Destroying industries one by one - the coolest thing about it is they are only doing it to improve the standard of living for their people - having a global monopoly is not the #1 reason.
Like the rest of the world's economy wont matter and are like small planets.
Cheap Chinese labor is used because it is cheap. In terms of prices, we would be better off if things were more integrated and automated.
We rely on gigantic volumes to drive prices down. There is no reason why automation couldn't drive the prices down in the same way on much lower volumes.
Things will be better off when things are more integrated and automated.
That is true because the country can delay the investment into increasing capital, which it can invest in another industry, and while that's happening, the trade partner will have increased income in the mean time.
Let's take an example to the extreme.
U.S. can spend 20% of it's GDP over the next 10 years building Strong A.I., but it will probably be better off to import human-level intelligence over the internet from low income countries, and gradually ramp up it's investment into Strong A.I. as the cost of importing intelligence from low income countries increase. Over-investment into capital is not economically efficient.
Keeping agrarian societies in their place since 1817.
Though note that there may be strategic reasons for having some aluminum production capability.
Besides, if the yuan rises against the dollar or Chinese electricity costs go up, all the smelting will eventually go somewhere else.
1) Cheap labor. [ But India and other countries have cheap labor ]
2) A willingness to completely disregard ecological damage.
Its #2 that makes them into a blackhole and since everyone on Earth breathes the same air...yeah.
But this is not like manufacturing phones where labor = O(number of phones produced). Am I wrong? Why is aluminum production not almost purely capital intensive?
If so, it would suggest that the advantage of China isn't cheap labor costs, but either cheap energy, cheap regulations, or cheap currency.
Which really means Chinese aluminum needs to be taxed to price in the full costs of environmental damage. If for example, the aluminum is produced by carbon emissions, or just plain old soot and other pollution, the costs of this should be estimated and other countries which import Chinese aluminum should slap a tariff on it equal to those costs. They should also domestically tax carbon. Actually, I'd argue that you can't really tax carbon domestically unless you tax it internationally.
https://agmetalminer.com/2009/02/27/cost-build-up-model-for-...
I've seen estimates from 7-10% are labor costs.
> But this is not like manufacturing phones where labor = O(number of phones produced). Am I wrong? Why is aluminum production not almost purely capital intensive?
You still need people to handle the machines, repair the machines, perform billing, HR, etc. You don't have giant automated aluminium factories devoid of people.
> If so, it would suggest that the advantage of China isn't cheap labor costs, but either cheap energy, cheap regulations, or cheap currency.
Yes. It is more the cheap energy/regulations but the labor savings isn't 0. Aluminum factories in the west regularly have 7-9 figure environmental problems.
http://www.geelongadvertiser.com.au/news/geelong/epa-orders-...
http://www2.epa.gov/enforcement/case-summary-alcoa-inc-condu...
Besides regulation there is also the fact that China has a government where eminent domain and relocation citizens to other homes is not a problem.
If you're going to get carbon taxation, it needs to happen at consumption, because that's where you're not asking turkeys to vote for Christmas. Tax materials and products at an average rate for that product by default, but at a lower carbon-dependent rate if there is an independently verified audit trail for the environmental impact of its materials and manufacture. Effectively, a VAT or GST rate that depends on environmental impact.