The point of equilibrium that globalized China forged with multinationals is at the middle of its axis. A wedding was paid for with the economy as a blessing. After one of the newlyweds came of age with his accession to the WTO in 2001, they celebrated a pagan ritual, motivated by sinister interests without an ounce of emotion. Love notoriously runs into crisis in its seventh year, but bank accounts last much longer. They bask in the nourishment of economic growth, certainly not emotions. Is this marriage in crisis? Have multinationals found younger and more beautiful countries? The relationship appears to have deteriorated, but not in an irreversible crisis, maybe because there’s no substitute partner on the horizon. Multinationals would like to send their capital elsewhere, but the sirens behind the Great Wall—however sad and wrinkled—keep detaining them. China is still the country that attracts the most productive investments in the world. If financial investments were included, it would still retain first place—ahead of the United States—if capital directed toward Hong Kong were counted (a good part of which effectively reaches China). The Red Dragon’s magnet keeps working, creating a fatal attraction that isn’t affected by age. And yet, all surveys confirm the general climate of disenchantment and protest among foreign companies, as if the secret pact between spouses has been broken, as if the whispered voices of American businesses have prevailed: “in a join-venture with the Chinese, the two partners share the same bed, but not the same dream.” Sometimes the dream becomes a nightmare. The recent annual reports by the American and European Chambers of Commerce in China confirm this, and therefore the representatives of the most prestigious international entrepreneurs. The accusations become stronger and more detailed each year. In short: the Chinese government penalizes foreign businesses compared to Chinese businesses. The latter are able to evade taxes, are not punished for environmental violations, and apply labor contracts loosely. Large and small multinationals are subjected to restrictions that undermine their competitiveness. This is a crucial argument, because customers aren’t just overseas anymore. Now the market is within the confines of China, ever since Beijing decided to increase wages by law and to not entrust the evolution of their circumstances exclusively to international demand. Furthermore, people complain that access to public tenders is not transparent. Local businesses—frequently state-owned—win the most important contracts. The era of foreign technological superiority has ended. At the time, China could negotiate the most of its backwardness; today, it strikes foreign competence directly favoring the most ambitious national competencies. Finally, despite some progress the machinery of civil justice is imbalanced in favor of Chinese enterprises, which almost always win business disputes. If the questionnaires completed by foreign managers are anonymous, then corruption is the first concerns; in the opposite case, the fear of retaliation suggests more bland answers. The mix that China offers is always valid, but it has become bitterer. No other country in the world can offer lower production costs, political stability, infrastructure networks, and growing internal markets. In any case, all of this comes at a high cost: the harshness of the business environment, uncertainties regarding rights, and dissatisfaction of managers that see living conditions worsen in the biggest cities. In addition, modern China has become more rigid in negotiations, proud of its role, and forgetful of only a few decades ago when it begged for investments and offered disciple and miserable salaries for its workforce. China’s history over the past 35 years has proved it right, but hasn’t made it an imitable model. Multinationals, which have aided China in its ascent, now endure it rather than choose it. Today, China is more expensive, but it is also more profitable. Its attraction doesn’t originate from its costs but from its central position in the value chain. The internal market will replace exports, consumption will flank investments, and quality will prevail over quantity in the long run. These changes will only bear China’s color with splashes of multinationals when needed. Beijing will continue in its direction, according to which, what’s good for China doesn’t need appendices. This is why multinationals complain. They have good reason, the Chinese transgressions are unequivocal, but it’s the loss of superiority that’s upsetting them. China has changed only in terms of arrogance and awareness of its own power; its defects were present even before, maybe even more resounding. In any case, they were more manageable, because they melted in a bath of generalized accommodation, where profit margins were large enough to make everyone happy and overlook violations. Now, the marriage is in crisis, the fights are obvious, the wrongs are blatant, but until new options for coupling appear, they will continue to cohabitate, at least like a separated couple.
