15. A country can never have too much Investments
When I was studying for my MBA in the City University of Hong Kong, my professor gave me a statement that seemed like an Eureka moment. Many of the university professors acted as advisers to many government units in China, and he shared with me an insight.
He said, “ we used to advise China that it would be a great benefit to China to attract foreign businesses to set up shop in China to export and earn dollars. Now we are revising our thinking. We think that any foreign business that set up shop in China, whether to sell locally or for export will benefit China”.
After all, what country has been found to grow poorer because too many businesses, foreign and local, set up shop there? The more businesses and competition, the more the consumer benefits, and for the government, the more taxes.
What is the distinction between a Filipino and a foreign company? It used to be that we don’t like foreign companies because they will send back the money that they earned, thus effectively denying us the impact of their profits while the local is supposedly here to stick with the community through thick and thin. But now any company, can send money around the world, and can effectively salt profits abroad.
What matters is businesses provide jobs, introduce technology and expertise, treat workers decently, practice green, and pay taxes. As Deng Xiao Ping, former premier of China said famously, “ Don’t care whether the cat is black or white, as long as it catches mice.”
And look at our airlines, our telecom companies, our retail, and hotel industries today. Are we not all better off because more are here? Competition brings out the best in us, and the efficiency and better products, especially the lower prices benefits all.
Regulate if we must. Deny if you need to. But the default should be – the more the better!
May 19th, 2010 at 3:07 am
I like this topic a LOT. I cannot agree more. Having lived in China for 8 years, and having operated a business there for 5 years now, while China is not a perfect country to do business in when it comes to business practices, they are definitely learning and heading the right direction.
May 20th, 2010 at 4:43 am
If you open up the business, that will drive a lot of locals out of business…..
May 21st, 2010 at 9:09 am
the locals need to adjust and learn to be competitive. it is a fact of life. i agree 100% wilson. the world is opening up. we can’t sit behind protective business and trade and rest complacently. this does not create productivity or efficiency. we seem to always have the attitude that inward investment or the opening up of markets is oppressive to us. but on the contrary it opens up global markets for our products and services as well. if we are good enough to compete with the best.
May 31st, 2010 at 9:32 am
Too much protectionist policies in this country. The infant industry argument and the developing country arguments have been abused by the gov officials in order to place higher import (tarrifs) and other non -tariff barriers for the past decades. Again, those that we protected much did not learn how to be globally competitive. South Korea’s industrial targeting policy (including Japan) proved to be successful, they did heavy protection in their infant industries before and indeed have become the most promising global industries at present. I even would want to believe that import substitution industrialization became successful in these countries.
Making Globalization Work by Nobel Prize winner in Economics, Joseph Stiglitz and The World is Flat v3 by Thomas Freidman provide very interesting debates about how this era of becoming a global village came to be..
May 31st, 2010 at 9:39 am
I was also told by fellow who did her PhD Econ at National University of Singapore that when Deng Xiaoping visited Lee Kuan Yew he asked how did you this (referring to the skycrapers in Sg and other infras) ? Lee answered, you are small man with a great country, history and people. Open your country to the rest of the world? Openness, trade and economic growth are interrelated, however which one causes the other is still vague in most emprical studies.