Are State Owned Companies At Risk Of Economic Downturns?

I have been watching Venezuela for some months now. Their economy has been mired since the price of oil took a nose-dive and their citizens have been bearing the brunt of the pain. Their inflation was 800% in 2016. If you watched the news in the last 48 hours, you know that the central government along with a strong-arm guerilla leader have seized most of the branches of government and two days ago seized the GM plant and all of its assets. (Does this remind anyone of Cuba?). As I am watching all of this unfold, it occurs to me that while dissimilar in nature, countries that have at least partial state ownership of business could be equally as affected by an economic downturn, the depth, and length of the one in Venezuela.

Is it me or could say, China, with billions of citizens, suffer a similar fate if their economy took a sustained nose-dive? The results could spell real trouble for those who have built an entire supply chain from Hangzhou to Atlanta. Would/does this give anyone pause enough to alter your business model or is that well above anyone's pay grade?

Mark, I think that is a very good observation. In particular, hikvision is certainly at risk to a downturn in the Chinese economy, especially because so much of its funding and revenue comes from the government.

Moreover, the Chinese government is increasing debt much faster than growth, and is building a debt bubble.

When the Chinese economy experience a downturn, hike vision domestic sales may decline sharply. When that happens, and it could be one year or six years from now, I would expect hike vision to sharply cut it's international sales and marketing expenditures. On the other hand, they would likely have significant overcapacity in their factories, which might motivate them to cut prices even further.

The scale of Hikvision and its government ownership is unprecedented in this industry. What happens therefore is hard to predict but I think you are right on in the concern that state owned companies are significantly impacted by economic downturns.