The China Game -- The Oh Sh*t Phase
Sometimes you have to go native to understand
Yes, China did not build their digital and tech infrastructure…..the US, European, and Asian companies created the current digital and technology infrastructure for China. Foreign tech was imbedded, then rebranded into China’s top tech infrastructure companies like Huawei, ZTE, Alibaba, Tencent, Netease, Baidu. These relationships pitted foreign companies against one another for the benefit of the Belt and Road.
Yes, the highest flat tax in China for individuals is 45%. If you are a US Citizen working as a Local Hired Foreign National(LHFN) in China, you can claim foreign tax credits back to the US. Since 45% is higher than most people pay in taxes in the US, the US will refund you US dollars for taxes you paid to the CCP. Think about that….the USG refunds US Citizens working in China who paid taxes to the CCP.
Yes, the venture capital market in China is controlled by the CCP. As long as there is a one party system, you will not have a competitive venture landscape inside of China.
Yes, TikTok is a weaponized data scrapping tool which can be used in nefarious ways.
Yes, kidnappings and people go missing in China for not following the party line or getting in the way of illicit money flows.
Yes, The RMB is not a global convertible currency. You can send money in, but it’s hard to get it out without the fapiao and chops!
Yes, the current China economy would collapse if they had a open, convertible currency. The current strategy is a dual circulation model which insulates and protects the middle kingdom.
Yes, the US stock exchanges still have over 280 Chinese companies listed with different reporting and governance rules than US based companies. The investors of these companies are state pension funds, educational systems and passive investors through big funds. Even if you received the financials from these companies, they would be unverified, manipulated, or unreliable.
Yes, the CCP works through layers of shell companies, complex capital flows through foreign countries which invest in storage facilities, land, venture funds and companies across the world. These provide influence and agency for state planning.
Yes, you cannot own land in China. They are 50 year leases back to the government. Since we have not reached the 50 year mark for most of the modern money flows, we are yet to see what happens. Leases get broken all the time.
Yes, a VAT (Value Added Tax) is collected for imports of foreign goods. Up to 13%. Foreign companies enter the market at a double digit disadvantage for goods and services.
Yes, you have to notify the government if you have group gatherings over a certain number. They are considered assemblies, processions or demonstrations. This includes Girl Scout meetings, AA meetings and town halls at companies. All of them!
Yes, foreign companies have to pay “union fees” to the All-China Federation of trade Unions (ACFTC). I guess workers have rights……if we let them!!!
Yes, China local governments incentivize foreign executives through Chinese tax credits on local RMB salaries. In some cases, this allows foreign executives to live tax free in the country.
Yes, state, local and federal agencies are targets for clandestine work. Some are decades in the making.
Yes, honey pots, drugs and money are used to influence business and policy makers inside and outside of China.
Yes, Huawei CEO Ren Zhengfei asked Michael Dell to buy them in 2006 in Shenzhen.
Yes, multinational companies bidding for contracts in China had to develop corporate espionage counter intelligence tactics to deceive, compete and out maneuver. Ultimately, it came down to who was getting paid……
Yes, the Triads are the muscle behind the enforcement of the non-compliant inside and outside of China. These snakeheads find their way everywhere.
Yes, the US competitive advantage is our free innovative markets, human talent and open currency.
Pick up a copy here…..
Laowai is slang for foreigner in China. Sometimes you have to go native…..
Enjoy….Tyler
