China won’t give up its state-led economic model, top trade negotiator Liu He says
Beijing plans to make its public sector ‘stronger, better and bigger’, vice-premier says in People’s Daily article.
As a tech firm, they've got the usual 10-15% preferential corporate tax rates (its 25% for “normal” firms), but the guy I met claimed they were not getting much else in government subsidies – less than 10% of revenues, he claimed. The big subsidies go to industrial robotics, he said. (And the factories installing equipment often get subsidies too)
That guy from China Robot said what everyone else in PRC tech says these days: we want the technology “in our own hands”. They're all parroting Party Secretary Xi on his “Our Own Rice Bowl” tour in Heilongjiang in September 2018. Xi started talking up the importance of grain self-sufficiency; “The Chinese people's rice bowl has to be held in our own hands at all times”, he declared
Paranoia about the West among the CCP elite is almost official policy. Beijing propaganda can't help itself; its always going back to the Opium War when British cannon made very short-work of Chinese coastal defenses.
Industrial policy is how the CCP builds the economic base upon which National Power can be built. I met a drone firm last year (no, not DJI) which was quietly establishing a subsidiary which would deal exclusively with the PLA. That would allow the main firm to IPO at some point, but keep any foreign contamination away from its military relationships. I'm sure this is not uncommon. Companies here jump over themselves to work with, and sell to, the security apparatus, since that is where the money is. And local governments love the free flow of funds associated with the tech pork barrel too.
China's Disruptive Industrial Strategy. For the uninitiated: Identify a key sector, throw massive, uncoordinated fiscal subsidies and government equity injections at it, seduce a weak foreign firm to share its technology and/or turn a blind eye to IP “borrowing”, sit happily by as loads of firms build a ton of capacity, panic a bit when prices collapse, allow the private firms dumb enough to have jumped in die, but bailout a few of half-decent state-backed firms. Now, wait for a few years as the survivors develop real expertise and a competitive low-end product, and subsidize their losses as they build up a genuine client base. From the low-end, up the value curve they fight. Patient state capital cushions them against failure. It does not guarantee success, but it guarantees a lot of chances to get things right.
http://credibletarget.net/notes/Robots
Unfair competition.