WSJ Discovers China Ties Export Credits, States Offer Location Incentives, and Banks Give Loans to Large Companies

WSJ is shocked, shocked to discover that China supports major Chinese companies. The first half of the article and the headline encourages the reader to infer that unreasonable Chinese government support is why Huawei has done so well.

The facts in the article don’t support that claim. By and large, the inference is inaccurate. Huawei’s success is primarily due to extraordinarily hard work and farseeing management. Like most large companies, it takes advantage of government support, which often favors tech companies.

Yes, the government ties low-interest loans in Africa to purchases from Chinese companies. So do the US, the Koreans, and many others..

The city of Dongguan provided low-cost land for a large research center. Dozens of US cities, including New York & Washington, offered massive subsidies to Amazon when considering a second headquarters. Wisconsin promised $3B for a Foxconn plant.

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