Updated 2023-04-04 4:31 PM
On March 5, 2023, the two sessions of the Communist Party of China were held, and the police stood guard at the southern end of Tiananmen Square. (Greg Baker/AFP)
[The Epoch Times, April 04, 2023] (Comprehensive report by
Epoch Times reporter Chen Ting) American economist Milton Ezrati (Milton
Ezrati) pointed out that the CCP is eager to
expand its power and wants to use every lever of power as soon as possible.
This approach has instead damaged the economy, making a large number of
companies ready to leave China.
He
emphasized that the " decoupling " that the U.S.
government has been talking about has clearly begun, and "mainly for
market reasons, not coercion by the U.S. or any other Western government."
Ezrati wrote in "Forbes" on Monday (April 3) that
( link ) the leadership of the Communist Party of
China has "shown an almost adolescent impatience" in recent
years, which is contrary to Chinese culture and quite "un-Chinese".
The "un-Chinese" behavior has shaken the economic foundation of
supporting the CCP.
When China began its economic rise in the late 1970s, Ezrati
said, the main draw was the ability to provide cheap, well-educated labor to
Western and Japanese companies.
"Even when China first joined the World Trade
Organization (WTO) in 2000, its average annual salary was only slightly higher
than 3% of the same level in the United States." The article pointed out
that such advantages have brought a lot of investment from the West and Japan.
But as the economy has developed, Chinese wages have risen
much faster than wages in other developed countries.
"By 2021, the last year for which complete data are
available, average wages in China will reach almost one-third of the equivalent
level in the United States," the article reads.
At this time, the increasingly tough policies of the CCP
have made the economy less attractive. For example, during the COVID-19
pandemic, Beijing blocked the export of critical supplies such as surgical
masks. This behavior has prompted Western and Japanese companies to
reassess the reliability of sourcing in China. Since then, the CCP’s
strict zero-clearing policy has further strengthened these concerns.
Ezrati said that while cheap labor and reliability have been
lost, dissatisfaction with the CCP's policies has continued to accumulate among
Western and Japanese companies. For example, Beijing requires any company
doing business in China to share technology and trade secrets with Chinese
partners, or to blatantly steal intellectual property.
However, the Chinese government still "shows no signs
of changing these practices" in the face of discontent from the
international community.
Ezrati also pointed out: "Beijing has also increasingly
resorted to other bullying and retaliatory actions. Despite Japan and the
Philippines' legitimate sovereignty claims, Beijing has ignored the findings of
the International Court of Justice and has been in the South China Sea and the East
China Sea. Maintain a naval presence."
In addition, China has frequently threatened to use force
against Taiwan and has used formal and informal means to retaliate against
South Korean business interests for the installation of the THAAD anti-missile system
by the South Korean government. Chinese authorities have also cut off wine
sales in Australia to punish the country for questioning the origins of the
COVID-19 pandemic. And similar retaliatory actions were taken against
Ericsson in Sweden, Lotte in South Korea, and all manufacturing in Lithuania
because of trade with Taiwan.
Ezrati noted that as the U.S., Europe and Japan begin to
respond to China’s bullying and retaliatory actions, businesses are
starting to worry about being drawn into a diplomatic row.
In several recent surveys by foreign chambers of commerce,
there has been a marked change in business attitudes.
Tony Danker, director general of the Confederation of
British Business and Industry (CBI), said every company he spoke to was
rethinking supply chains.
“Every company I’m talking to right now is
rethinking their supply chain,” he said, “because
they anticipate that our politicians will inevitably accelerate toward a
decoupled world from China . ”
Bettina Schoen-Behanzin, chairman of the Shanghai branch of
the European Chamber of Commerce in China, pointed out: "The only
predictable thing in China is its unpredictability, which is harmful to the
business environment."
According to a report by Willis Towers Watson, a
multinational insurance brokerage company, as many as 95% of multinational
companies are concerned about the risks of doing business in China, up from 62%
just two years ago.
Ezrati noted that a long list of high-profile companies have
moved on, or are seriously considering doing so.
Apple has scheduled AirPod Pro 2 production in
Vietnam. Samsung is preparing to move out of production capacity in
China. Volvo has resisted building a new factory in China and will build
one in Slovakia, and Adidas and other shoe and clothing makers have already
begun moving production to Vietnam and elsewhere. Japanese companies began
to bring some of their production back home from China.
"The list goes on and on," Ezrati wrote.
Responsible Editor: Ye Ziwei#
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