguing Web cast overall, though it also seems useful to disentangle several different arguments, here. Two arguments in this presentation are especially compelling. First, that China has little or no need for foreign capital at this stage. Second, that there is a tendency to understate the degree of local competition foreign multinationals will continue to face in China. Both these arguments are likely to prevail well into the future, regardless of how fast state capitalism evolves in China, as it almost likely will, towards greater roles for private shareholders and consumers.

Re: Dr. Zhen Ye’s query herein, I refer him to the relationship between the Japanese governmental ministries and Japanese industrial leaders (both factories and sogoshosha) in promoting policies and administering Japanese industrial development in the 1950s-1970s. There is much written on the subject. As an authoritarian regime, Chinese central, provincial, and municipal planners exercise at least as much, if not, greater power to influence, if not outright direct, domestic industries’ policy and management.

China has never craved “cash” but technology. Always. And ‘development’, which [Amartya Sen calls ‘freedom’ 1999] is the ultimate driver, not ‘political insecurities’. Nevertheless, Mr Bremmer’s observation about ‘state capitalism’ is fair. However, isn’t the state also a big presence in western democracies? The recent economic crisis demonstrates the fragility of the so-called free market and the necessity of state regulation and guidance. It is difficult to diferentiate China’s SOEs and sovereign funds on the one hand and the US’s bailout mechanisms—except in name!

A very clear view of the situation. The challenge for us, politically and economically, is rising as China authorizes the investment of billions of its foreign reserves, via Chinese corporate bodies, back into the US and other economies via corporate participation. The ways our corporations’ Boards of Directors will set policy to handle such investment, which at its core has ulterior motives beyond profit-making in the short-term, may well constitute a new chapter in the history of American capitalism and our corporation law. An evolution is sure to occur, and the long-term direction is anything but clear.

Is there a definition gone missing? What is ‘state’? At which level does the state play the roles described? How does an undefined, collective entity—the ‘state’—play with the multinational?

I perfectly agree with Mr. Bremmer, China does not need any more cash for sure, but personally I think not even technology. Huawei, if it is, will not remain the only example of an advanced Chinese high-tech company. China does not need to wait for a Western company to bring technology there, China has enough liquidity and power to “shop in the West”.

What can’t sustain the Chinese growth any longer is the missing democracy. Think about the key role that an employee plays in an organization—nowadays everybody recognizes the importance of the workforce. At the national level it is the same, China can’t continue growing without giving the right value to its citizens.

Economic growth will see China playing a key role in the world economic balance, but I personally believe that other governments can’t accept this scenario until China becomes an open society.

I must admit I found this piece very alarmist though I understand and agree that this picture may be true for certain sectors/industries.

In sectors where countries like China and India will provide most of the sales growth potential and future consumption, companies do not have any choice but to participate, even if it means running the risk of losing some IP.

Saturation in Western European/OECD markets means there will always be somebody willing (or desperate!!) to share knowledge and technology. The sale of auto companies is a case in point.

As China builds up a vested interest in proper IP protection (e.g. Huawei may now be reaching), it will gradually adopt the right standards.

Let’s not forget that it took many decades for IP protection infrastructure to be adopted widely.

An excellent Web cast providing a lucid, balanced, and a realistic commentary on China. It highlights the reasons behind our organisation’s decision not to set up an office in China, but rather to support the Chinese assignment by assignment as their needs arise. In other words, when they recognise they do not possess the knowledge, skills, and resources to satisfy a customers needs.