Comments on: China taxes oil exports by foreign firms http://www.china-briefing.com/news/2007/07/11/china-taxes-oil-exports-by-foreign-firms.html Mon, 13 Oct 2008 19:42:34 +0000 http://wordpress.org/?v=2.3.2 By: Chris Devonshire-Ellis http://www.china-briefing.com/news/2007/07/11/china-taxes-oil-exports-by-foreign-firms.html#comment-173 Chris Devonshire-Ellis Wed, 11 Jul 2007 13:22:52 +0000 http://www.china-briefing.com/news/2007/07/11/china-taxes-oil-exports-by-foreign-firms.html#comment-173 Well at least that is better than suddently forcing them to do it when their reserves run low. Tootal had their export license withdrawn in Dalian last year when they refused to cut back on exports to 'patriotically assist' with domestic sales - at far lower prices than the export market was paying for refined. I don't buy the 'bringing into line with domestic companies' line though. The fact is, China is purchasing energy resources domestically at discounted levels and is forcing the foreign invested companies to divert profits away from exports and into China's lower value domestic market. This was not actually the original intention of the foreign investors. State interference in foreign invested enterprises ability to sell to the true market price ? You betcha. Of course the Chinese government don't have to answer to the shareholders - on either side. Well at least that is better than suddently forcing them to do it when their reserves run low. Tootal had their export license withdrawn in Dalian last year when they refused to cut back on exports to ‘patriotically assist’ with domestic sales - at far lower prices than the export market was paying for refined. I don’t buy the ‘bringing into line with domestic companies’ line though.

The fact is, China is purchasing energy resources domestically at discounted levels and is forcing the foreign invested companies to divert profits away from exports and into China’s lower value domestic market. This was not actually the original intention of the foreign investors. State interference in foreign invested enterprises ability to sell to the true market price ? You betcha. Of course the Chinese government don’t have to answer to the shareholders - on either side.

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