China makes it incredibly hard for foreign businesses to operate – but they stay because the money is just too good
Doing business in China can be a difficult and contentious proposition for companies in many countries. Yet even with charges of intellectual property theft, forced partnerships and tight restrictions on doing business, China continues to attract foreign capital. Why do businesses want to invest in China when there are so many other “business-friendly” countries and financial markets that support foreign investment?
The United States has accused China of stealing the intellectual property of American firms, theft that is estimated at US0 billion annually. As a precondition for doing business in China, American and other firms may be subjected to the forced transfer of their technology. In addition, regulations can require foreign investors to partner and set up a joint venture with a Chinese firm before they can do business in China.
In 2001, after becoming a member of the World Trade Organization, China promised to open up its banking, telecommunications and electronic payment processing sectors. But action in these areas has been nonexistent or, at best, half-hearted. The Chinese telecommunications industry, for example, remains under government control, and the government has barred Facebook and Google from offering their services in China.
What’s in it for investors
Doing Business 2020, a publication of the World Bank, ranks China – in terms of the availability of credit and the ease and magnitude of tax payments – 80th and 105th, respectively, out of 190 nations in the world. Using 10 other indicators, such as protection offered to minority investors, registering property and enforcing contracts, China ranks 31st out of 190 nations in the world for the overall ease of doing business. By contrast, the U.S. ranks 6th out of 190, according to the same report.
In addition, doing business in China can be politically risky. Negotiations with the Communist-led government can be difficult; it has a political system with a reputation for a lack of transparency and intolerance for dissent. The nation has significant rules about the inflows and outflows of capital that can change without public notice. Corruption is pervasive in China, which hurts foreign investors like the United States.
Despite these negative business conditions, according to the 2020 World Investment Report, in 2018 and 2019 China attracted a staggering 8 billion and 1 billion in foreign investment, respectively. Focusing on just 2019, this massive foreign investment into China exceeds the GDPs of entire nations such as Kuwait – 7 billion; Kenya – billion; and Venezuela – billion. In 2019, China was the world’s second largest recipient of foreign investment, second only to the United States.
Countries that play by the rules
Despite being relatively business-unfriendly, if the world’s 31st ranked nation can attract such large amounts of foreign investment, surely the world’s first ranked nation must be doing as well as China, if not better. But New Zealand, ranked first in the world for its business-friendly climate, doesn’t come close to China in terms of foreign investment.
On the two metrics – credit availability, which measures how easy it is to obtain credit; and tax payments, which measure the straightforwardness and the magnitude of tax payments made to the country where business is being done – New Zealand ranks 1st and 9th in the world. And for overall ease of doing business, by contrast to China’s 31st rank, New Zealand ranks first in the world.
Despite that honor, in 2018 and 2019 New Zealand
attracted only Military service members returning from America’s “forever” wars in Iraq and Afghanistan have often faced deeply personal questions about their experience. As one veteran explained to me: “I’ve been asked, ‘Have you ever killed anyone in war? Are you messed up at all?’” “I don’t take offense to any of that because I realize, we went somewhere, we were gone for a couple years, and now we’re back, and now no one knows how to talk to a person.” This sense of estrangement from the rest of the population is, in my experience, common among veterans. I interviewed 30 former military personnel between 2012 and 2018 for “After Combat: True War Stories from Iraq and Afghanistan” – a book I coauthored with retired Army Col. Michael Gibler, who served as an infantry officer for 28 years, including deployments to both Iraq and Afghanistan. 20 years after the 9/11 attacks and the start of the ensuing global war on terrorism, I believe that civilians would benefit from hearing veterans’ stories. It can help provide an understanding of the experience of mortality among the men and women who served in America’s name. Neither I nor my co-author asked veterans directly if they had killed, and every person we spoke with had a unique experience of combat. All 30 interviewees, aged between 20 and 55 and from a variety of different backgrounds, were guaranteed anonymity to allow them to talk freely with us about their experiences of killing in combat. Their names have been changed for this article. Killing in contemporary war rarely has the clarity of combat portrayed in war movies or video games, where the opponent is visible and threatening. In the fictional scenario, it is clear when a life is threatened and how to fight for the survival of oneself or one’s unit. “People think it’s like ‘Call of Duty,’” one veteran said, referring to the popular video game, or that “it’d be cool to do that.” However, even in a direct engagement, like an ambush, it may not be clear who you are shooting at – it could be a response to a muzzle flash in the distance or laying down covering fire, he explained. Describing an incident in which three men attacked his unit, one veteran, Beau, recalled the moral clarity he felt while shooting at a visible combatant. “I know that they’re bad because they’re shooting at me,” he said. But in other firefights, the situation was less clear, and as Beau explained, “For every innocent person that dies, that’s five more terrorists. I need to get this right.” Beau said he preferred to look an enemy combatant in the eye, even when his own life was in danger. He indicated that it confirmed his view that these were “bad” people intent on killing him first. Many recruits like Beau go into combat believing that killing is necessary in conditions of war and believing also that the wars in Afghanistan and Iraq were militarily and politically justified. But they are still changed by having killed. One soldier shot back from his guard post when under fire from a nearby house. His unit entered the house to find a dead man with a warm rifle. But the guard was discomfited when congratulated on this kill by fellow soldiers. To his comrades, he had acted in self-defense and protected others from the shooter. But even in this situation of militarily justified killing, he felt he had crossed a line by taking a life. Others expressed guilt for exposing civilians to danger. One veteran spoke of feeling responsible when a young informant was executed after providing crucial information to Americans. “We found out that the family that was living there told the Taliban that that little boy ratted them out,” Robin recalled. “I found this out two days later, that they executed the little boy that I chose to bring into that compound.” While some veterans return from having killed in combat without suffering moral injury or post-traumatic stress, others suffer enduring impacts of killing. Studies have shown that the act of killing in combat can cause “significant psychological distress” and is associated with elevated risks of PTSD, alcohol abuse and suicide in veterans. As former U.S. Army Lt. Col. David Grossman wrote in his book examining the psychological impact of killing, a “dead soldier takes his misery with him, the man who killed him must forever live and die with him.” Reuben can attest to that. He fired on a vehicle accelerating into an Iraqi checkpoint. As the vehicle approached the checkpoint, he shot into and stopped the advancing automobile. Approaching it to investigate, the unit saw he had killed the driver. But he had also “splattered his head all over the driver’s child. Six years old. He was sitting in the passenger seat. The fifty caliber does a number on the human body. The man’s head was just gone. It was everywhere.” Reuben has ruminated over that moment for many years, trying to reconcile how he had followed the standard protocol but with horrific results – and trying to convince himself, as he told us, that he is not a monster. Most civilians will never carry the burden of mortality that Reuben bears. As the 20th anniversary of the terrorist attacks of 9/11 and the inception of America’s global war on terror approached, the Biden administration withdrew the last remaining troops from Afghanistan. The military members returning from this conflict, and that in Iraq, will not all be traumatized by combat experience, and not all soldiers who deploy have killed. But those who have enter a moral space very few of us share or even particularly understand. [Get the best of The Conversation, every weekend. Sign up for our weekly newsletter.] This article is republished from The Conversation, a nonprofit news site dedicated to sharing ideas from academic experts. Read more:Looking the enemy in the eye
‘No monster’
Marian Eide does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.
