Proposed Innovation Act amendment would block US investment in China

A draft US law that would, for one thing, subsidize the US semiconductor industry, has gained an amendment that would turn the screws on American investments in foreign countries. The proposed update states that semiconductors, large-capacity batteries, pharmaceuticals, rare-earth elements biotech, AI, quantum computing, …

[elsergiovolador]

Dodging

The so called "investment in China" in reality is tax and employment law dodging.

Why set up a factory in your own country and deal with high tax and complex employment laws if you can get Chinese to build a factory for you and if workers get upset ship them and their families to labour camps?

Big corporations actually lobby for more complex laws, so that a competition has no chance to emerge, not that they care about domestic workers etc. and to set up a shop in China you need to have a substantial budget, usually out of reach of small business (that could become big).

[Gene Cash]

Re: Dodging

No, as I seem to recall from the Tesla case, China kind of insists you build factories and employ local workers, in addition to sharing your source code and other IP grabs, if you want to sell lots of product there.

[Youngone]

Re: Dodging

The vast American corporation I work for has had factories in China for 30 years, and currently makes roughly $1 billion in profits from them every year.

I suspect the shareholders are ok with whatever terms the Chinese offered all those years ago.

[John Brown (no body)]

Re: Dodging

"I suspect the shareholders are ok with whatever terms the Chinese offered all those years ago."

Terms can change. Especially when it's an authoritarian government in charge of the terms. With the constant spats between the US and China, and the current example of Russia, I'll bet the bosses are keeping a very close eye on developments. (Or maybe have their heads in the sand while counting the profits, hoping things will stay the same)

[eldakka]

Re: Dodging

> Terms can change.

I am altering the deal. Pray I don't alter it any further.

- Various unnamed despots and their sidekicks

[Anonymous Coward]

Re: Dodging

> Terms can change.

I am altering the deal. Pray I don't alter it any further.

- 3 US companies that made our critical technical components

After 5 years, we only had one US supplier left. We had moved to asian suppliers. The US technical capacity was excellent, but the business leaders would

a) dither for months (asians basically decide yes/no)

b) screw you at the drop of a hat, for no discernible reason.

Only one of those companies was still in business a decade later (yeah the ones who didn't screw us).

I kept using the technical people as consultants for years afterwards, and they were good, and honest, but US businessmen are totally unworkable.

[VoiceOfTruth]

Re: Dodging

-> in addition to sharing your source code

To ensure it is not full of NSA back doors.