Citing anonymous sources, a recent Reuters report said that the US e-commerce giant Amazon, at China’s request two years ago, chose to disable the comments section for certain books in China, claiming that the company “complied” in order to “win favor in Beijing.”
Is Reuters “defending” Amazon, or taking a dig at it? The nation’s regulations on online book reviews are not specific to Amazon and enterprises of any nature must abide by them equally. Publishing houses, like companies in other industries, must abide by the laws and regulations of host countries when investing and conducting business abroad, without exception. This is simply common sense for international businesses.
The Chinese bookselling website set up jointly by Amazon and China National Publications Import and Export (Group) Co has been doing well and book sales is only a small part of Amazon’s business in China. As the world’s largest e-commerce company, Amazon recorded a revenue of $386 billion in 2020, right after Walmart and State Grid Corporation of China, with the Chinese market as a vital part of Amazon’s global businesses.
Amazon has set up delivery teams in 16 cities in China with 15 operation centers selling 20 million products in 32 categories. The company pioneered in logistics and timed delivery in the Chinese market, which, in turn, promotes innovation in the US market. Amazon’s business in China has undoubtedly achieved win-win results for the company and Chinese customers.
In recent years, some Western media outlets and individuals have been concocting conspiracy stories that multinationals are attempting to “win favor in China” or falling into “traps” set by China. They have smeared China’s long-term goal of attracting foreign investment saying that it is not to letting foreign companies win in the Chinese market and is taking away foreign capital and technology.
Such conspiracy stories hyping up “decoupling” are unsustainable. According to data from the National Bureau of Statistics, China’s total assets of industrial systems reached 109.39 trillion yuan ($17.1 trillion) in 2020, among which, state-owned enterprises recorded 50.46 trillion yuan ($7.9trillion), accounting for 45.8 percent. Private enterprises have a share of 31.55 percent and foreign companies 22.7 percent.
The state-controlled economy does not play a dominant role in general manufacturing sectors since it only accounts for 25 percent of the total assets of industrial systems after stripping state-owned and state-holding enterprises in sectors like coal, oil exploitation, electricity generation and other public facilities.
Taking US new energy vehicle giant Tesla as an example, it has made great achievements in China with 100 percent sole proprietorship. The car sales by the company reported a global revenue of $12.06 billion in the third quarter, accounting for 87.3 percent of the company’s total revenue and with a gross margin reaching as high as 30.5 percent. A vital reason behind such brilliant profit was the strong performance of its giga-factory in Shanghai which produced a total of 413,000 vehicles in the first 11 months of the year, nearly half of Tesla’s annual global production. When the Shanghai factory completes expansion next spring, it will produce more than 1 million vehicles a year.
Tesla is deploying its supply chain across the world, with Chinese market as a crucial part. The Chinese government has neither forced technology transfer from the company nor replaced it with state-owned enterprises. Not only does Tesla have sufficient operating space in China, but it has also gained more space in the global market and a more robust supply chain because of its Chinese factories.
Both the success of Amazon and Tesla in China demonstrate the success of China’s reform and opening-up as well as the improvement of its business environment. When the world was hit hard by blow of COVID-19 pandemic and economic recession which led to plummet cross-border direct investment, China was the only economy recording actual FDI growth.
China’s foreign investment reached $157.2 billion in the first 11 months, surging 21.4 percent year-on-year. Under such circumstances, multinational companies choosing to bet on the Chinese market will make the ill-intend conspiracy stories crumble.
The article was compiled based on a commentary written by He Weiwen, a senior research fellow from the Chongyang Institute for Financial Studies at the Renmin University. bizopinion@globaltimes.com.cn
Photo: VCG
