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Comment by alexanderstears | Hacker News Reader

China, the biggest producer in the world

Of what? Sneakers? Its GDP is smaller than America's (though maybe not with PPP corrections).

a culture of saving a lot of money by it's citizens

Too bad the savings go to malinvestments. Good luck securing ROI from ghost cities: https://www.wired.com/2016/02/kai-caemmerer-unborn-cities/

And Sri Lankan airports: https://www.forbes.com/sites/wadeshepard/2016/07/31/china-to...

American in debt with no savings got AAA rating

The Federal Government has tremendous assets: http://business.time.com/2013/02/05/the-federal-governments-...

We could pay off the debt with a land and spectrum auction tomorrow and people would clamor for more.

I'd rather hold dollars than yuan and that's not just because I speak English.

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> Of what? Sneakers?

If trade with China stopped today, how quickly can the United States re-tool up to supply the enormous demand for PCBs, basic electronic components like SMD resistors and capacitors, microcontrollers, transformers, chokes, cables, wifi chips, antennas, power transistors, PLAs, LCD displays, OLED displays, solar modules, and the myriad other goods on which our modern society increasingly relies?

"Sneakers" is a cute little jab, but A GDP predicated on the consumption of televised football and mocha lattes is qualitatively different from one predicated on the production of goods upon which reliance the profligate NFL viewers are blissfully unaware.

At some point, even if that point is measured in centuries, the producers and savers eventually win over the gluttonous consumers. China is playing a long game with a long-term vision, securing rights over natural resources around the world, acquiring critical control over global supply chains, and artificially pegging the Yuan down to fool us into thinking that the value of passively watching Netflix is (as measured by GDP) greater than that of the construction of ever-faster pick-and-place machines.

Meanwhile, we look only to the next quarter and goose our EPS with low-interest stock buybacks, and realistically believe that mindless consumption of pixels is a more solid foundation for an economy than producing the "picks and shovels" used to deliver those pixels.

> China is playing a long game

the majority of people in the west, the US especially, thinks all china does is make cheap walmart crap. it's perfectly fine to say horrible, racist things about the chinese. nobody seems to care.

what's really happening is the chinese government runs the show and facilitates the dumping of cheap stuff into the west to manage expectations/anxiety about their rise, and to fund the real manufacturing and mineral extraction empire. if your competition doesn't take you seriously, that's a net asset, not a liability.

"All warfare is based on deception."

Boy, they really messed up at that, letting folks like DJI tool up and export high quality goods.

> it's perfectly fine to say horrible, racist things about the chinese.

No it's not. The common criticisms have absolutely nothing to do with race.

well sure, you can falsify my statement by simply not classifying anything as racism. i think the gleeful enthusiasm shown by people relentlessly china-bashing is telling, especially since they seem to do it all the time, as if they've found a loophole to freely express their hatred.

if nothing else it's a great little vehicle for racists to hop onto guilt-free.

This is a good point and reading it gave me the shivers. Let's not forget that for most of Civilized human existence, China has been the world's foremost economic and cultural power (except perhaps the Roman Empire). Chinese leaders are pretty well aware of that and yearn to put modern China back in its original place. And unlike the US, they don't have to deal with meddlesome democratic system in their march to economic and military supremacy.

US imports less than 1/10th as much from China as it manufactures.

Overall, US manufactures more stuff today than at any point in it's history. Clothing, Cars, CPU's, Candy, Cosmetics, Cameras, etc.

The DoD has done a great job of having US suppliers for every good it needs which demonstrates the US can still manufacture all critical goods independently. Even if it would have to ramp up production of various things.

As mind-blowing as it might seem the US has minimal dependence on China. In part because it exports several times more $ worth of goods ~1.3 trillion to the world than it imports from China ~0.46 Trillion.

Is any of that 1.3 trillion in exported goods a value-add on top on goods imported from China?

Generally not much simply because of shipping issues.

Components may be sourced from China, but you can just as easily source most things from somewhere else.

You listed zero sources for any of your so-called "facts".

US manufacturing output hasn't declined overall, it's just manufacturing employment that has declined. The US can make all of the things you mentioned, though it's often more expensive.

The United States is host to the most semiconductor design firms, the second most manufacturing facilities. TSMC is mostly in Taiwan and the United States; and they seem to manufacture a lot of microcontrollers, WiFi chips, and things that you mention.

Scaling up capacity for almost anything you mentioned would be a bit expensive, but ultimately not crippling.

> Of what? Sneakers?

“FROM today, China has the world’s fastest bullet trains.” 21st Sept 2017 “China on Thursday officially began the world's fastest commercial train service with a top speed of 350 kilometers per hour between Beijing and Shanghai.” Intend to export technology. Numerous articles. http://www.globaltimes.cn/content/1067646.shtml

> Good luck securing ROI from ghost cities

One year later, same author. “China's Most Infamous 'Ghost City' Is Rising From The Desert” https://www.forbes.com/sites/wadeshepard/2017/06/30/ordos-ch...

> And Sri Lankan airports – you mean A Sri Lankan airport

So what? Some infrastructure initiatives don't pan, but many do. http://www.atimes.com/article/western-contempt-china-turns-p...

China has the world's fastest bullet trains but a terrible safety record.

Sure, some ghost cities might pan out but I wouldn't hold my breath. If this were 2006, my position would be "it doesn't make sense that fat women with crappy entertainment jobs can afford luxury houses" and you'd retort "but the houses appreciated, even if she can't afford it, it's more valuable now than it was so the bank wont take a loss on it".

We'll see if the fat lady sings.

From my last link.

“Chinese companies’ share of global electronics production, meanwhile, rose from 30% in 2012 to nearly 60% in 2016, and this share will rise to 87% by the end of the present year.”

Final assembly, they still don't produce many of the components. Even though the iPhone is made in china, not much of it actually is.

> American in debt with no savings got AAA rating > The Federal Government has tremendous assets

That's interesting, because if the crap hits the rotating blades and if the US has to sell even 10% of those assets the effects on the global economy are anything but obvious

Who can pay 10trillion dollars? What's the economical effect of such a big transaction? What if there's not enough liquidity in dollars for the purchaser? Would the US accept GBP/CNY/EUR?

1. Who can pay 10 trillion Dollars: The assets aren't sold in a big package all at once.

2. The economical effect: A bunch of companies get what they pay for. This may create economic growth.

3. Not enough liquidity in dollars: We could always print more dollars

4. Would the US accept other currencies? : Who knows but most likely American Companies would buy American Assets.

GDP does not measure production and should not use as a measuring stick of how productive a country is.

US government spending is 1/3 of the US GDP. If you accounting for state and local government, the number is much higher. This level of spending is unsustainable.

No, the US government cannot just auction it's assets to the public to pay off debt. If it is that easy, the Federal Reserves can just print 20 trillions and pay it off

GDP does not measure production

Debatable. GDP probably measured production better in 1920s America than 2017 America.

and should not use as a measuring stick of how productive a country is.

If you have to compare the relative size of two economies on a single dimension, GDP is probably your best KPI.

US government spending is 1/3 of the US GDP. If you accounting for state and local government, the number is much higher. This level of spending is unsustainable.

But most of that money isn't ultimately spent by the government. The money goes to Boeing, hospitals, the elderly, etc. A lot of our GDP is ultimately spent by consumers.

I have serious concerns about America spending too much on its military and healthcare but I'd think we spend our money better than China.

No, the US government cannot just auction it's assets to the public to pay off debt.

Why not? It holds the assets, it can write titles to the assets, it can conduct auctions.

If it is that easy, the Federal Reserves can just print 20 trillions and pay it off

If you don't see the difference between printing 20 trillion dollars and exchanging valuable things for mutually agreeable prices, then I'm sure you're set in your way of defending the wise policy decisions of the Chinese Communist Party.

Government spending is just another way that the productive resources of society are funded, and that people receive the benefit of those resources.

As a thought experiment, we could lower taxes, and have the services provided by government instead paid for through private transactions. Why is this more sustainable?

>The Federal Government has tremendous assets:

Correction needed there. The value of those asset classes will fly to the bottom even if 1% of asset stockpile is sold.

The value of land and spectrum would 'fly to the bottom' if they sell one hundred billion of it?

The last spectrum auction ended with a winning bid of 19.6 billion. The initial subscription was 86.4 billion. You're telling me that 84 mhz of spectrum represents 85% of the entire world's willingness to pay for American spectrum? http://www.reuters.com/article/us-usa-wireless-auction/fcc-s...

Get real. It's worth its weight in gold.

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