Here's this week's Las Vegas Weekly column. Back to normal after last week's blowout edition, albeit it down here in Florida with my parents for the week assessing the damage left by Hurricane Jeffrey. More soon. -sf
Why Steve Wynn should—and shouldn’t—fear China
By STEVE FRIESS
The Las Vegas media lately have spent a whole bunch of ink and digital space attacking and analyzing Steve Wynn’s suggestion that he might move his corporate headquarters to China. Much of that has been appropriate, but again and again writers go for the cheap shot—claiming irony in the notion that a capitalist like Wynn believes he can find safe harbor among “communists”—without understanding how geopolitically incorrect they’re being.
I know a thing or two about this. I lived and covered the Middle Kingdom for two years, I went back to cover the SARS outbreak, the opening of Sands Macau and the opening of Wynn Macau. I even attended a rave on the Great Wall in 2001 the night before then-Chinese president Jiang Zemin celebrated the 80th anniversary of “communism.”
So here’s the deal: Yes, the ruling group in China is known as the Communist Party. But no, China has not been a little-C communist nation for decades now. There is no wealth distribution to the masses, the state has increasingly ceded control over major industries to private or publicly traded interests and, best of all, not everyone is a comrade. In fact, only about 5.6 percent of the nation’s population are members of the Communist Party.
China today is more akin to a gigantic corporation I’ve for 10 years been calling PRC Inc. The CPC is the board of this, the world’s largest company, setting the rules and, no doubt, reaping an untold and unaccounted-for fortune from its operations. As would be the case in the U.S. if Wall Street and major manufacturers really had their way, China today offers unrestrained capitalism of the sort we saw in late-1800s America, before the existence of labor unions, antitrust laws and other restrictions on the free market. There’s little in the way of environmental law, work-safety legislation, even proper jurisprudence to adjudicate civil disputes or protect the rights of crime suspects the way we understand it. It’s the Wild, Wild East.
Wynn should certainly be wary of placing too much faith in the Chinese government, but not because it’s communist in the sense that one day PRC Inc. will seize his land and run his casinos. No, he should worry because ...
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4 comments:
It's not simply "communism," it's the absurd level of mental gymnastics Wynn must endure to live in his world.
Probably the easiest to cite and most morally bankrupt example? This is a guy who claims that the Dalai Lama is a close spiritual advisor, but also supports the regime who basically ousted him and took over his country.
Dear Steve,
I must congratulate you on the article – Dragon Quest– Why Steve Wynn should –and shouldn’t – fear China published on Las Vegas Weekly. You need to publish this article in national news papers.
Your understanding about China and it’s government is incredibly accurate. I have lived and worked in Shanghai, China for the past 15 years with my family. I ran a business there and had plenty of “Wild, Wild East” experience. I wish Steve Wynn would read your article and learn something from it. He is too naïve about China. Americans take our country for granted and this even happens to Steve Wynn..….
All in all, good column this week. And btw, I'm so sorry about what's going on with your family.
But getting back to China, it really is more complicated than it seems. The "communism" practiced there today is nothing like the state-centric government-controlled-everything model we were used to seeing in the Soviet Union, but the "capitalism" practiced there today is nothing like the managed market economies we see here in the US, Europe, and Japan. The government is still highly involved in central planning and economic management, but at the same time companies don't have to deal with the labor laws, environmental laws, consumer protection laws, and other regulations that keep our "free market" working fairly.
So I can see why Steve Wynn is attracted to the "Wild Wild East" of China on one hand, but on the other I still think he needs to think twice before he makes any decisions on moving Wynn corporate HQ. After all, Beijing wouldn't allow any of the criticism he now regularly tosses freely here at President Obama and other politicians.
You got it right about paternalism, but the 2 strains in the USA and China are both choking free trade and commerce. You should fault Wynn for not seeing how China could restrict his business activities and interests. Wynn might be free from burdensome taxes and employee rules/regulations and benefits, but he will have to cater to bureaucratic corruption and redtape. Then he will deal with the state if it decides to compete with its unlimited supply of cheap dollars.
As for the journalism angle, did we forget that Obama praised China in more than one occasion especially on the matter of infrastructure improvements? Did they notice? The irony of taking over GM, Wall Street, and Health Care have been overlooked as well. What about the oil spill? There are reports about the lack of getting proper permits (maybe a Chinese trait adopted).
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