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Comment by dreamfactored | Hacker News Reader

1. These are foreign-owned infrastructure platforms and China is protective about its markets. Foreigners can't set up businesses of any kind, let alone infrastructure.

2. You seem to assume the bulk of innovation is going to be happening outside China and that blocking consumer access to Western platforms would somehow inhibit a flow of information to China. I'd disagree on both counts. The Chinese government is acting as the word's biggest VC and is also very practised and willing to take on long-term transformation plans at the national level. Shutting down foreign platforms only drives adoption of home-grown ones. In addition, they are explicitly targeting a future position as the world leader in AI. In the West I'd be betting on the MIC over individual privately owned companies to put any kind of dent in that ambition. I think any moment where Apple or Google alone could outspend and outcompete China in tech is gone.

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This has little to do with China and innovation. The problem is mostly economical. China probably wants Chinese clones, clones that are incredibly valuable and based in China. All the wealth generated therefrom stays in China. That's it, it's likely an economical manipulation. And frankly, from an economical standpoint, well-played. (Hope I don't get downvoted to hell!)

Not far from mercantilism: https://en.wikipedia.org/wiki/Mercantilism

I don’t understand the lack of reciprocal tariffs introduced by the US or are there some I don’t know of?

This is probably the economic equivalent of banning say mobile phones or some other large and important sector.

I think a lot of people feel the same way and it somewhat feeds into the Trump phenomenon.

For years the thinking has been that China is liberalizing, and it will eventually open up and that reciprocal sanctions or tariffs will spark unnecessary protectionism and encourage China to reverse direction.

A lot of people now, after 20-30 years of similar behaviour, believe that China was just gaming the system all along and had no plans to liberalize politically or allow fair competition from foreign business. Trump certainly tapped into that (although I think there's some consensus that punitive tariffs still won't be useful).

I think it's a case of wage normalisation. The salary and cost of living differentials between the West and Asia are narrowing incredibly fast. That's going to cause a lot of dissent amongst Western populations, particularly as those downward wage pressures are creating the kind of insecurities and job competition that the wild east is long accustomed to. The real consequence of fluid global trade is a global normalisation of living standards - you could say the first world is finally sharing and taking a hit in return for smartphones and cheap clothing.

Punitive import tariffs don't work as punishment. They convert a portion of the consumer benefit from trade into taxes, a portion into domestic producer benefit from trade, and throw the rest away as deadweight loss. The foreign producer-exporter is barely even scratched. It's just an excuse to grab money from domestic consumers using another country as the scapegoat.

every tax ever conceived is ultimately always paid by the consumer, yes. The point of such a tariff is however to increase the price of the foreign product, essentially giving local competitors a price advantage.

Inaccurate. Taxes are usually shared between consumers and their trade partners, and the relative burden on each is determined largely by price elasticities in the supply and demand curves. Generally speaking, the more sensitive consumers are to changes in price, the more the tax burden is shifted to suppliers.

In the case of an import tariff, it is paid entirely by consumers, and domestic suppliers get a windfall from it, rather than sharing the burden. That's because there are two supply curves in play, domestic and international, and only one demand curve, because consumers generally don't care where the goods come from, and the internal trade of foreign markets is ignored.

This doesn't work so well when your entire manufacturing industry explicitly relies on chinese production. Everything from debt to infrastructure has some dependency rooted in China. This is the whole point. Increase reliance on china for just about everything and it makes the idea of counter tariffs next to impossible.

The clone theory was correct while China was a low wage economy. But it has ceased to be the case quite recently (obviously the future is not evenly distributed, particularly in such a diverse and rapidly expanding economy - so you will still see copying for years to come but this doesn't represent the strategic direction). As I've pointed out elsewhere, China in fact has no option but to compete via design and innovation, just as the US, Japan, and Korea have done during their economic developments. 'Made in Japan' for example used to be the signifier of a cheap shitty knockoff - that seems extraordinary to most millennials today.

As for sharing knowledge goes, China has sci-hub.io and westerners get to pay $35 a paper.

Why can't westerners use sci hub? Civil disobedience is much more tolerated in the west.

1. My question was rhetorical. It was in response to someone saying that apps outside of China are unimportant and small.

2. No single country has a monopoly on innovation. Consequently the sharing of ideas from different locations and cultures is really important for moving forward. You miss out on this benefit when you consciously work to block it. Historically, the last time China was this arrogant about isolation, it didn't turn out too well.

Last Update: I've wasted enough time on this and probably should have put this in my original post.

If you think of sharing data as a resource, China just made it artificially scarce, made it extremely slow, and made it really costly which makes total business sense in the Information Age /s Hopefully our governments won't follow

China's not blocking out the sharing of ideas though. Until a few months ago, Andrew Ng worked at Baidu!

They are isolating data, but hoarding data is a competitive advantage in a way that isolating knowledge isn't.

> China's not blocking out the sharing of ideas though. Until a few months ago, Andrew Ng worked at Baidu!

Ok they are bottlenecking data... As I've already mentioned this is an extremely inefficient way to share data. Sharing data using physically present word of mouth is a lot more expensive and slower than sharing it instantly via an open internet connection.

Is there any indication that scientists predominantly use whatsapp, so this would block innovation? When you say "this is an extremely inefficient way to share data", what do you mean? It's not like China doesn't have its own messengers, and it's not like whatsapp is the only way for people to communicate over the Internet..

You commonly hear scientists complain that they spend a lot of time trying VPNs and working around the latest crop of GFW restrictions, yes. Whatsapp isn't the only limited thing in China.

Peak Hacker News

"Sharing data using physically present word of mouth is a lot more expensive and slower than sharing it instantly via an open internet connection."

If stating obvious facts is "peak Hacker News" then that's good, isn't it?

as long as circumlocution is valued.

I've read that circumlocation is cheaper and faster.

Last I heard academics had started getting filtered internet connections too, and were finding it hard to collaborate with non-Chinese academics as a consequence.

Any effective government will rightly 'isolate' itself from this kind of pollution - http://www.slate.com/articles/news_and_politics/interrogatio...

> Foreigners can't set up businesses of any kind

Foreigners can set up businesses - see for example, the WFOE [0].

There are restrictions however for certain fields and business activities (infrastructure being one), so while foreigners can't just set up any company, they certainly can set up some companies if they like.

0: https://en.wikipedia.org/wiki/Wholly_Foreign-Owned_Enterpris...

Thanks that's very helpful actually as I may well be doing this in future. My experience was from being told by Chinese that it was JV all the way and with O'Reilly having to use 3rd parties but thinking about it publishing would obviously be sensitive...

Yes, publishing is strictly regulated, and I'd imagine you'd need a JV for any sort of traditional publishing.

This right here. China has twofold. Mass expansion to increase other countries' reliance on the Chinese (whether this is debt, infrastructure or manufacturing), in addition to closing off to foreign companies. Foreign companies can not be completely monitored like internal companies can be.

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