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Comment by farceSpherule | Hacker News Reader

You cannot try to rationalize the prices that China charges for goods. Everything is, more or less, state-owned and state-controlled.

If the Chinese government wants to undercut an American product, they will tell the manufacturer to drop the price to X, and the manufacturer will comply.

This also does not take into account Chinese currency manipulation.

Profit or loss be damned.

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The BOM of this circuit really is very minimal because it’s a clever circuit.

It’s not without flaws (regulatory approval is non-existent for this) but they really did combine some dirt cheap components on to a dirt cheap PCB.

You, too, could assemble this circuit at scale for extremely low prices, no government intervention necessary.

Isn't the US basically the same? The US government gives massive subsidies, tax breaks or just has the military buy components for 10x the price (to offset commercial loses and R&D).

And creates regulatory capture for the rest, e.g. healthcare and big pharma ($4T a year), both of which too charge nontrivial multiples of what the rest of the world pays.

Not really. The American system of graft is more transparent. If there's a subsidy, there's a record of it. Tax breaks are public, tho there can be creative ways of couching them so they aren't obvious. Military expenditures are (with some very big exceptions) public record. And a US business under most circumstances can say "I'm not selling below cost".

None of this is really true of the Chinese system.

You make China sound like a VC,

Uber, AirBNB, etc ran at a loss to try to own the market.

The government also stands to benefit greatly if they throw their weight behind smart ideas, just like VCs. It would be interesting if the government could fund itself with investment.

VC returns are overall much worse than the S&P 500. The top firms are potentially better but that's a very limited investment pool. Softbank has shown what happens if you try the VC approach with a massive pool. Not good returns. The core value of VC has historically been due to it being uncorrelated with the stock market. That allows it to be a risk hedge for investors. The perception is that it is no longer uncorrelated so even that value is mostly gone.

The US government invests in growing the economy, or tries to, which increase tax revenue which gives the government more money.

edit: Also it's not that top VCs are better at finding investment but rather that their social capital means they provide values to companies beyond the investment money. As a result companies that are doing well which choose to take money from top VCs versus other VCs. As a result the model doesn't scale since there's a limited pool of top companies to invest in.

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