GE chief gives vent to frustration over China

June 29 (FT) — General Electric chief executive Jeff Immelt told Italian industrialists at a dinner on Wednesday that he was worried about the way Beijing was treating foreign companies. “I am not sure that in the end they want any of us to win or any of us to be successful,” said the man who runs the largest manufacturing company. “After 30 years of progressive market reforms, many foreign businesses in the country feel as though they have run up against an unexpected and impregnable blockade,” Joerg Wuttke, former head of the European Chamber of Commerce, complained in the Financial Times in April. The American Chamber of Commerce in Beijing has made similar statements, while a new survey of European companies released this week by the European Union Chamber of Commerce in China showed that almost half expect even more problems with regulators during the next two years.

GE has moved production out of China.

FDI (foreign direct investment) alters fx reserves and currency levels, as does domestic inflation.

6 Responses

  1. “General Electric chief executive Jeff Immelt told Italian industrialists at a dinner on Wednesday that he was worried about the way Beijing was treating foreign companies. “I am not sure that in the end they want any of us to win or any of us to be successful,” said the man who runs the largest manufacturing company. “After 30 years of progressive market reforms, many foreign businesses in the country feel as though they have run up against an unexpected and impregnable blockade”

    Gee, guys, what did you expect? It’s a communist country. It believes in state control of a lot of things. Did you think it was going to roll over, like some small developing nation craving foreign investment to enrich its elites? Or that it was going to cater to large corporations, like the U. S.? In the era of globalization and multinationals, China does not see itself as a market state, it sees itself as a player.

    1. Tom,
      Reagan would never have let this happen. Back in the 80’s I remember he used to tell our cold war allies the Japanese they had to stop at 1m cars. No laws or quotas, just a request from Reagan and they complied (this policy motivated the founding of the Acura and Lexus brands, and US factories for traditionally foreign brands imo) I believe Reagan had the support of big labor each time he ran and he used to meet with them. This seemed to have gone out with Bush I.

      Our current crop of GOP jarheads cant see this. its all “freemarket” all the time. Reagan is probably rolling over at our now $40B/mo (again) trade deficit and its effect on the US worker. Resp,

      1. Matt, Reagan was a former union president (SAG), so he understood labor. It is true that he and Tatcher knocked out the bargaining power of labor, which most people considered excessive at the time. That led eventually to the ascendency of finance capital as the new bully on the block. Now it is as unpopular as Big Labor was back then. The problem now is that productive investment has been replaced with rent-seeking as finance has diverted its attention from its traditional role of funding investment to rent-seeking and speculation rather than capital investment. The money in capital investment is no longer the the US but emerging countries, like China.

  2. “FDI (foreign direct investment) alters fx reserves and currency levels, as does domestic inflation.”

    To make sure I got this right, I own a company and open up a manufacturing facility in China. To do so I will need to convert my dollars to yuan, buy or build the facility and pay the workers in yuan. Therefore causing an influx of dollars to yuan and causing their currency to go up thus affecting fx reserves? I can see the hiring of the local population can spur domestic demand and thus inflation. Just little unclear on the first part.

    Thanks!

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