Did China borrow from Amazon's playbook? (provide a place for business to grow, then just “take over” when they're successful)

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The Politicus
Nov 25, 2021 01:01 AM 0 Answers
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Background:

CNN's Jamie Dimon says he regrets joking about the Chinese Communist Party says of JPMorgan (JPM) CEO Jamie Dimon:

At one point, Dimon compared the political and economic approaches in both countries, saying that in the United States, "we have the gifts of our founding fathers: freedom of speech, freedom of religion, freedom of enterprise, freedom of human capital, immigration."

"If you opened up the doors of America, a billion people would come here. If you open the doors to China, how many people do you think will go there?" he said.

"[An] autocratic ... economy doesn't work particularly well as a country gets much more sophisticated. And I'm not saying this to be angry to China. I think they have done a better job managing that country than we would have done at managing that country. They are very smart."

(Emphasis mine)

China of course has managed to produce a(n until at least recently) flourishing tech business sector, due in no small part to having a huge and newly tech-hungry customer base within China, a great firewall around it, and a limited period of time when it was allowed to grow "free market"-style.

These days the central government is reigning in various large sectors of the economy with new regulation and central control, with one of the most notable being the temporary disappearance of Jack Ma and sudden cancellation of the Ant Group's IPO, and In its latest crackdown, China intensifies focus on real estate.

Question:

Many sellers on Amazon have complained that Amazon's business model includes providing an environment for free competition up to the point that something looks successful, and then "taking over" by selling their own very similar product based on access to the other seller's information.

The title suggest that China may borrow from this playbook, but differently in that after high tech businesses have become successful through an artificial, temporary free market environment it simply grabs control, leaving the companies in place but now under new, sudden and very substantial central government control.

Question: Did China "borrow" from Amazon's playbook? Is this a reasonable analogy or is it substantially flawed? If so, is there a more accurate one?

NOTE: By definition A can only be an analogy of B if it is not the same thing as B. It must have substantial differences to be analogous, otherwise it's simply the same thing. So a "No" answer can't simply be "It's not the same thing", it must go farther.

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  • November 25, 2021