Comment by tw04 | Hacker News Reader

Comment by tw04 | Hacker News Reader

Parent Full thread

>2. raised the local price to monopoly prices, creating a great reward for the first local manufacturer to achieve parity.

The government was both going to demand, and fund local companies creating a competing product and was already doing so long before sanctions arrived. Nothing about the sanctions sped up the process in the least. The Western sanctions had almost 0 bearing on accelerating local chip production, but it did do a GREAT job of limiting their ability to buy the hardware required for advanced fabrication.

You also seem to have a belief that a "monopoly" in China is anything remotely like the West. It's not a free market, if a company in China tries to gouge the market or take it in a direction that's not approved at the expense of what the party wants, their executive leadership will quickly find themselves on the outside looking in (if they're lucky) or sitting in a jail cell if they aren't. See: Jack Ma

Semiconductors were core to the "Made in China" strategy the party was pushing in 2014...

https://www.mckinsey.com/industries/semiconductors/our-insig...

> The government was both going to demand, and fund local companies creating a competing product and was already doing so long before sanctions arrived. Nothing about the sanctions sped up the process in the least.

Whatever encouragement or pressure the Chinese government was applying was insufficient to get manufacturers like Huawei to switch to domestic suppliers. Chinese companies still worked with established companies like TSMC, until forced by US sanctions to switch to worse domestic alternatives.

If sanctions are so effective the CCP could just do the same thing to themselves via a trade ban on imported goods.

> CCP could just do the same thing to themselves via a trade ban on imported goods.

They could, but a domestic trade sanction, just like foreign sanctions, would guarantee at least near-term damage to Chinese companies.

Domestically, Beijing would be seen as the responsible party for the resulting economic damage, causing resentment towards the government, with no actual guarantee of self sufficiency. Companies, in general, do not care about having a domestic supply chain; they want to increase profits.

Internationally, other countries would also see China as the initiator of the conflict, and those that are negatively affected may want to respond with sanctions of their own, escalating it beyond what Beijing intended.

The risk analysis is different between foreign sanctions and domestic sanctions. In the end, the Chinese government was not prepared to take that risk, but the American government was.

I have some good news - you suggest that the Party will step in if there is gouging or an independent direction being taken - that is to the advantage of China's competition.

One of the reasons groups like the USSR or Serious Communist China ended with everyone starving is that there is literally no known method to determine the correct price without mass signalling through a free market. Ditto what direction "should" be taken - the only known method is 10s of companies (ideally with funding weighted by what clever investors think is likely to work) where 9s of them fail and a selection succeed.

China isn't getting where they are because the party is helping. If anything it is the opposite, the party must have some capitalist incubators where they are holding themselves back from interfering all that much, otherwise the whole thing will collapse at some point because some bureaucrat refuses to believe prices were set too low until the shortages starve millions to death.

> Serious Communist China ended with everyone starving

This is certainly a claim, let's see how it stands up against the historical record (as from wiki): 1961: Last famine in the PRC 1966: Start of the Cultural Revolution 1976: Mao dies

I'm having a bit of trouble reconciling these, but if you've got some arguments explaining why the Cultural Revolution was after the end of "Serious Communist China" I'd be interested.

I agree. Communes were only privatised in the early 1980s, and I think that is a better marker for the end of communism in China.

https://en.wikipedia.org/wiki/Household_responsibility_syste...

> One of the reasons groups like the USSR

The 'USSR' starved in the 90s after the fall of communism.

> Serious Communist China ended with everyone starving

Oh this nonsense. Serious Communist China had to deal with nuclear threats from both the US and the USSR. Serious communist china tok a back water colonized nation to a nuclear power within a single generation.

> there is literally no known method to determine the correct price without mass signalling through a free market.

You have it backwards. 'Free markets' led to 'starvation'. That's why we, in the US, have farm subsidies. A form of 'price control' along with many other measures. There is no nation ( especially a major ) on earth that has a 'free market'. There was also never a time when we had 'free trade' either. I'll let you figure that one out by yourself.

Every industry, from housing to oil, has price controls on them. It's all a matter of the degree and levers used.

The same idiots who praise government subsidies to build up our own chip industry are whining about 'price controls'.

See, policy like this I wish we had in the U.S., where the government controls industry, not the other way around.

Reply on news.ycombinator.com