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Comment by howmayiannoyyou | Hacker News Reader

"It's better to be in a bad deal with good people, then a good deal with bad people"

China MFG was/is not a deal with the Chinese people. It's a deal with the CCP. Those of us who always understood this aren't surprised by any of this. We never expected China to be able to manage domestic risk well and we watched helplessly as they exported that risk abroad in the form of pollution, SARS, contaminated products and more. You may not be a citizen of China, but you're almost as impacted by their decisions. This is worth pondering.

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> We never expected China to be able to manage domestic risk well

Well, they have seemingly largely recovered and move their way back to normalcy, as other countries started catching fire.

I think a lot of people's takeways will be different than yours: China's ability to control crisis like this scale is going to be valuable assets to global investors.

> Well, they have seemingly largely recovered and move their way back to normalcy, as other countries started catching fire.

It's not time to start popping champagne bottles in China quite yet. They have a tiger by the tail. The country is shut down, and as they start rolling back travel restrictions it could easily blow up again. They still have well over a billion people who are vulnerable.

They just tried rolling back travel restrictions two days ago and immediately reversed course[1].

[1] https://www.reuters.com/article/us-health-coronavirus-china-...

Plus who knows if the current numbers from China are accurate. They could still be underreporting as the world focuses elsewhere, we only have the CCP to go by.

> China's ability to control crisis like this scale is going to be valuable assets to global investors.

Their ability to control the crisis is useful from a public health perspective, but they're doing it by shutting down production. Look at how the markets have responded. Are you claiming investors wouldn't have been better off if these companies had invested in a more diversified supply chain?

For that matter, having a more diversified supply chain makes it easier to implement these kinds of public health measures in general. Shutting down production is much less costly when there is another region capable of quickly picking up the slack. And making it less expensive to implement measures to contain a contagion makes it more likely they'll be properly implemented, which helps everybody, investors included.

There is a critical flaw in this thinking.

Other countries will catch the virus at some point too.

Without stringent measures, it will take more time for other countries to come back from it. In other words, China becomes safer after this.

But that's exactly why diversification works. If you have manufacturing only in China and China shuts down, you lose. If you have manufacturing in both China and Mexico and China shuts down, you manufacture in Mexico. If six months later China is back online and Mexico is in quarantine, you manufacture in China.

Having presence in multiple regions lets you keep going the whole time. Having presence in only one region doesn't.

It's easy to say it'd be great to have diversification now but it also costs more to maintain that capability every day that nothing like this is happening. If supply is not interrupted for a 10 year streak that will add up and you fall behind riskier competitors.

It depends on a company's risk profile as to whether that is tolerable.

Diversification looks great, but is not easy. It is not like software where it can be easily replicated across continent.

Manufacturing requires logistics, capability of water/electricity and skilled labour. Those are not easily scalable across the globe. And manufactures do concentrate, it is easy to source parts to make stuff from the same region.

So in a way, expanding physical manufacturing is very hard and expensive. And in case of COVID-19, it is not the answer even, since, the disruption is almost simultaneously happening globe wise, capacity planning and shifting can't be that agile to adjust, let alone the demand will be hampered too.

So, I think unless it is for megacorp that has that much of money to burn, diversification on globe scale is just a dream.

But for key industry, like medical supplies, I think that is where the state should come and play, to incentivize a domestic capacity that could chime in handily when disruption happens.

> Manufacturing requires logistics, capability of water/electricity and skilled labour. Those are not easily scalable across the globe.

You don't need fully-distributed manufacturing where everything is literally made everywhere. Go ahead and cross off every place without water, electricity and skilled labor, you're still left with dozens of countries. Now pick one in Asia, one in Europe and one in America. You're now on three continents. There are three more available if you ever feel like expanding.

> And manufactures do concentrate, it is easy to source parts to make stuff from the same region.

Which is fine, so do that, somewhere on each continent. Not in only one place in the world. Obvious strong candidates are China, the US and Germany.

> And in case of COVID-19, it is not the answer even, since, the disruption is almost simultaneously happening globe wise, capacity planning and shifting can't be that agile to adjust, let alone the demand will be hampered too.

It isn't really happening everywhere at once, though. It's happening everywhere at different times. We may get to the point where some countries have to use the same measures as China, but by then China may have succeeded in containing it and be ready to reopen. Even if it hasn't, you've still reduced the period you've been offline by the several months in between, and in the meantime have had notice allowing you to run 24 hour shifts in every other facility to build up a surplus in preparation for what may come there soon.

There are also implications to the countermeasures. The US just suspended travel with Europe. If you had a factory in Germany and one in the US, you're still in business in both places, making products for US customers in the US factory and for European customers in the European factory.

> But for key industry, like medical supplies, I think that is where the state should come and play, to incentivize a domestic capacity that could chime in handily when disruption happens.

The problem is, nearly everything is in that category. Nobody cares about where toilet paper comes from until you can't get any for six months.

Is there really a point towards economic production when a massive number (2~4%) of people would die?

I can see how the Wall Street would respond, it's understandable, but whoever says that somehow makes it a bad governmental response has already missed the point about what's really the end goal for the development of our society.

You're thinking about this backwards. If undiversified capitalists are going to lose a lot of money then they're going to lean on governments to prevent it, and sometimes the governments will cave. If all they have to do is run two shifts in one factory instead of one shift in two factories, they barely even care and you reduce the perverse incentive to do something stupid.

If one completely ignores their dangerous obsession with secrecy and its major role in the spread of said fire to the rest of the globe, yes.

Which I don't disagree.

However, such virus already exists in the wild, though the chances are there, it can jump to human anytime in the future regardless of national boundaries.

We should all be prepared but developed nations have a much smaller interface with the natural world meaning this kind of crossover is less likely, and many developing nations have a smaller global role meaning it won't spread as easily (see Africa & Ebola). I think China is somewhat unique here.

This is an excellent point.

I've experienced living in a small, developing nation for years, and while they have the same dangerous mixture as China of live animals (and the associated excretions), dead animals, produce (unwashed, washed, and already skinned for consumption all available from the same table), fertilizer of human origins, farming supplies, pesticides, medical products, hygiene products, clothing, food transport, food storage, food preparation surfaces, cutlery, dish ware and dining surfaces all overlapping to alarming degrees (often sharing the same surfaces at different times), they don't have the potential global role, both based on their size, relative lack of population, lack of foreign travel and foreign entanglements, and so on.

Inadvertent power projection from a biological perspective is an interesting concept.

Edit to add: I can't judge the people working in these markets and offering products under horrendous conditions. They're trying to feed their families. But China needs to get serious about public health if it hopes to improve its reputation, which is roughly the same from Tehran to Toledo with some justification.

Regardless of where lines are draws on maps, yes. Regardless of a whole host of other factors, not at all.

This particular pandemic was entirely avoidable in the first place. Food markets in developing nations frequently cause local health problems, and have all the ingredients to make a global one (as it seems to have in this case).

https://en.wikipedia.org/wiki/2009_flu_pandemic -- North America, .7 - 1.4 billion affected, 150,000–575,000 died.

COVID-19 may be from China, but a pandemic can come from anywhere and will come again. You can taking chance on its virality/mortality.

The likelihood of it coming from any particular country is not evenly distributed, and there are reasons behind that uneven distribution.

To be fair, they seem to be handling this crisis better than we are so far.

How many whistle-blowers trying to alert the public to this disease did the US government throw in prison?

eh, the US doesn't exactly have the greatest track record on whistleblowers...

It does when "whistleblower" means "independent person publishing data from independent sources".

The US has a crappy record on people who leak government data, but that's an entirely different thing.

..and I'm in no way suggesting that the US has a good track record on whistleblowers. I'm simply saying that it's a major stretch to argue that China has done a better job managing the Coronavirus outbreak given all of the reports of suppression that we've seen come out of there.

They created this crisis by silencing whistleblowers and hiding case numbers. Don't forget they banned wildlife markets during SARS, but allowed them again a year after. This is going to happen again.

Sure, but the U.S. is actively discouraging/thwarting testing efforts, because ~the economy~. And our chief executive is disseminating misinformation (whether out of ignorance or ulterior motives is unclear).

I'm not saying China did a great job. But they seem to have gotten a handle on things at least, meanwhile we've yet to even really start preparing. And we have the advantage of hindsight, which they didn't have.

> they seem to have gotten a handle on things at least

According to the Chinese communist party.

They can fudge the specifics, but I highly doubt they could hide the fact of whether or not it's continuing to explosively spread across the country.

And how do you account for the fact the US have been known this virus for a month since the Chinese outbreak, and still does very little to prepare for basic things like testing?

They did a horrible job in the beginning and a good job in the end. They wasted december and january (both for themselves and the world) but the february response was quite effective. https://medium.com/@tomaspueyo/coronavirus-act-today-or-peop... is an informative illustration.

Right now, the USA response is somewhere between those two China approaches but it seems that it has been closer to the "early China" response than to the "late China" response.

I'm pretty sure when those officials decided to silence the whistleblowers, they are thinking exactly what some of the US officials are thinking right now: "Just another flu."

By imposing a draconian lock down on all citizens (even those who havent tested positive)? I guess...

Yes, one that was _extremely_ effective.

Personally, I wouldn't want to sacrifice my liberties to a PRC-style quarantine, but to insinuate it wasn't an astoundingly effective way to control the spread is false.

Just like Italy started doing now, and everybody else will in the coming weeks.

>To be fair, they seem to be handling this crisis better than we are so far.

"seem" being the operative word. You only know what the CCP wants you to know.

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