We want this week to return to history and look globally to see what CLINTON/BUSH/OBAMA have been building overseas in Foreign Economic Zones to understand what they have been building in US cities deemed Foreign Economic Zones----as regards GLOBAL LABOR---US LABOR.
We see already the installation of TRUMP is bringing the end of minimum wage----the expansion of immigrant labor pool-----and leadership that praises global labor for simply being satisfied with a meal and a bed-----Obama's cabinet was filled with the same global Wall Street players---no difference from what Trump is doing. Trump of course is breaking down more of US governance structure by installing his own family into government---what all third world dictatorship structures do! That is who is filling all our US governance positions --the global 1% and their 2%!
THE US CONSTITUTION AND FEDERAL LAWS----FEDERAL COURT PRECEDENCE AND OUR FOUNDING FATHERS CREATING OUR GOVERNANCE WROTE POLICY TO STOP JUST THIS----AND ALL THAT WAS SIMPLY IGNORED CLINTON/BUSH/OBAMA.
Below we see absolutely no global labor pool citizen whether in the US or overseas BELIEVES THERE ARE HUMAN RIGHTS AND LABOR PROTECTIONS because all these have been ignored by the same global Wall Street 1% and their 2% these several decades that is why Vietnam's 99% ----Malaysia's 99%----Brunei's 99%-----China and Singapore's 99% have mass protests against TRANS PACIFIC TRADE PACT ---THEY KNOW IT IS ALL BOGUS.
'The Obama administration is hoping that the accord’s labor protections, along with separate bilateral agreements on labor and human rights between the United States and Vietnam, Malaysia and Brunei, will help persuade some Democrats to back the deal'.
Trans-Pacific Partnership Text Released, Waving Green Flag for Debate
By JACKIE CALMESNOV. 5, 2015
Workers at a garment factory in southern Vietnam. Credit Aaron Joel Santos for The New York Times
WASHINGTON — The release on Thursday of the full text of President Obama’s trade accord with 11 Pacific Rim nations brought out opponents and supporters and officially opened what may be the last big battle of the president’s tenure: winning congressional approval of the largest regional trade deal in history.
The opposition mainly came from the left, as an array of unions, environmental groups and public advocacy organizations that typically resist global trade agreements registered their dismay. But some businesses, like Ford Motor, also joined the emerging resistance to the Trans-Pacific Partnership.
The reaction confirmed that in this final fight, Mr. Obama will have to rely on the Republicans who control Congress if he is to sell the legacy-making agreement in the months before the House and Senate vote next spring. Republican leaders were withholding endorsements for now, leaving the president to make the case on his own.
Mr. Obama immediately sought to do so. Early Thursday, the White House posted the text of the deal on Medium, a social media sharing website, along with the president’s statement hailing the agreement as a “new type of trade deal that puts American workers first.”
The accord ties together countries from Canada to Chile and Japan to Australia that account for 40 percent of the world’s economy. While the 12 nations’ trade ministers concluded the agreement a month ago, after years of negotiations, Mr. Obama said that the disclosure of the details now should build support. He cited the agreement’s labor and environmental protections, the end of many tariffs and trade barriers among the countries, and expanded markets for American goods and services.
“It eliminates 18,000 taxes that various countries put on American goods,” Mr. Obama said. “That will boost Made-in-America exports abroad while supporting higher-paying jobs right here at home. And that’s going to help our economy grow.”
He cited the strategic as well as economic advantages of a trade alliance that would counter a rising China, which is not a party to the agreement.
“When it comes to Asia, one of the world’s fastest-growing regions, the rule book is up for grabs. And if we don’t pass this agreement — if America doesn’t write those rules — then countries like China will,” Mr. Obama said. “And that would only threaten American jobs and workers and undermine American leadership around the world.”
The president’s post on Medium came hours after the United States trade representative first released the 30 chapters, side agreements and other attachments that make up the voluminous accord in the middle of the night, simultaneous with other nations doing so.
Also on Thursday, he officially notified Congress of his intent to sign the agreement in 90 days, a period specified by law to give the House and Senate time to begin deliberating over its terms. Congress has additional time beyond that to debate and vote on legislation to enact the agreement.
Final action is expected by perhaps May, ensuring that Congress’s debate will occur against the backdrop of a presidential campaign in which leading candidates of both parties already have gone on record against the accord.
Senator Bernie Sanders of Vermont, who is challenging Hillary Rodham Clinton for the Democrats’ nomination, said the trade text was proof that the accord “is even worse than I thought” — a threat to American jobs, food and product safety and access to affordable drugs, for the benefit of international corporations and third-world countries.
The United States trade representative, Michael B. Froman, left, greeting the Vietnamese minister of industry and trade, Vu Huy Hoang, at the close of negotiations on the Trans-Pacific Partnership agreement last month in Atlanta. Credit Erik S. Lesser/European Pressphoto Agency
Without naming Mrs. Clinton, who last month announced her opposition to the agreement, Mr. Sanders summoned the phrase she once used as secretary of state to hail the emerging Pacific accord. “It is clear to me that the proposed pact is not, nor has it ever been, the gold standard of trade agreements,” Mr. Sanders said.
The agreement also must be approved in the other 11 nations. Besides Chile, Canada, Japan and Australia, they are Mexico, Peru, New Zealand, Singapore, Vietnam, Malaysia and Brunei.
The Obama administration is hoping that the accord’s labor protections, along with separate bilateral agreements on labor and human rights between the United States and Vietnam, Malaysia and Brunei, will help persuade some Democrats to back the deal. The administration is especially eager to promote its agreement with Vietnam, which commits its communist government to change its laws to allow workers to freely unionize and to strike, not just for better wages and hours but also for improved working conditions and other rights.
“Without reservation, I think this is the best opportunity we’ve had in years to encourage deep institutional reform in Vietnam that will advance human rights, and it will only happen if T.P.P. is approved,” Tom Malinowski, the assistant secretary of state for democracy, human rights and labor, said in an interview.
The organization where Mr. Malinowski formerly worked, Human Rights Watch, is among the skeptics who say Vietnam’s commitments are unenforceable, especially given the track record of the United States trade office. John Sifton, the group’s Asia advocacy director, said workers should have been given the same right that corporations have under this trade agreement and others: to take complaints about a country’s compliance directly to a dispute settlement panel.
“Are trade unionists who actually produce all the capital that we’re talking about here allowed to bring complaints against a country for violations?” he asked. “No, of course not.”
For the first time as part of a trade accord, the Pacific partners agreed in a “joint declaration” to avoid manipulating the value of their currencies for trade advantage, to report interventions in foreign exchange markets and to meet annually to hold one another accountable. The language did not persuade some Democrats — or Ford, which broke with other big businesses supporting the agreement — that it would prevent Japan and other countries from intervening to underprice their exports unfairly.
The annual currency forum “does nothing to change the status quo,” Ford said in a statement, adding, “It fails to include dispute settlement mechanisms to ensure global rules prohibiting currency manipulation are enforced.”
While the Obama administration played up environmental standards included in the accord as precedent-setting, the Sierra Club and the Natural Resources Defense Council were among groups that came out in opposition, calling the language weaker than in trade pacts negotiated during the George W. Bush administration.
Other advocacy groups, including Doctors Without Borders, cited language that would give pharmaceutical companies up to eight years of intellectual property protections before their data is available for production of lower-cost generic drugs.
That has put the administration in a bind: Those protections, while too long for health care advocacy groups, are shorter than the 12 years the big drug companies currently enjoy. That has angered drug company allies in Congress, especially Senator Orrin G. Hatch of Utah, the chairman of the Senate Finance Committee, which has jurisdiction over trade. Without Mr. Hatch’s support, Senate approval could be impossible.
The senator was noncommittal on Thursday, promising only a “rigorous review” of the pact. Also staying neutral was the new House speaker, Representative Paul D. Ryan of Wisconsin.
“We do not rubber-stamp anything around here, let alone trade agreements,” Mr. Ryan told reporters at the Capitol.
The global 1% and their 2% had to disrupt global citizens' ability to live independently and with dignity to create a desperation for employment. In Asia and Latin America under CLINTON/BUSH/OBAMA that came with GLOBAL BIG AG-----THE GREEN REVOLUTION-----taking small farms and breaking down rural and city economies----in the US it was shipping all US corporations overseas to these same Asian and Latin American nations leaving US citizens with growing unemployment and deepening impoverishment all to make them desperate for any employment. THIS WAS A TEAM GLOBAL 1% AND THEIR 2% WORKING TOGETHER TO CREATE THESE ONE WORLD ONE GOVERNANCE FOREIGN ECONOMIC ZONES knowing that these MASTER PLANS would come back to US cities deemed Foreign Economic Zones. When did Congress pass laws designating US cities Foreign Economic Zones? Same time they broke GLASS STEAGALL TO CREATE GLOBAL WALL STREET AND EXTREME WEALTH AND EXTREME POVERTY----the ROBBER BARON POLS!
While Americans were experiencing CLINTON/BUSH/OBAMA with Clinton neo-liberal economics having the US FED and Wall Street create massive frauds and bubble and burst economies to move all US wealth to the top 1% and their 2%----Asian and Latin American 1% and their 2% were moving their 99% of citizens into these global corporate campuses and global factories----leaving rural Asians too poor to support themselves ----ERGO THE NEED FOR GLOBAL LABOR POOL CITIZENS TO KEEP WORKING OVERSEAS.
WHAT IS HAPPENING IN THE US THESE FEW DECADES AND THE COMING ECONOMIC CRASH FROM MASSIVE BOND MARKET FRAUD WILL MAKE WORSE? THIS SAME DYNAMIC---99% OF AMERICANS ARE LOSING THE ABILITY TO HAVE PERMANENT STABLE JOBS.
There is no need for massive urbanization----global Wall Street is simply not allowing any other local economies to develop or exist.
Remember, global Wall Street and global IVY LEAGUES created these policies and sold them to the global 1% and their 2%----so today's Congress, statehouses, city halls filled with global Wall Street players are not going to do anything different. MOVING FORWARD BECOMES THE GREAT LEAP FORWARD FOR CHINA.
Leaving the Land
China’s Great Uprooting: Moving 250 Million Into Cities
Articles in this series look at how China's government-driven effort to push the population to towns and cities is reshaping a nation that for millenniums has been defined by its rural life.
By IAN JOHNSON
June 15, 2013 BEIJING — China is pushing ahead with a sweeping plan to move 250 million rural residents into newly constructed towns and cities over the next dozen years — a transformative event that could set off a new wave of growth or saddle the country with problems for generations to come.
The government, often by fiat, is replacing small rural homes with high-rises, paving over vast swaths of farmland and drastically altering the lives of rural dwellers. So large is the scale that the number of brand-new Chinese city dwellers will approach the total urban population of the United States — in a country already bursting with megacities.
This will decisively change the character of China, where the Communist Party insisted for decades that most peasants, even those working in cities, remain tied to their tiny plots of land to ensure political and economic stability. Now, the party has shifted priorities, mainly to find a new source of growth for a slowing economy that depends increasingly on a consuming class of city dwellers.
The shift is occurring so quickly, and the potential costs are so high, that some fear rural China is once again the site of radical social engineering. Over the past decades, the Communist Party has flip-flopped on peasants’ rights to use land: giving small plots to farm during 1950s land reform, collectivizing a few years later, restoring rights at the start of the reform era and now trying to obliterate small landholders.
Across China, bulldozers are leveling villages that date to long-ago dynasties. Towers now sprout skyward from dusty plains and verdant hillsides. New urban schools and hospitals offer modern services, but often at the expense of the torn-down temples and open-air theaters of the countryside.
“It’s a new world for us in the city,” said Tian Wei, 43, a former wheat farmer in the northern province of Hebei, who now works as a night watchman at a factory. “All my life I’ve worked with my hands in the fields; do I have the educational level to keep up with the city people?”
China has long been home to both some of the world’s tiniest villages and its most congested, polluted examples of urban sprawl. The ultimate goal of the government’s modernization plan is to fully integrate 70 percent of the country’s population, or roughly 900 million people, into city living by 2025. Currently, only half that number are.
The building frenzy is on display in places like Liaocheng, which grew up as an entrepôt for local wheat farmers in the North China Plain. It is now ringed by scores of 20-story towers housing now-landless farmers who have been thrust into city life. Many are giddy at their new lives — they received the apartments free, plus tens of thousands of dollars for their land — but others are uncertain about what they will do when the money runs out.
Aggressive state spending is planned on new roads, hospitals, schools, community centers — which could cost upward of $600 billion a year, according to economists’ estimates. In addition, vast sums will be needed to pay for the education, health care and pensions of the ex-farmers.
While the economic fortunes of many have improved in the mass move to cities, unemployment and other social woes have also followed the enormous dislocation. Some young people feel lucky to have jobs that pay survival wages of about $150 a month; others wile away their days in pool halls and video-game arcades.
Top-down efforts to quickly transform entire societies have often come to grief, and urbanization has already proven one of the most wrenching changes in China’s 35 years of economic transition. Land disputes account for thousands of protests each year, including dozens of cases in recent years in which people have set themselves aflame rather than relocate.
The country’s new prime minister, Li Keqiang, indicated at his inaugural news conference in March that urbanization was one of his top priorities. He also cautioned, however, that it would require a series of accompanying legal changes “to overcome various problems in the course of urbanization.”
Some of these problems could include chronic urban unemployment if jobs are not available, and more protests from skeptical farmers unwilling to move. Instead of creating wealth, urbanization could result in a permanent underclass in big Chinese cities and the destruction of a rural culture and religion.
The government has been pledging a comprehensive urbanization plan for more than two years now. It was originally to have been presented at the National People’s Congress in March, but various concerns delayed that, according to people close to the government. Some of them include the challenge of financing the effort, of coordinating among the various ministries and of balancing the rights of farmers, whose land has increasingly been taken forcibly for urban projects.
These worries delayed a high-level conference to formalize the plan this month. The plan has now been delayed until the fall, government advisers say. Central leaders are said to be concerned that spending will lead to inflation and bad debt.
Such concerns may have been behind the call in a recent government report for farmers’ property rights to be protected. Released in March, the report said China must “guarantee farmers’ property rights and interests.” Land would remain owned by the state, though, so farmers would not have ownership rights even under the new blueprint.
On the ground, however, the new wave of urbanization is well under way. Almost every province has large-scale programs to move farmers into housing towers, with the farmers’ plots then given to corporations or municipalities to manage. Efforts have been made to improve the attractiveness of urban life, but the farmers caught up in the programs typically have no choice but to leave their land.
The broad trend began decades ago. In the early 1980s, about 80 percent of Chinese lived in the countryside versus 47 percent today, plus an additional 17 percent that works in cities but is classified as rural. The idea is to speed up this process and achieve an urbanized China much faster than would occur organically.
The primary motivation for the urbanization push is to change China’s economic structure, with growth based on domestic demand for products instead of relying so much on export. In theory, new urbanites mean vast new opportunities for construction companies, public transportation, utilities and appliance makers, and a break from the cycle of farmers consuming only what they produce. “If half of China’s population starts consuming, growth is inevitable,” said Li Xiangyang, vice director of the Institute of World Economics and Politics, part of a government research institute. “Right now they are living in rural areas where they do not consume.”
Skeptics say the government’s headlong rush to urbanize is driven by a vision of modernity that has failed elsewhere. In Brazil and Mexico, urbanization was also seen as a way to bolster economic growth. But among the results were the expansion of slums and of a stubborn unemployed underclass, according to experts.
“There’s this feeling that we have to modernize, we have to urbanize and this is our national-development strategy,” said Gao Yu, China country director for the Landesa Rural Development Institute, based in Seattle. Referring to the disastrous Maoist campaign to industrialize overnight, he added, “It’s almost like another Great Leap Forward.”
The costs of this top-down approach can be steep. In one survey by Landesa in 2011, 43 percent of Chinese villagers said government officials had taken or tried to take their land. That is up from 29 percent in a 2008 survey.
“In a lot of cases in China, urbanization is the process of local government driving farmers into buildings while grabbing their land,” said Li Dun, a professor of public policy at Tsinghua University in Beijing.
Farmers are often unwilling to leave the land because of the lack of job opportunities in the new towns. Working in a factory is sometimes an option, but most jobs are far from the newly built towns. And even if farmers do get jobs in factories, most lose them when they hit age 45 or 50, since employers generally want younger, nimbler workers.
“For old people like us, there’s nothing to do anymore,” said He Shifang, 45, a farmer from the city of Ankang in Shaanxi Province who was relocated from her family’s farm in the mountains. “Up in the mountains we worked all the time. We had pigs and chickens. Here we just sit around and people play mah-jongg.”
Some farmers who have given up their land say that when they come back home for good around this age, they have no farm to tend and thus no income. Most are still excluded from national pension plans, putting pressure on relatives to provide.
The coming urbanization plan would aim to solve this by giving farmers a permanent stream of income from the land they lost. Besides a flat payout when they moved, they would receive a form of shares in their former land that would pay the equivalent of dividends over a period of decades to make sure they did not end up indigent.
This has been tried experimentally, with mixed results. Outside the city of Chengdu, some farmers said they received nothing when their land was taken to build a road, leading to daily confrontations with construction crews and the police since the beginning of this year.
But south of Chengdu in Shuangliu County, farmers who gave up their land for an experimental strawberry farm run by a county-owned company said they receive an annual payment equivalent to the price of 2,000 pounds of grain plus the chance to earn about $8 a day working on the new plantation.
“I think it’s O.K., this deal,” said Huang Zifeng, 62, a farmer in the village of Paomageng who gave up his land to work on the plantation. “It’s more stable than farming your own land.”
Financing the investment needed to start such projects is a central sticking point. Chinese economists say that the cost does not have to be completely borne by the government — because once farmers start working in city jobs, they will start paying taxes and contributing to social welfare programs.
China issues different permits to urban and rural residents. Rural residents who move to cities without city permits do not have access to public services. If the Chinese government starts to provide services to migrants, spending is projected to go up by 1.5 trillion renminbi per year, or 2.5 percent of urban G.D.P. by 2025.
“Urbanization can launch a process of value creation,” said Xiang Songzuo, chief economist with the Agricultural Bank of China and a deputy director of the International Monetary Institute at Renmin University.
“It should start a huge flow of revenues.”
Even if this is true, the government will still need significant resources to get the programs started. Currently, local governments have limited revenues and most rely on selling land to pay for expenses — an unsustainable practice in the long run. Banks are also increasingly unwilling to lend money to big infrastructure projects, Mr. Xiang said, because many banks are now listed companies and have to satisfy investors’ requirements.
“Local governments are already struggling to provide benefits to local people, so why would they want to extend this to migrant workers?” said Tom Miller, a Beijing-based author of a new book on urbanization in China, “China’s Urban Billion.” “It is essential for the central government to step in and provide funding for this.”
In theory, local governments could be allowed to issue bonds, but with no reliable system of rating or selling bonds, this is unlikely in the near term. Some localities, however, are already experimenting with programs to pay for at least the infrastructure by involving private investors or large state-owned enterprises that provide seed financing.
Most of the costs are borne by local governments. But they rely mostly on central government transfer payments or land sales, and without their own revenue streams they are unwilling to allow newly arrived rural residents to attend local schools or benefit from health care programs. This is reflected in the fact that China officially has a 53 percent rate of urbanization, but only about 35 percent of the population is in possession of an urban residency permit, or hukou. This is the document that permits a person to register in local schools or qualify for local medical programs.
The new blueprint to be unveiled this year is supposed to break this logjam by guaranteeing some central-government support for such programs, according to economists who advise the government. But the exact formulas are still unclear. Granting full urban benefits to 70 percent of the population by 2025 would mean doubling the rate of those in urban welfare programs.
“Urbanization is in China’s future, but China’s rural population lags behind in enjoying the benefits of economic development,” said Li Shuguang, professor at the China University of Political Science and Law. “The rural population deserves the same benefits and rights city folks enjoy.”
What do we have in US cities allowed to decay------citizens captured by the need of FOOD STAMPS AND FEED THE CITY GLOBAL HEDGE FUND CHARITY--------that is what has hit Asian and Latin American citizens from these same policies-----forcing them into global labor Foreign Economic Zone structures that are enslaving.
'Skeptics say the government’s headlong rush to urbanize is driven by a vision of modernity that has failed elsewhere. In Brazil and Mexico, urbanization was also seen as a way to bolster economic growth. But among the results were the expansion of slums and of a stubborn unemployed underclass, according to experts'.
As a lifelong city-dweller I am not being anti-city----I'm being anti-GLOBAL WALL STREET FOREIGN ECONOMIC ZONE city. There is a difference between our US cities in modern times and today's movement to global rich cosmopolitan cities taking all our US cities---mid-size and smaller cities.
The American people were taught decades ago in public schools and universities that the US civil war was a battle of AGRICULTURAL SOUTH VS INDUSTRIAL NORTH.....think of these Asian and Latin American nations moving their citizens from agricultural areas into cities ---what replaced the agricultural south-----BIG AG----THEN BECOMING GLOBAL BIG AG---controlling all nations' food sources. That is what has happened these few decades of CLINTON/BUSH/OBAMA overseas. So, the US northern industrialists wanted all that southern labor for their growing industry labor----and we saw that great migration from south to north filling our US cities----SOUND LIKE WHAT CHINA ET AL HAVE BEEN DOING THESE FEW DECADES? Same thing. Flash forward a century to CLINTON/BUSH/OBAMA----taking a thriving US industrial economy and breaking it down by sending US corporations overseas----EMPIRE-BUILDING. American workers were completely reliant on those corporations for most of our jobs and VOILA----MASS UNEMPLOYMENT HAS US WORKERS FEARFUL OF SAYING, DOING ANYTHING ----TAKING ANY POLICIES INSTALLED ALL TO KEEP A JOB TO FEED A FAMILY.
Same thing happening in Asian and Latin American nations so building global MEGA-CITIES harms GLOBAL 99%---and empowers global 1% and their 2%.
Industry vs Agriculture: The Economics Leading to the Civil War
Extracts from this document...
Patrick Finnegan February 9, 2010
Industry vs Agriculture: The Economics Leading to the Civil War 1.
Opening Statement (Emily Boney) The basis of this argument is founded upon the fact that Northern states (The Union) was an industrial society and supported tariffs on imported goods from Europe because they wanted Americans to buy goods made in the United States. The Southern culture, however, was to buy things made in Europe, therefore they were against these tariffs. i. Introduction a. Ladies and gentlemen of the court, today my team and I will defend the theory that the Civil War began due to economic differences between the North and the South. ii. Thesis: The North and South were divided primarily by issues regarding slavery, tariffs and differences in industry. iii. Reason for guilt a. Slavery: North was against slavery, South was for it. Buying and selling slaves large part of Southern economy, depended on slaves to produce cotton. (Economics of the Civil War) b. Tariffs: North liked tariffs, people bought American. South disliked tariffs, wanted luxury goods from Europe. North tried to impose tariffs on South, tariffs alone were one of the main reasons for Southern secession. (476) c. Different economies: South = cotton agriculture, North = industry and factories (Economics of the Civil War). iv. Weaknesses in other trials a. ...read more.
I do not expect the Union to be dissolved; I do not expect the house to fall; but I do expect that it will cease to be divided. It will become all the one thing or all the other" (Norton, Roger). Q: But why would a simple difference in economies trigger such a catastrophic war? A: The thing is to the people of this time the economic variations were something that could not be avoided or shoved in the background. As soon as they realized that they were on paths of creating a successful nation by different means they sought change through war. It troubled the South that the North was industrialized while they stayed in the farming era. By moving forward with industry and non-slave labor the North put out he message that they were against the South's way of maintaining a successful economy. When a states economy is threatened craziness pursues. Money meant everything to the Southern states so when the North was found to be more successful through means of industry the South was automatically against them (EH.Net Encyclopedia: Economics of the Civil War). Q: How did tariffs add to the economic differences that led to the war? A: First off, Tariffs created money for the government by creating taxes on imported goods.
And in the nation's attempt to: establish or abolish slavery, regulate tariffs, and create industries that could coexist with one another, our nation became divided in a political and physical Civil War. Leading me to why we are gathered here today in this courtroom, I will no doubt find the economic differences of the Northern and Southern States guilty for causing the Civil War! 4. Cross-examination Questions i. Slavery- Slavery is a guilty cause to the civil war. However, do you agree that the Southern economies were formulated around slave labor, making the issue of slavery detrimental to the economy? ii. Culture- What defines culture? The jobs in an area bring and establish culture, the urban sprawl caused by the types of work found in the North and the South is the leading cause of the Civil War. iii. Election of Abe Lincoln- What was Abe Lincoln's platform that caused him to be elected? iv. State's Rights- "A house divided against itself cannot stand. I believe this government cannot endure permanently half slave and half free. I do not expect the Union to be dissolved; I do not expect the house to fall; but I do expect that it will cease to be divided. It will become all the one thing or all the other." Many politicians believed that federal rights preceded state's rights, in a nation that is defined by it's very economy, how can our determination to create a singularity reflect upon the state's rights?
Let's flash forward today in US to one US corporation deliberately setting the stage for corporate bankruptcy ready to shed all creditor debt and labor benefits and wages to become enfolded into that multi-national corporation found in Foreign Economic Zones overseas. BOEING has a strong professional class of employees---from technicians to research and development----most are unionized and earning strong middle-upper middle-class wages. Boeing employees have seen the writing on the wall this past decade as BOEING has been threatening to move to the south----overseas-----to kill US wage strength. That is what the coming economic crash from massive bond market fraud will bring. What happens to all those middle-class jobs? First Trump's Labor Secretary will make sure lots of foreign skilled workers from overseas takes many of those jobs---working for lower wages now but within a decade of Trans Pacific Trade Pact being installed these foreign skilled workers will be working in the US as they did overseas in their developing nation. Where are those unemployed Americans---like those Asian and Latin American citizens forced off their land and into global factories in Foreign Economic Zones---American workers will work as these foreign skilled workers OR BE THROWN INTO THE GLOBAL LABOR POOL TO WORK IN OVERSEAS FOREIGN ECONOMIC ZONES.
A US corporation like BOEING---and all US corporations were allowed to soak themselves in corporate bond debt just to go into bankruptcy----will not only shed workers and creditor debt----they will restructure away from CORPORATE RESEARCH AND DEVELOPMENT STRUCTURES----those are the jobs university grads went to after they graduated-----BOEING will spin off its RESEARCH AND DEVELOPMENT BRANCHES---and tie to global private and public 'research' universities----like University of Maryland and Johns Hopkins. See how corporate R and D becomes our apprenticeship pre-K through career college? No paid employees---just 'students' working from child to mid-adult in one long job training structure
This is what Obama and Clinton neo-liberals with Republicans in Congress passed as laws to allow---the subpriming not only of our public Treasury bonds but corporate bonds and it was the US FED and global Wall Street that pedaled this mess globally. Who bought all these corporate bond debts? Our pensions----401Ks----foreign corporations and foreign governments----making these US corporations multi-national while throwing all our public trusts and labor wealth into bankruptcy ------
Analyzing The Debt And Risk Of Boeing
Aug.27.12 | About: The Boeing (BA)
Value, research analyst, dividend growth investing, large-cap
A company's debt, liabilities and risk are very important factors in understanding the company. Having an understanding of a company's debt and liabilities is a key component in understanding the risk of a company, thus helping aid in a decision to invest, not to invest or to stay invested in a company. There are many metrics involved in understanding the debt of a company, but for this article, I will look at The Boeing Company's (NYSE:BA) total debt, total liabilities, debt ratios and WACC.
Through the above-mentioned four main metrics, we will understand more about the company's debt, liabilities and risk. If this summary is compared with other companies in the same sector, you will be able see which has the most debt and the most risk.
1. Total Debt = Long-Term Debt + Short-Term Debt
A debt is an amount of money borrowed by one party from another, and must be paid back. Total debt is the sum of long-term debt, which is debt that is due in one year or more, and short-term debt, which is any debt that is due within one year.
- 2007 - $7.455 billion + 762 million = $8.217 billion
- 2008 - $6.952 billion + $560 million = $7.512 billion
- 2009 - $12.217 billion + $707 million = $12.924 billion
- 2010 - $11.473 billion + $948 million = $12.421 billion
- 2011 - $10.018 billion + $2.353 billion = $12.371 billion
2. Total Liabilities
Liabilities are a company's legal debts or obligations that arise during the course of business operations, so debts are one type of liability, but not all liabilities. Total liabilities is the combination of long-term liabilities, which are the liabilities that are due in one year or more, and short-term or current liabilities, which are any liabilities due within one year.
For those US cities not having a Caesar's Casino forced on it by global Wall Street players as Wall Street Baltimore Development forced on Baltimore-----here is yet another example of a global US corporation being brought into bankruptcy to shed all creditor debt and to restructure ----guess who has that Caesar's corporate bond debt? THE CITIZENS OF BALTIMORE FOR ONE.
Below we see the TIERED TRANCHES allowed to protect top tier bond holders---global rich-----and send all the costs of bankruptcy to WE THE PEOPLE AND GOVERNMENT INVESTORS LIKE BALTIMORE CITY HALL. Caesar's Casinos were allowed a huge national expansion just before it filed for bankruptcy. Look at the settlements----the top tier-holders---the global rich global Wall Street gets the properties/real estate and the new corporate structure is spun off with the rest of the assets to become a global corporation=====so global investment firms will get the real estate and all that development tied to Baltimore's casino------the casino workers will lose their pensions, benefits-----wages-----and jobs----and all this development was touted as JOBS, JOBS, JOBS by Wall Street Baltimore Development 'LABOR AND JUSTICE' organizations while EVERYONE knew CAESAR"S was heading to BANKRUPTCY......this was an O'Malley and his Wall STreet players here in Maryland and Baltimore. National labor union leaders knew all this-----they pushed this expansion no doubt working globally to organize casino workers in overseas Foreign Economic Zones. Bringing US workers to third world poverty while organizing third world global labor pool already working for $3-6 a day----$20-30 a day for professsional workers.
'The bondholders, who own the company’s lower-ranking, second-lien notes, have also accused the parent company of reneging on a promise to help pay the operating unit’s debt'.
My organization Citizens' Oversight Maryland shouted and shouted against this Caesar's deal in Baltimore KNOWING IT WAS A SET-UP for loses by Baltimore taxpayers and harming Baltimore workers but the same Wall Street Baltimore Development 'labor and justice' organizations pushed it---as did Maryland Assembly and Baltimore City Hall----all global Wall Street players.
Caesars Bankruptcy Brawl With Creditors May Be Near Finale
Jodi Xu Klein
September 23, 2016, 5:00 AM EDT September 23, 2016, 12:52 PM EDT
- Midnight deadline for restructuring deal is approaching
- Bondholders, Caesars waiting for senior lenders to join deal
The company is giving creditors until midnight Friday in New York to accept a sweetened offer of more than $5 billion in cash, new debt and stock in a reorganized business. A group of bondholders that have been the biggest obstacle to the company’s plan has agreed on the framework of a deal, according to people familiar with the talks.
The remaining question is whether more-senior lenders -- who had backed previous iterations of the plan -- are willing to sacrifice some of their gains so the new plan can go through.
Under the old proposal on file in U.S. Bankruptcy Court in Chicago, they were promised cash, stock and debt worth more than the $11.7 billion in bank loans and first-lien bonds they hold. The new proposal requires them to give up “hundreds of millions of dollars” in recoveries, according to terms Caesars announced Wednesday. As of Thursday, at least some senior lenders were hesitating, said the people, who asked not to be identified because the discussions are private.
A deal would put Caesars Entertainment Operating Co. on track to exit one of the biggest bankruptcies of the past decade. Creditors including David Tepper’s Appaloosa Management have been battling the private-equity titans that acquired the company in a 2008 leveraged buyout, Apollo Global Management LLC and TPG Capital.
Representatives of Apollo, TPG and Caesars didn’t respond to requests for comment on the talks.
By signing onto the latest offer, the dissident bondholders would be bringing the bankruptcy “very close to the finish line,” said Julia Winters, a Bloomberg Intelligence analyst in New York and a former bankruptcy litigator.
In exchange for the sweetened offer, bondholders including Appaloosa would be required to drop any legal claims accusing Apollo and TPG and their top executives of plundering the operating company of valuable assets before putting it into bankruptcy. The bondholders, who own the company’s lower-ranking, second-lien notes, have also accused the parent company of reneging on a promise to help pay the operating unit’s debt.
Caesars, Apollo and TPG have all denied the allegations and say their actions were a legitimate attempt to restructure the unit. Caesars has also said the bond terms allowed the company to drop the payment guarantee.
Under the proposal creditors are now weighing, Caesars would boost its contribution of stock, debt and cash by about $1.2 billion to more than $5 billion. This would satisfy second-lien bondholders, who would see their total recoveries go up by $1.6 billion, but only if the higher-ranking creditors agree to reduce theirs.
Various pieces of the Las Vegas-based Caesars empire would be reorganized in and out of bankruptcy to make the deal work.
The non-bankrupt parent, Caesars Entertainment Corp., would combine with its publicly traded affiliate, Caesars Acquisition Co. Creditors of the bankrupt operating unit would own 62 percent of that new company, according to Wednesday’s announcement.
Apollo and TPG would end up controlling about 15.6 percent of this “new CEC”, or about half what they would have gotten under the old plan, Bloomberg Intelligence analyst Philip Brendel calculated.
The bankrupt operating unit would be organized into two new companies. One would operate the casinos as a subsidiary of new CEC. The other would own a large chunk of Caesars’s property and buildings. First-lien bondholders owed $6.35 billion would own the property company and collect rent from the operating company.
WHO ARE THE LOWER-TIER BOND HOLDERS? NO DOUBT CASINO EMPLOYEES-----CITIES LIKE BALTIMORE------WILL BE DESIGNATED 'RENTERS' ----TOP TIER OWNS PROPERTY AND COLLECTS RENT---GLOBAL INVESTMENT FIRMS IN US CITIES DEEMED FOREIGN ECONOMIC ZONES.
The second-lien noteholders would see a jump in recovery on the $5.5 billion they are owed, according to Brendel. Under the old plan, the best they could expect was 55 percent. The current proposal, if it succeeds, would pay them about 68 percent, he said.
Since the bankruptcy began in January 2015, a sticking point for the second-lien investors has been the equity value Apollo and TPG managed to retain in the original proposal. In the new offer, the two firms would see their stakes reduced, but not eliminated. Most equity holders of bankrupt companies typically recover little, if anything.
Winters said the private-equity owners were probably spurred to compromise by pressure from U.S. Bankruptcy Judge A. Benjamin Goldgar, who accused the firms last month of trying to get a “free ride” in bankruptcy while lawsuits against them would be quashed.
“It really compelled Apollo and TPG to fork over” their equity, she said.
The case is In re Caesars Entertainment Operating Co. Inc., 15-01145, U.S. Bankruptcy Court, Northern District of Illinois (Chicago).
As US corporations, community banks and credit unions are thrown into bankruptcy from this deliberate corporate bond debt and US Treasury and state municipal bond debt we already see the restructuring of US corporations that will after bankrutpcy resurface as global multi-national corporations with global corporate boards filled with the global 1% and their 2%---not a WE THE PEOPLE to be found. Since all of global ONE WORLD ONE GOVERNANCE has no public government---all will be global corporate NGOs as we already have here in Baltimore. Well, those lying, cheating, stealing CFOs bringing US corporations into bankruptcy in a BAIN'S CAPITAL style gutting of assets and spinning off while sending everything else into losses----will become those CEOs for global NGOs tasked with rebuilding US CITIES DEEMED FOREIGN ECONOMIC ZONES brought into bankruptcy from the same global subpriming of our US bond market.
Remember, these MARYLAND NON-PROFITS are temporary----it will be global NGOs that pay only the CORPORATE EXECUTIVE DIRECTOR AND A FEW STAFF----taking control of what used to be our strong public agencies in US cities------BYE BYE US CITY GOVERNANCE----and staff.
This is tied to the article in Baltimore Sun that has a former Wall STreet Baltimore Development director----LEVY-----telling us Baltimore needs a HIRING CEO------meaning a global corporate human capital resources that installs global labor pool into what were our Baltimore City public agencies. THIS IS ALL ONE WORLD ONE GOVERNANCE GLOBAL CORPORATE RULE----MOVING FORWARD IN BALTIMORE WITH THESE FRAUDULENT AND RIGGED DEMOCRATIC PRIMARY ELECTIONS---IT MATTERS FOLKS---BOTH LOCALLY AND PRESIDENTIAL ELECTIONS CAPTURED.
The Morning Ledger: Corporate CFOs Rush to Nonprofits - CFO ...blogs.wsj.com/cfo/2016/10/04/the-morning-ledger-corporate-cf...Oct 4, 2016 ... Corporate finance chiefs are increasingly heading for the exits to start a ... billion offering in February was its first such bond, which the company said in its ... Boeing defers the costs over the number of planes it expects to build in the ... asked a bankruptcy judge to approve an outline of a liquidation plan that ...
When Maryland media calls UnderArmour a FRONT DOOR to global development it is indeed---a global corporate campus starts with that headquarters and know what? We are already seeing those promised good paying jobs going to global labor pool----all this global corporate campus PUBLIC PARKS-----not to be public for long will be simply a global EXECUTIVE and tourism resort-----nothing to do with Baltimore or its citizens---remember this is BLOOMBERG FOREIGN ECONOMIC ZONE 2 NORTH AMERICA---not Baltimore MD USA-----global 1% and their 2% getting incredibly rich on global labor pool 99% enslaved and trapped in a human capital distribution system.
The reason Maryland is called INNOVATION AND ENTREPRENEURSHIP leader----is that IVY LEAGUE Johns Hopkins has these few decades sold patents to selected rich as with PLANK ---a Washington DC wealthy developer----leading to UnderArmour----selling university research for patenting was allowed these few decades by CLINTON/BUSH/OBAMA---while Federal funding for research shifted from all going to public universities to these global Wall Street IVY LEAGUEs----now these global IVY LEAGUEs are simply global hedge funds building subsidized corporate research and development from our universities.
Baltimore’s New Front Door
Under Armour’s new headquarters campus is just one of the new Maryland’s millennial magnets.
A rendering of the Under Armour headquarters at Port Covington.
Rendering courtesy of Under Armour
by PATTY RASMUSSENIn a 2014 op-ed piece in The Baltimore Sun, then Maryland Secretary of Planning Richard Eberhart Hall wrote,
“Redevelopment provides environmental benefits by reinvesting in buildings and infrastructure, focusing growth where services exist rather than creating new development on tracts far from population centers. People know it when they see it: downtowns bustling with activities and special events, a variety of housing types near places of employment, wide sidewalks that beckon to pedestrians and well-tended storefronts.”
He could have been describing plans for Port Covington, a sweeping, 260-acre (105-ha.) project that will transform a former industrial site into a vibrant live-work-play space. The mixed used project calls for offices, residential, retail, a whisky distillery and loads of parks and green space. Transit is an integral part of the Master Plan with proposed extension of Light Rail, bus and water taxi stops. The entire project will take about 20 years to complete. The centerpiece of the redevelopment is the 50-acre (20 ha.), 3 million-sq.-ft. (278,709-sq.-m.) campus and headquarters for Under Armour, the high-performance sportswear company founded by Kevin Plank, the company’s CEO and unabashed Baltimore booster.
Generating Some Buzz
“You can see the property from I-95, when you pass the stadium on your left,” says Neil Jurgens, vice president of Global Corporate Real Estate for Under Armour. “Right now you see the Baltimore Sun printing press building; we’re just beyond that. It’s great because at night you see our building really well. Our Master Plan calls for three towers that will be visible from the interstate. Kevin really wanted to create this iconic place for Baltimore. He said, ‘Let’s not only create a great place for our teammates but also generate great buzz for the city. Let’s make a new front door.’”
The Under Armour campus will eventually house 10,000 employees.
— Renderings courtesy of Under Armour
While the larger project is being developed by Plank’s private development company, Sagamore Development, the Under Armour project is separate. “We’re owning it and developing it ourselves,” says Jurgens. That separation is important to the company as Sagamore pursues such items as tax increment financing (TIF) for any infrastructure improvements to the real estate. “Like anyone else, we are going to pursue the as-of-right tax credits, the brownfield tax credits and the enterprise zone,” he says. “But we’re not using any TIF to fund the construction of the Under Armour campus itself. That sort of money will not, and couldn’t, be used for building our field house or our buildings.”
"We’ve built all over the place. But we see the core, the nucleus here in Baltimore. We call it home.”
— Neil Jurgens, Vice President Global Corporate Real Estate, Under Armour
The Under Armour campus will be built in four primary stages of development which are broken down into smaller phases. “My phasing plan is 12 phases, which might sound crazy but they’re manageable pieces,” Jurgens says. “We’re still a growth company. Those twelve phases of development can be accelerated if the company grows faster. We will have the ability to slow down or speed up depending on Under Armour’s performance, something happens in the world, whatever.”
At this point in the process, Under Armour has received approval from the city’s Urban Design and Architecture Review Panel (UDARP). The next step is to go before the city’s Site Plan Review Committee. “This first phase that we’re in now is substantial, developing 500,000 sq. ft. [46,451 sq. m.] of space, plus the parking structure, plus the lake, plus the central utility plan and some other things,” says Jurgens. “To put it in perspective, our existing campus at Tide Point is just under 500,000 sq. ft. We just opened this building, an adaptive reuse of a Sam’s Club, and we have 170,000 sq. ft. [15,794 sq. m.]. The expectation is that we’ll build it in the next four to five years.”
Jurgens called the project a game changer for the city and in this instance the well-used description is not an exaggeration. As it stands now, Port Covington isn’t generating tax revenue or jobs. Under Armour is planning for a campus with 10,000 employees. Consider the following statistics: currently Under Armour has approximately 1,800 employees with just under 40 percent living in the city limits.
“They’re buying homes, renting apartments, buying food, all their goods. The economic uplift is huge,” Jurgens says. “We had Ernst & Young do an economic study and they found that for every Under Armour job being generated here at this campus, another 1.5 jobs are being generated. That’s from other businesses, vendors, suppliers, companies supporting Under Armour’s operation. And those people are spending. There’s enormous economic impact to the state. We’re taking this forgotten area, this underutilized land, and really transforming it into a vibrant economic engine for the city.”
Under Armour has invested in facilities around the world, but there was never any doubt that the company’s headquarters would go anywhere but Baltimore. Though he doesn’t claim to speak for his boss, Jurgens — also a Baltimore native — can certainly identify with Plank’s vision of making something great happen in Baltimore. It’s why, when he was living in California working for Disney, Jurgens made the move back east. “It was his vision about what the company was going to become and what he was going to do to help the city,” says Jurgens. “It was a compelling story, a compelling vision that brought me back, for sure. We’ve built all over the place. But we see the core, the nucleus here in Baltimore. We call it home.”
Comments like Jurgens’ are music to the ears of Bill Cole, CEO of the Baltimore Development Corporation (BDC). Cole loves to tell the Baltimore story, especially enumerating the city’s many assets — a great location, easy access via interstate, rail and air, and a first-class deep water port. But excellent infrastructure tells just one side of the surge of interest in Baltimore.
“We’re the 4th fastest growing millennial population in the US and we have the 8th largest millennial population overall,” Cole says. “You add in Under Armour, you add in John’s Hopkins University, the University of Maryland and two rapidly growing bio-parks and all of a sudden you have this young vibrant workforce. A lot of things drive our millennial growth but by all relative terms living in an urban area, this is still one of the less expensive areas up and down the East Coast. It is exponentially cheaper to live here than in Washington, D.C., so we also see a lot of people who choose to live here and commute using the train.”
Greater Baltimore has experienced the 4th fastest growth of young professionals with advanced degrees among the 25 largest metros.
OH, REALLY???? ARE YOU TALKING ABOUT THE FLOOD OF COLLEGE GRADS FORCED TO WORK AS VISTAS AND OTHER NON-PROFIT STATS TO SHED SOME TUITION DEBT?
Baltimore is an acknowledged startup city. The US Chamber of Commerce ranks Maryland no. 3 in the country for innovation and entrepreneurship, thanks to the state’s longstanding commitment to nurturing research and development in bioscience, cybersecurity and other tech fields. The BDC has long supported early stage tech companies through its Emerging Technology Centers (ETC) initiative, which provides technical and networking connections to help those companies grow. The ETC has an outstanding track record, assisting more than 350 companies since 1999, 87 percent of which are still in business. The companies have created more than 2,300 jobs and raised $1.8 billion in outside funding.
Based on statistics from the 2015 Greater Baltimore Regional Report published by the Economic Alliance of Greater Baltimore, there appears to be a correlation between startup activity and a city’s millennial population. Looking at data from 2010 through 2015, startup activity doubled in Greater Baltimore as the metro also experienced some of the nation’s fastest growth of young professionals with advanced degrees.
But startups and tech companies aren’t the only ones to call the City of Baltimore home. Pandora, the Danish jewelry company, moved its regional headquarters along with 250 employees from the suburbs to the downtown core in 2015. The company looked at more than 60 locations and acknowledged that employees were eager to work in the urban environment. And energy company Exelon is continuing to build its $270 million Exelon Tower headquarters building and mixed use development. It is scheduled to open later this year.
A Blank Slate
Not all redevelopment involves greenspace, whisky distilleries and residential. The massive Tradepoint Atlantic is the brownfield redevelopment an old Bethlehem Steel mill at Sparrow’s Point, looking to turn 3,100 acres (1,255 ha.) into a “world class, institutional quality, multi-modal industrial development,” says Mark Levy, managing director at JLL, the exclusive real estate provider for the property.
In addition to its size, the Tradepoint property boasts outstanding transportation infrastructure including a short-line railroad connecting to two Class 1 railroads and easy access to the Port of Baltimore, major interstates and an international airport. Levy says the sheer scope of the land and infrastructure at Tradepoint Atlantic make it an exciting venture. “I don’t think we have any preconceived notion of what is right or wrong for the property,” he adds. “The list of things we won’t look at is probably shorter than the list of things we will look at. In the industrial spectrum, there’s really nothing that’s been put on the ‘do not pursue’ list.”
"This is not the Maryland of 15 years ago.”
— Mark Levy, Managing Director, JLL
In January 2016, FedEx Ground became the first company to sign on at Tradepoint Atlantic. The small-package ground delivery unit will build a 300,000-sq.-ft. (27,871-sq.-m.) distribution facility at the property. “In a macro sense, FedEx Ground is essentially a distribution network for a lot of companies that are potential candidates for the property,” says Levy. “They realize the opportunity for the larger property and realize the opportunity to be proximate to what the future could hold here.”
Tom Sadowski is the CEO of the Economic Alliance of Greater Baltimore. He says projects like Tradepoint Atlantic, Port Covington and the Under Armour headquarters are indications of not just Baltimore’s strength, but the region and the state as well. “We have some of the most tremendous and diverse arrays of government and federally funded laboratories, institutions, military installations that are driving the nation’s economy, from healthcare and health-related research to cybersecurity and aerospace,” he says, noting a change in Maryland in the past four to five years. “We’ve stopped relying on federal spending and looked for innovative and entrepreneurial ways to leverage our assets to create real sustainable commercial enterprise and commerce here,” he says.
JLL’s Levy agrees. “The success of Tradepoint Atlantic is going to be predicated on this being a strong public private partnership,” he says. “A lot of the success of these types of projects has to do with the commitment on the part of the state to get behind it and make it a success. Historically, Maryland hasn’t been favorably viewed in the context of site selection, not viewed as pro-business or putting the right incentives in place to attract business, but I will tell you that when the Secretary of the Maryland Department of Commerce gives you his cell phone number and says call me anytime, something’s different. I have never in my life called a cabinet level government official and had him answer the cell phone. This is a great confluence of that sort of political infrastructure. This is not the Maryland of 15 years ago.”
This is why US corporations are coming back to America-----they were allotted these several decades to create infrastructure overseas and now the Asian and Latin American 1% and their 2% are going to take over inside their own nations. That was all planned as US cities deemed Foreign Economic Zones in late 1990s were allowed to decay and all assets looted to make way for building the same in the US.
China has a billion citizens to fill its growing SPECIAL ECONOMIC ZONES----so it will gladly keep pushing its citizens into a global labor pool------as will the 1% and their 2% from Malaysia, Japan, Vietnam, Philippines, Bahrain, Jordan-----so those 5 billion human capital are plenty to fill our US cities deemed FOREIGN ECONOMIC ZONES---working here in the US as they do overseas!
Don't forget----black and Latino citizens are no longer the MINORITY------so POSING PROGRESSIVE SOCIAL LABOR LAWS are calling for global corporate campus jobs at campuses like UnderArmour and Johns Hopkins to go to those Asian and African labor pools.
Global corporations are not leaving Asian and Latin American Foreign Economic Zones because Chinese leaders or Latin American leaders hate the US---not because of spying and global power-----they are leaving because back in the 1990s----US cities were deemed FOREIGN ECONOMIC ZONES and MASTER PLANS for these cities prepared for these global corporations to come back to US operating as they did overseas. ONE WORLD ONE GOVERNANCE global 1% and their 2% apply only.
This is why CLINTON/BUSH/OBAMA spent these few decades completely ignoring all US Constitutional rights, Federal laws, and dismantled all public justice and all of our rights as citizens.
Why US companies have started fleeing China
By Noah Smith
May 17, 2016 | 6:53am
For a long time, it looked as if Apple had found the key to unlock the Chinese market. A world-famous brand, extensive factories in China and cooperation with the government’s demands led to booming sales of iPhones and other Apple products.
Recently, however, the company has discovered that even the best-behaved of Western multinationals may not be able to hold the government’s favor for long.
The Chinese government just shut down two of Apple’s key service products, the iBooks Store and iTunes Movies. It has also denied Apple the right to trademark the name “iPhone,” allowing other companies to use the name for their own, non-Apple-related products. Meanwhile, Apple’s outperformance in China may be coming to an end, as revenue in the Greater China area plunges and consumers turn to domestic manufacturers.
Apple’s stumbles in China seem emblematic of a broader realization:
US companies have less of a future there than many had hoped.
For many years, the vast Chinese market — more than 1 billion consumers in a fast-growing economy — sent thrills of excitement up the spines of corporate managers throughout the developed world. Who cares about the stagnation in Europe and Japan, when China has many more people than all of those markets combined?
Even as rising labor and energy costs reduced China’s advantage as a low-cost production site, the dazzling lure of the Chinese consumer pushed many multinationals to locate offices and factories in the country.
Unfortunately, that promise turned out to be a mirage for many companies.
If the Chinese government ever had any intention to step back and let foreign companies compete with domestic ones on a level playing field, it certainly now looks like it has changed its mind. Not long after multinationals showed up in China, they were made to hand over much of their technology to native competitors (almost all of which are directly or indirectly owned by the Chinese government).
This was happening as early as 2006, as the Harvard Business Review reported:
“These rules limit investment by foreign companies as well as their access to China’s markets, stipulate a high degree of local content in equipment produced in the country, and force the transfer of proprietary technologies from foreign companies to their joint ventures with China’s state-owned enterprises.”
Proprietary technology is the most valuable asset owned by many multinationals.
So China truly offered a lose-lose choice for these companies — either they could miss out on the Chinese market in the short term, or give away technologies that would allow Chinese competitors to challenge them all over the world in the medium term. Of course, given China’s high rate of industrial espionage, the penalty for operating in China was even higher than official government policy would suggest.
Multinational companies often think very short term, so perhaps it isn’t surprising that many chose to make the devil’s bargain. Now the bill is coming due, as China’s government promotes its own national champions, many of which are now equipped with pirated foreign technology.
Meanwhile, multinationals’ China operations have become less and less profitable as domestic competition has intensified. The Chinese government, of course, has aided this process by systematically discriminating against foreign companies, enforcing laws and regulations with regard to multinationals while looking the other way when a domestic company commits a violation.
There are signs that some multinationals have had enough. Many are closing offices and factories in China, as costs rise and the government shuts foreigners out of the domestic market. Some recent examples include Microsoft, Adobe, Panasonic, Yahoo and Adidas.
Between this and the effects of China’s general economic slowdown, foreign direct investment into the country — while volatile — has declined in the past few years.
In the short run, this clampdown by China is bad for US companies. They’ll face Chinese competitors armed with transferred or stolen technology. Their supply chains, which had grown dependent on cheap Chinese production costs, may also be disrupted. And they’ll be shut out of one of the world’s largest markets, losing much of the investment that they plowed into expansion there.
But in the long run, I suspect China will suffer even more. When foreign companies pack up and leave, it’ll get much harder to steal or force the transfer of their proprietary technologies — and these companies won’t make the same mistake twice.
In the meantime, many Chinese companies will lose the productivity boost that comes from being forced to compete with foreigners. If China loses the benefits of economic openness that it enjoyed in past decades, its growth will slow before it gets rich, and the Chinese people may become less satisfied with the regime they live under.