Tuesday, May 19, 2015

Tell Me Again Why the Future Belongs to China?

Remember when multi-national corporations were tripping over themselves to do business in China?  Some knew it wouldn't end well.

Well, here is a story that is indicative of what doing business in China is really like.  A giant Brazilian mining company that ships oodles of iron ore to China spends $135 million per ship to build monster ships to ship the iron ore.  Then China says that the ships can't dock at its ports for "safety" reasons.  So the Brazilians build a $1.4 billion terminal in Malaysia to unload the ore from the monster ships to smaller ships that can dock in China.  Having been sliced to ribbons financially, guess what, the Brazilians have to sell the monster ships to China for $110 million apiece. 

So China makes the Brazilians bear all the construction risk, screws them with some regulatory BS, nearly bankrupts them and gladly takes the goodies off of the rubes for a song.

And yet people still believe that China is the global economic leader of the future...?  Sorry folks, not after shenanigans like this they won't. 


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