China is the manufacturing superpower
cepr.org
cepr.org
> https://antidumping.vn/eu-chinabike-duty-hits-indonesia-mala...
I come from a country that does this. Massive deficit with China vs. an equivalent surplus with the EU. Weak manufacturing base that essentially import Chinese, does some packaging and then export it back.
Large companies are well aware of this and happily use their existing Chinese suppliers' SEA entity to avoid sanctions and tarrifs, or to show that they are moving away from having everything Made in China.
To be fair, only gullible or naive people could truly believe that products coming from any part of Asia are not made, controlled, or otherwise influcnced by the Chinese.
That last statement makes it almost meaningless. Then you can also say, no product on this world was made without US influence. Otherwise all those countries like Vietnam do have a agency of their own (Vietnam for example even succesfully fought china before with military)
And south korea and Japan (and Taiwan) also are somewhat out of the direct control of china.
In my experience, no, companies are generally not aware and not accepting of this and brands/licensing requirements ensure that's the case. For sure in regards to valuable trademarks.
A manufacturer would absolutely not want to risk their entire business. And that's all it takes for a brand to pull your license. Now what? Everyone is fired and a $120M contact is lost over a few cents per unit.
It's possible that it happens as Chinese factories skirt the rules and make false presentation, but manufacturers spend a lot of money to send someone to many countries and factories to trial and vet them over the course of years to meet brand requirements for licensure before they begin manufacturing with them and often through repeat checks during the manufacturing process. But I'd say that's rare, again, in regards to branded goods of valuable trademarks.
IIRC, a lot of stuff that's labeled "Made in Singapore" is/was basically that.
I'd not be surprised if this activity is quite limited in Singapore given that they have been under a tight microscope lately. Money laundering used to be their business but now they are rich and make money "legitimately" and within the "international" framework.
"However, new research from Harvard Business School and Duke University paints a more nuanced picture — rerouting appears to be lower than is imagined.
While trade rerouting through Vietnam does occur, its scale appears far smaller than previously thought. The study found that in 2021, about 16.1 per cent of Vietnamese exports to the US — roughly US$15.5 billion — could be classified as potential rerouting when analysed at the product level. But when the researchers examined individual firms — tracking specific products flowing from China through Vietnam to the US — the figure fell to just 1.8 per cent, or US$1.7 billion."
https://fulcrum.sg/vietnam-china-and-rerouting-when-percepti...
Of the items that are rerouted, does Vietnam (or other similar countries) tend to move up the value chain over time? Or do the supply chains just stay as they are.
I suspect, possibly hopefully, that over time the "rerouting" countries would evolve from simple assembly/repackaging to sourcing more granular pieces of the manufacturing process from within their own borders. How fast that might happen is another question.
If anyone has any sources on this I would love to read more about it, I'm just not sure how to find them.
Another example is the iPhone reading made in China with a dollar value of 400 but the true value add in China is much lower as all the IP, profit margins, and high value components belong somewhere else.
This means that even though these numbers look very unbalanced it is still Western companies that make biggest part of the profit. (At least so far though things are clearly changing with Chinese companies are climbing up the value chain.)
It is still running on Apple platform. I'm buying an iPhone, because I know that I'll get consistent Apple experience that is same across all of my devices, unlike zoo of Android + Windows/Linux.
> Nobody cares about their operating system except for that one middle aged developer who loves that his apps look native on his macbook.
Nobody* cares.
* - 34% desktop share and 15% worldwide.
How does that follow? I'm saying people buy Apple products for their premium hardware, which rich consumers are more likely to do across all categories. If software mattered, Apple would be losing customers across the board because people spend more and more time in non-Apple software. It's the exact opposite of my claim.
>* - 34% desktop share and 15% worldwide.
I don't think you even understood what I said to be frank, I didn't argue Apple's marketshare, we are talking about where the value in their poduct is, I didn't argue that people dislike their products.
a buggy shitty mess? count me in!
Things aren't even consistent across mac os updates. I think it's much preferable to keep a phone a phone, and the computer a computer.
I only want a macbook because of the hardware. I'd give anything for them to fix the software. but it is what it is.
To be clear, as an f’ing Linux user, the things that make Apple software good, which is consistency, lots of hand holding, and making it really hard to break things badly, are irrelevant to me.
But it’s highly relevant to the vast majority of iPhone users in the world.
I doubt Trump tariffs will be based on value add. It would be a logistical nightmare, and he doesn’t strike me as someone who thinks too deeply about these things.
The root issue is the unchecked market power of businesses and the complete lack of repercussions for corporations and business elites that destroy industries, social systems, and deplete natural resources—without accountability for long-term consequences.
Don't think of corporations as having agency. Think of them like beasts that have to be herded into the field where you want them. If all your cows are in the neighbor's field, it's not the cows that you should blame and yelling at the cows is not going to help you.
Governments, too, create regulatory, taxation, and broader economic frameworks that influence incentives and shape behavior.
People say things like "corporate profits are too high, we need to tax them more" but the actual reasons corporate profits are high are lax antitrust enforcement and regulatory capture and the proposed tax increase would apply predominantly to domestic businesses, increase the incentives for offshoring and create even more advantage for large international corporations. But tax increases are popular in Washington because then they get more money to transfer to cronies, so it keeps getting proposed as a "solution" instead of solving the actual problems.
Higher taxes for the absurdly rich/corporations could be a good start if the money was put to good use, but taxes ultimately don't solve the underlying issue.
I agree that the core issue is antitrust policy -- and it doesn't have to be this way and wasn't always like this. After the Great Depression, antitrust enforcement ushered in an economic golden age during the 1950s and 60s, boosting prosperity across all socioeconomic groups and lifting lower-income groups the fastest by enhancing competition and preventing concentrations of market power.
Later, regulators embraced 'trickle-down economics' and 'corporate efficiencies,' enabling the rise of giant firms that overpower governments and laws. This shift has led to historically low profits, stagnant growth, declining productivity, and soaring income inequality.
Now the rules-based systems have been co-opted by these giant firms that exploit their market power to subvert democracy and shape laws to serve their interests (and further entrench their undue influence) at the expense of society.
I think this is missing a piece.
Corporations and the government are together as a corrupt system (_______ industrial complex etc.) and then people get mad about it, but many of the problems are structural (i.e. insufficient checks and balances against corruption) so you can't put the blame on any specific person or just replace one evil CEO or Senator and be solved. But that's what people want -- a personified enemy to fight, a simple solution -- so it's what demagogues offer them. They tell them to blame the CEO because it gives people a target for their ire, when the actual problem is that you have to change -- and in order to do that, first understand -- the structures that led things to be this way.
But most people don't have time to read a thousand page healthcare bill to figure out just what's in it that causes things to be this way, so when some talking heads tell them to be mad at the CEOs, they get mad at the CEOs. Which doesn't fix the problem, and that only makes them even madder.
> Afterwards, I worked at the intersection of data science and antitrust law to support collective action litigations.
I'm increasingly of the opinion that employer-based labor unions are useless.
When the employer is in a competitive market, the employer already has little to give in negotiations because the competition is already forcing them to give anything they don't give to labor as wages to customers (i.e. also labor) as competitive prices.
When the employer is a monopolist, at best the union is going to extract part of the monopoly rent, but not all of it, and the monopolist's customers who aren't also employees are still getting screwed. Meanwhile that union then has the perverse incentive to defend the monopoly rather than trying to destroy it, because they're getting part of the monopoly rent, which is a disaster.
Conversely, suppose that local land owners are conspiring to capture zoning boards to keep housing prices high and screwing over local laborers who then can't afford to buy and have to pay high rents. Is unionizing the property management companies going to solve this? Of course not, they wouldn't even be representing most of the people being screwed over and their expected behavior would be to try to negotiate higher wages for the property management employees etc. rather than advocating for zoning reform.
Which hints at what people should be doing instead: Political organizing. Not for a party, but for issues. Get all the tenants and the would-be homeowners who are stuck living with their parents together to pay dues to an organization to oppose politicians who resist zoning reform. Get them out of office. Publish voter guides and use the dues to buy political advertising. Do the same thing for trust busting and getting rid of certificate of need laws etc.
Because that's the problem. Monopolists and the corporations siphoning tax dollars out of the corrupt government are doing this, and you're not.
But the harsh reality is that creating a regulatory, taxation, and broader economic landscape attractive to manufacturing would inevitably threaten elites and firms at the top of the economic hierarchy. While there’s nothing wrong with that -- in fact, it’s likely healthy for the economy -- it won’t happen[1]. Those elites and anticompetitive firms abuse their undue influence to subvert democracy and shape laws in order to further entrench their market power.
[1] Or more precisely, it won't happen soon. It's pretty clear that the era we're in is coming to an end but change will likely be slow unless there's a surprise shock to the system.
Apple also has a factory in Brazil that makes most (all?) of iphones and ipads sold in Brazil. Most appliances companies (Bosch, Eletrolux, etc) in the local market also do the same.
I'm no expert and of course I have no clue if it even makes sense to measure per-capita manufacturing share, and also assume a lot of other factors matter here - what kinds of things we're manufacturing, how much those products serve domestic versus export markets, etc - but it's still surprising
Ironically this will make Taiwan the manufacturing superpower if it is calculated per-capita. Which is the other china (I am just referring to the history of both PRC and Taiwan claiming to be the historical China successor).
And the claims that US manifacruting is down is correct because it used to be much higher percentage wise from the world total manifacruting power. China was only about 3% when people who are now 30yrs were born. That's massive increase in manifacturing share. There is a discussion about domestic vs export in the study too that you might find interesting..
Semantics, but the ROC (Republic of China) claims Taiwan, along with the mainland and Outer Mongolia. It isn’t the case that Taiwan claims the ROC (although if the in power DPP decided not to be the ROC anymore, the PRC would probably invade since declaring independence from the ROC would be the same as refuting one China).
When the ROC/KMT retook Taiwan in 1946, they weren’t exactly seen as liberators. And when the KMT and a bunch of rich mainlanders relocated there in 1949, there were protests, genocide, and so on.
America was the world's factory for over a century. This dominance only ended around 2010, when China took the lead. It was our advantage to lose, and it was the result of deliberate political action. We offshored manufacturing, and treated China as a good faith trading partner, waiting decades for a cooperative international trade diplomacy that has not materialized to this day. All the while Beijing did everything in its power to enrich the Chinese worker, no matter the cost to outsiders. The results speak for themselves.
In fairness, during this period, the US did everything it could to suppress the wages and benefits of its own manufacturing workers.
Recall that the first rounds of manufacturing outsourcing were to US states with non-existent labor protections, mostly in the South.
I keep seeing these statements on here and they're utterly misleading. Protectionism is a spectrum. It is practiced by every single country. It's a very bold assumption to make that if every country would completely eliminate everything resembling it, this would benefit everyone. The opposite is very likely. There are numerous cases of protectionist policies where the country instituting them very clearly benefited from them, even in the long run. I have spent more than a decade in two countries, each having been on a different part of the protectionist spectrum since many decades ago. It is clear as day that the more protectionist one has, throughout, continuing to this day, seen very large benefits from this policy, larger than the benefits from the less protectionist country.
We really need to stop propagating this myth among the educated in the West, it's just as harmful as "trickle-down economics" used to be before it became common knowledge that it's a fairy tale.
I would personally like to eliminate allocations of resources that put me out of business and wreck the country.
>It is good for any particular set of parties insofar as it hurts some other set of parties more than themselves.
There's a huge misunderstanding in here somewhere. Most people don't think of their own welfare in terms of a negative outcome for anyone else. It's not necessarily a zero sum game. People can coexist and duplicate effort, and that sometimes makes sense. An individual or nation should strive for some reasonable level of self-sufficiency, because you can't always rely on other people to treat you well or take care of you.
Let me put it another way. Your comment suggests some kind of state of maximum efficiency in which the best producer can be charged with production in a monopolistic fashion, and that would limit the amount of resource usage and toil for everyone. In an ideal world with zero possibility of conflict or other externalities like tsunamis, volcanoes, extreme weather, disease, etc., along with perfect foresight of each monopolist, that makes sense. However, we do have possibilities of disruption that make redundancy beneficial. A monopolistic structure can also grow stagnant. With more competitors you have more chances for good ideas to break through. There is a cost but it is essential to maintain some competition and redundancy across geographic and cultural bounds even if it is not the absolute mathematical minimum resource solution. This redundant effort also helps the labor market by giving people something meaningful to do that might otherwise be unmarketable.
My idea of instituting duplicate effort requires support from a lot of people, because it's not free of cost. But I think it's the right way to manage society.
Only in a risk-free/non-probabilistic world.
To be clear, 'my freedom ends where your begins' is a way to simplify and summarize an approach to the theory of rights. The point of bringing it up in this context was to point out that there is an equilibrium between opportunity spaces of different actors. In other words, as long as we share the universe, we can't do expect to do literally anything (to other actors or their property in particular) without reprecussions, because any justification for it would be inconsistent.
So would travel agents, real estate agents and car dealerships.
Just because a change in allocation of resources or production would end businesses / jobs doesn't necessarily make it a bad thing.
I'm not arguing whether this specific policy is good or bad, but mainly that the argument don't do it because "it would cost jobs somewhere" doesn't mean something is a bad policy. Just about every change in the economy costs jobs somewhere. The question is: Does it create more jobs (or higher standard of living) in other places to make up for it?
Yes, but these people also provide good services. I think car dealerships might be the best bad example out of these because car manufacturers don't deal directly with customers. However, I think the fact is that the manufacturers who set it up like this don't want to deal with customers, and they establish dealerships that agree to a certain quality of service that the manufacturer wants associated with their name. Car dealers are explicitly authorized to negotiate prices with customers, which can go either above or below MSRP. If the manufacturer was selling directly to you, you'd probably be stuck with ONE price which might not be the best one. All three of the cases I quoted here can be viewed as a form of optional delegation that usually benefits the producer, the consumer, or both.
If it can be proven that there is a better way to allocate resources (especially on a micro scale), that way should not be categorically banned. But at the international scale especially, you need to be careful.
>Just because a change in allocation of resources or production would end businesses / jobs doesn't necessarily make it a bad thing.
Yes a handful of unimportant ones here and there doesn't have to be so bad. But if strategically important businesses and jobs are eliminated in an allegedly sovereign region, that is usually a bad thing (proportional to the size of the region). If too many of the less important jobs in a region are eliminated or challenged, that puts stress on the people which is also a bad thing.
>I'm not arguing whether this specific policy is good or bad, but mainly that the argument don't do it because "it would cost jobs somewhere" doesn't mean something is a bad policy. Just about every change in the economy costs jobs somewhere. The question is: Does it create more jobs (or higher standard of living) in other places to make up for it?
I think this question only makes sense if you're talking about a relatively closed, cohesive system like a sovereign country. "Higher standard of living" is not the only metric that needs to be optimized (at least as it is commonly defined). We need to have a resilient country to the extent that we can. That might mean paying extra costs to support our native businesses, or accepting somewhat worse products in some cases. For example, you personally could cut or reduce most of your insurance and stop saving for retirement. That would put more money in your pocket every month that you could use to buy cool stuff. That might be interpreted as a higher standard of living. But is it wise? This is not far from what we have done on a national scale, driven by globalist policies and profiteering.
No, this was not what the manufacturers wanted. States set up franchise laws to prevent car makers from directly selling their cars and they generally are not viewed as benefiting the producer or consumer:
>...Economists have characterized these regulations as a form of rent-seeking that extracts rents from manufacturers of cars, increases costs for consumers, and limits entry of new car dealerships while raising profits for incumbent car dealers.[2] Research shows that as a result of these laws, retail prices for cars are higher than they otherwise would be.[2] [3]
https://en.wikipedia.org/wiki/Car_dealerships_in_the_United_...
It might be like that, or it might not. Maybe the car manufacturers take a public view that's different from their private view. Why would a state demand extra hurdles that cost its residents more money? Could it have anything to do with creating barriers to entry for other manufacturers to sell their cars in that state, basically making it difficult to buy a car that isn't part of an established brand?
I think manufacturers actually vary their opinions sometimes. If they are new without many resources, they might prefer to sell direct to customer. If they are mature, it could be looked at two ways. On one hand there is a lot of work to do in order to sell and support the vehicles that can't be done in a centralized fashion. They can afford to do the work themselves by setting up a bunch of dealerships all over the country. But it is questionable whether the manufacturer can actually do it cheaper than the individual dealers. As for this:
>Research shows that as a result of these laws, retail prices for cars are higher than they otherwise would be.
There are three points I have for you to consider. For one, is it possible for people to get service from dealerships that provides value that is hard to appreciate? For example, they can fix issues quickly without shipping the car off, develop relationships with customers to help them fill their needs, do trade-ins (how would that work when dealing with a manufacturer directly?), or any number of other things that we know they do for customers. Secondly, how is this research conducted if car dealerships are mandated by law? Finally, if the manufacturer takes on the dealership role, it has to bear basically the same costs as the independent dealer. So where is the actual savings going to come from? Do you think you can negotiate with a factory outlet to get a better price?
Here's another thing you might want to consider. I know it's going to sound crazy, but in some cases people are served better by allowing prices to fluctuate. How? Well, the people more willing to buy a particular car (with a supply constraint) are willing to pay more, and that is only feasible if the seller has scope to negotiate. If there is no scope to change prices then the cars just go out with equal priority, possibly depriving someone of their dream car while someone else who appreciates it less is the one who got it first. The individual sellers on the other hand have varying supplies of cars from the manufacturer. There are similar benefits to the individual dealers in having that flexibility, although that doesn't matter in the question of whether or not independent dealers should exist.
Maybe without the government forcing the manufacturers to go through 3rd party dealerships, they would still use them, but how about removing the laws and see?
>... Why would a state demand extra hurdles that cost its residents more money?
As the wikipedia article points out, this is really a textbook case of rent seeking. This is not what I would consider a controversial opinion.
Rather than hypothesize reasons why the current system is good, maybe first read through the 2 links referenced in the wikipedia article:
https://www.aeaweb.org/articles?id=10.1257/jep.24.3.233
https://www.justice.gov/atr/economic-effects-state-bans-dire...
Note that the second paper is written by the anti-trust division of the Dept of Justice.
I actually read a pretty good reason not to remove these laws a while ago (and it is tangential to the argument about pricing that I made a while ago): It is impossible for independent resellers to compete with the manufacturer. This actually happened with Teslas: when Tesla dramatically lowered its prices to get more money, it effectively destroyed the used market and took money out of the pockets of anyone else who had used (or even basically new) inventory.
This kind of thing happens with other products too. For example, you usually can't buy a book from a publisher for less than the list price, because they don't want to undercut their distributors who are incurring significant costs to stock the books for them. (I think Amazon also requires companies that sell on Amazon to not undercut them by selling for cheaper elsewhere, despite the fact that their fees are high in some cases and they can even sell stuff for a loss.) I think the equivalent courtesy for car dealers would be that the manufacturer would be forced to pick a price and stick to it, at least at the wholesale level. That way, any independent dealer who does buy inventory can be assured that they won't face huge losses if the prices are cut upstream.
Finally I guess there is the question: do we really need the independent dealers, if the risk is all about the manufacturer cutting prices? We do, because these dealers make the market more efficient. That competition means you can shop for the best price or time window when buying or selling, without using Craigslist or classified ads. Dramatic decreases in price also affect owners and finance companies (in case of default). If the manufacturer can just decide "Hey we need to pump out a Porsche for everyone in the world" then they won't be worth what the original buyers paid, and they might walk away from the loan to buy a new one for half the price.
Yes, those who manipulate the legislature to do rent seeking, might lose those profits when the law is removed. That is actually a feature, not a problem.
>...We do, because these dealers make the market more efficient.
Again, independent economists and the Dept of Justice don't agree with you.
As I said, independent dealers provide liquidity to the auto market. When there is only one buyer or seller in any other case, we call it price gouging or price fixing. Additionally, the "extra profits" or savings (in some cases) actually do contribute to maximum satisfaction of consumers. For example, if the only dealers were run by manufacturers then they could unilaterally decide that cars over 5 years old will never be repurchased, dooming those deals to private transactions with zero warranty, or else second-tier used-only retailers.
>Again, independent economists and the Dept of Justice don't agree with you.
Again, appeals to authority do nothing for me. You can probably find at least someone in the DOJ to adopt any opinion you like in any case.
Having one buyer or seller of a product or service is neither called "price gouging" or "price fixing".
>...Additionally, the "extra profits" or savings (in some cases) actually do contribute to maximum satisfaction of consumers.
There is really no evidence of that. (The basic concept of rent seeking is covered in any econ101 micro textbook.)
>...For example, if the only dealers were run by manufacturers then they could unilaterally decide that cars over 5 years old will never be repurchased, dooming those deals to private transactions with zero warranty, or else second-tier used-only retailers.
What a strange idea.
>...Again, appeals to authority do nothing for me.
No, that wasn't an appeal to authority.
If you want to be technical, yes. But the two go hand in hand. We have laws to promote competition and the law requiring manufacturers to not sell directly to consumers is one of them. Even if this is technically rent-seeking, it isn't very bad.
>What a strange idea.
It may sound strange but manufacturers have a tendency toward planned obsolescence. They make things to wear out in obnoxious and expensive ways, and restrict access to parts, so far as the law will allow. Nevertheless resale value is important for cars, independent dealers improve market efficiency and the liquidity of cars, etc. I believe manufacturers would abuse their position as exclusive dealers of their products. Tesla sure has.
Regarding tariffs on China exports, the relatively fortunate position for the US is that the biggest components in consumer inflation index such as food, housing and energy are all either largely domestic produced or not dominated by China, which gives more room for the US to react. But the tariff could still harm the gross margin of the international enterprises and even SMBs, who are facing the immediate pressure of adjustment during the trade war.
For example, the 51% requirement does not apply in most industries any more. It was a transitional measure as China opened up its economy to foreign investment, to prevent foreign companies from instantly taking over or outcompeting every Chinese company. But that measure has been rolled back over the years, and now only applies in particular industries. Tesla 100% owns its operations in China, as do more and more foreign companies.
Many people in the US and Europe are operating with a mental picture of China that is decades out of date, or which is even just wrong.
I would like to know where you saw this. Not to be a jerk but I've never heard this and I'm more informed than most.
>Tesla 100% owns its operations in China, as do more and more foreign companies.
Tesla is the first one to have that arrangement. https://en.wikipedia.org/wiki/Gigafactory_Shanghai What about this? https://asia.nikkei.com/Spotlight/Supply-Chain/Tesla-cars-fa... Keep in mind, producing Teslas in China is not the same as selling them in China. They can mandate Tesla to export 100% of the cars at any time if they feel it threatens the local industry.
>Many people in the US and Europe are operating with a mental picture of China that is decades out of date, or which is even just wrong.
Many people are also operating with an overly optimistic and romanticized picture of China that was never true to begin with.
You just mentioned an example yourself: automobiles. This isn't specialized knowledge. You can read about China's JV policy, and how the list of affected industries has shrunk over time.
> They can mandate Tesla to export 100% of the cars at any time if they feel it threatens the local industry.
Anyone could theoretically do anything in the future. They haven't. In fact, they've been extremely welcoming to Tesla.
Yes but I don't read Chinese. Like I said I have read about this stuff and never found another example besides Tesla. You said something about "particular industries" which implies there must be far more examples of exceptions to the JV rule. I haven't been able to find them. I thought you might have a good source since you're the one claiming that there are more exceptions.
>Anyone could theoretically do anything in the future. They haven't. In fact, they've been extremely welcoming to Tesla.
They have a history of welcoming outside companies until they get a domestic equivalent. For example this has happened to tech companies.
I don't know the details of each company, but I think many major US corporations, including Apple, Walmart and Nike, have wholly owned subsidiaries in China.
> They have a history of welcoming outside companies until they get a domestic equivalent.
I don't know if any example of this, though I know this is something Noah Smith always claims (and I have a dim view on his knowledge of China). The closest thing to this is what happened to Google and Facebook, but they were really just blocked because the government wanted them to censor information, and they apparently weren't playing ball. But in terms of the Chinese government chasing a foreign company out just because there's a Chinese equivalent, I've never actually heard of a specific example.
0. https://en.wikipedia.org/wiki/Negative_list_of_foreign_inves...
https://fundselectorasia.com/china-officially-ends-foreign-o...
China's economy used to be completely closed to foreign investment. They didn't open up overnight. It's been a long, gradual process. The JV requirements were meant to prevent foreign firms from instantly wiping out every Chinese company in every sector. But as the Chinese economy becomes more advanced and competitive, the government worries less and less about foreign companies swooping in and taking everything over.
That is a good argument from a purely economic perspective, but the ability of a country to manufacture things on their own is a long-term benefit to the country from a security and sovereignty perspective. It's hard to prevail in a war if a potential enemy is making all your stuff for you.
China understands this very well, which is why they spend an enormous amount of effort and resources building up domestic alternatives to manufactured products they still rely on non-Chinese sources for. Comac may or may not become globally competitive with Boeing or Airbus, but that's not really the point of the venture. China wants domestic aircraft expertise and capacity because it's critical to have and they don't want to be reliant on the US or Europe for it.
The reason we are not manufacturing everything ourselves is that our incumbents refuse to allow anything to replace them, whether that is a more efficient company or a more able manager. They have the sway within the US to get what they want, and so things like patents and approval processes (which China does not have to the same degree, because for all of their flaws the government is more powerful there than the established manufacturers), will stop anyone from improving on GM within Michigan. The competition comes from within a country they can't determine the policy of.
Germany is suffering from a similar ailment. They are stagnating because for fifty years successive administrations have equated success with success of their majors.
Another cold war is possible, and someone could prevail eventually.
>The reason we are not manufacturing everything ourselves is that our incumbents refuse to allow anything to replace them, whether that is a more efficient company or a more able manager.
That is not true in general. We have laws specifically to promote competition. I'm not aware of anything like that in China, although I haven't looked. I can tell you that it's common knowledge in China that doing certain kinds of business requires a bribe or connections.
>They have the sway within the US to get what they want, and so things like patents and approval processes (which China does not have to the same degree, because for all of their flaws the government is more powerful there than the established manufacturers), will stop anyone from improving on GM within Michigan.
First, the Chinese government owns or has a stake in many companies there. I think you're even required to have certain CCP officials inside your company if it's big enough. Second, China does have patents and IP laws. They also have pervasive state surveillance, so your ideas can be stolen by the government. I often wonder if WE have that too, but at least total privacy is legal here. Americans can stop the state from spying on them in most cases, at least as far as we know.
>The competition comes from within a country they can't determine the policy of.
I think you're mistaken about this too, because many party members are rich and involved in business. They CAN determine policies. There was a huge crash in the Chinese stock market a couple of years ago as one party faction fought with another one. That was totally anti-competitive, yet it happened, and Western investors got screwed. I heard it was the result of a fight between Hu Jintao (the previous president of China) and Xi Jinping. I think the campaign against Hu was touted as a way to fight corruption. By the way, Mr. Hu has only been seen in public like once since he was dragged out of a national party meeting in 2022.
>Germany is suffering from a similar ailment. They are stagnating because for fifty years successive administrations have equated success with success of their majors.
Germany is currently stagnating because of the toll the Ukraine war is taking on them, along with other commitments they've made such as shutting down all their nuclear power plants. They too have high labor costs and so on, like the rest of the West, but they were doing relatively well until recently.
The war is not inflicting any tolls on Germany. It was all self inflicted. It was pure stupidity not to be prepared to Russian aggression in Ukraine, and it was pure stupidity to respond while unprepared instead of brokering some Realpolitik peace.
Their fuel costs are skyrocketing, which is affecting everything there.
>It was pure stupidity not to be prepared to Russian aggression in Ukraine, and it was pure stupidity to respond while unprepared instead of brokering some Realpolitik peace.
I agree about this. They should have never been unprepared, and they should have settled it by now with a reasonable deal. The war started because of NATO screwing around in Ukraine's politics and trying to set up NATO on Russia's border. Of course Russia also did political things in Ukraine, but it makes more sense for them to be involved with their neighbor than for countries much farther away to do it.
That sounds like an attempt to rewrite history. Ukraine's prospect of becoming a member of NATO was completely buried since 2008, and the intention to join NATO was resurrected only after Russia invaded Ukraine in 2014. To this day, the interest of other members to accept Ukraine into NATO remains lukewarm and no meaningful progress has been made in this direction.
The war started because Russia couldn't stomach that Ukraine was on the verge of signing a major trade deal with the EU that would've opened up the EU market for Ukraine, and Russia, facing its vaning influence over Ukraine, decided to invade and subjugate Ukrainians through violence, as it had nothing else to offer.
Russia were the ones who started this whole ridiculous way. Neither NATO nor the US nor the EU was as you claim screwing around in Ukrainian politics the way you claim. The one doing the screwing around was Russia much of this was illegal (bribes, corruption, etc) and was generally malicous. NATO was already on Russia's borders and its not like they were building huge bases or putting nukes there much less making diabolical plans to invade Russia. Instead they were banding over backwards to appease Russia.
Hell neither the EU nor NATO cared that much about Ukraine, not nearly as much as they should have.
Poland Finland and the Baltics are right in the neighborhood and have a much more rational interest in making sure Russia doesn't conquer Ukraine, cause they might be next. And NATO and the EU have an interest in making sure Russia gives up on its aggression otherwise its eastern members won't be safe. Ukraine is also a future member of both. Also crucially Ukraine has a bigger interest in Ukraine then Russia does
Thus your argument, if framed in economics, is that countries are choosing a worse option, considering their alternatives. This is a valid argument to make, but it's not consistent with your introduction.
Expensive goods only result from half-assed protectionism. When governments go the whole nine yards, such as with China's PV and EV industries, or the US with agricultural subsidies, it results in very cheap products and inputs to other products. Corn syrup is an ingredient to a lot of American food items because it's a cheap sweetener due to all the subsidies as the government decided, many decades ago, that American farmers should be shielded from competition. Some decisions make sense in the realm of national strategy and geopolitics, and not pure economics. The US would be very different if it had started to import the bulk of it's corn from Ukraine in the late 1990s
We have subsidies for solar and other stuff but the competition is absurdly stiff. What the US government actually needs to do is limit imports. If you want to subsidize that stuff, the money can come from tariffs.
>The US would be very different if it had started to import the bulk of it's corn from Ukraine in the late 1990s
Yes, it would be worse. Food is very important strategically and economically, and subject to occasional disruptions. You don't want to have people starve because of one or more regions has a low yield. There is zero benefit to letting our land go fallow to save the meager cost of government agriculture programs to help farmers survive bad years. We don't import corn because we grow all we need. It is native to North America after all.
The benefits of protectionism are what are short-term, but they leave both us and China materially poorer in the long term. Life today is better than it was in the 1950s — and a large part of that is knowing our comparative advantage and leaning into it, not trying to restore long-dead industries by political fiat and throwing trillions in good resources after bad initiatives.
If we want to help workers who are struggling - then tax more and redistribute more. Don’t throw a wrench into mutually beneficial trade (and completely sabotage our critical climate goals while we are at it, it makes no sense that we treat BYD the way we do).
It's not "irresponsible" to deny the existence of some utopia where everyone's interests align. It's not worth competing with virtual slave labor. A perpetual race to the bottom is not what we should be striving for. With our current standard of living, or even half of it, we don't make anything that is going to be economical to export in the long run.
>The benefits of protectionism are what are short-term, but they leave both us and China materially poorer in the long term.
You're not entirely wrong. There is a cost to duplicating effort. What is the cost of not being independent? Your country's sovereignty and maybe your life. Let us take care of ourselves as best we can and import only a small amount of stuff.
>Life today is better than it was in the 1950s — and a large part of that is knowing our comparative advantage and leaning into it, not trying to restore long-dead industries by political fiat and throwing trillions in good resources after bad initiatives.
I think many would argue that life is worse today than it was in the 50s. Sure we have more consumer goods, but housing is unaffordable and many people are working well beneath their capacity at meaningless make-work jobs in the service industry. The "long-dead industries" you speak of are alive and well, just not HERE. Not because others are necessarily doing those things better either. It is all about labor costs and regulations in conjunction with international competition.
>If we want to help workers who are struggling - then tax more and redistribute more.
First of all, many aren't working at all because there are no good jobs for them. Second of all, what exactly are we going to tax if everything is offshored consistent with the current trend? What are we going to buy our imports with, the land under our feet (which is finite and also our home)? Increasingly worthless paper, promises to drop bombs or not drop bombs somewhere, etc.?
>If we want to help workers who are struggling - then tax more and redistribute more. Don’t throw a wrench into mutually beneficial trade (and completely sabotage our critical climate goals while we are at it, it makes no sense that we treat BYD the way we do).
Oh yes, nothing more critical to cutting pollution than shipping giant logs to China to be turned into toothpicks. Give me a break. It makes total sense that we treat BYD the way we do. It is unfair competition that would destroy one of the few industries we have left, and China isn't exactly eager to buy cars from us (nevermind that they cost too much for the Chinese anyway). We might all be better off if every country produced what it could. It may lead to new discoveries in design and production methods. And if international trade was not an issue, countries could freely copy each other's IP for domestic use. That last part might be too optimistic but monopolies create stagnation.
At what scale does that become true?
Certainly an individual is not better off importing as little as possible? This would mean not working any traditional job, not buying tools, not buying food, but crafting a comfortable life on one's own starting naked and with bare hands. Certainly it doesn't make sense to apply such a policy to the individual.
Should cities then be the scale at which this cutover happens? If a natural resource does not appear in its geography the citizenry must do without? Every city farms all of its own food, has factories for all told and merchandise its citizens wish for? Cars, industrial equipment, forestry, mining, clothing, food, technology, all made within the city limits? There is not even enough room for all of this.
A US state? A small country? What is the cutover point at which one is not impoverished by such a policy?
Or perhaps you believe I take too extreme a position on protectionism and think some trade is good at any scale. The same threshold must exist:
If it improves our well being to trade a little, what is the threshold at which more trade stops making us better off? Where is the inflection point at which a bit more trade hurts us? Can you point us to a country with an optional amount of trade? Or could you compare two countries based on their amount of trade and tell us which is better?
If you prefer a different framing: hopefully we can agree that isolationism at the level of North Korea is a negative for its citizenry, independent of the dictatorial regime they live under. It seems that you believe the US trades too much. So we can imagine a curve of some sort on a graph with the US on the left end and North Korea on the right. The slope moving from US starts off positive. The slope moving from North Korea starts negative. Somewhere between the two, there must be a maximum. How would one calculate it?
The horror of one's main geopolitical rival being poor and technologically behind.
US oil and gas industry has $240bn in annual revenues. This is about comparable to how much Americans spend at Apple (almost $200bn)
ExxonMobil alone made $300 billion in revenue in 2023.
Even if you look at oil majors that only operate in the US - Marathon had $170 billion in revenue in 2023.
The US produces 13M barrels of crude and condensate per day: https://www.eia.gov/todayinenergy/detail.php?id=61545
The lowest recent spot price is $69.5: https://www.eia.gov/dnav/pet/PET_PRI_SPT_S1_D.htm
This tells you that annual production of just crude oil is > $300B/yr. The US also has plenty of downstream processing after production (https://www.eia.gov/dnav/pet/pet_pnp_unc_dcu_nus_m.htm), which means that total annual revenue must be significantly greater than this.
i am not sure that the CCP is doing anything to enrich the average worker, and in fact, is probably doing the very opposite - making sure the chinese currency is constantly and artificially debased to make export more competitive. This results in lower wages for the workers. It is why there's low demand for goods/services in china.
The money being earned by these exports is kept mostly by the gov't - to be spent on whatever they think has priority, which mostly have been on infrastructure, supporting industry the party deems important etc.
Much of China's exports comes from private companies, so no, the government does not keep the money. Even state-owned enterprises have their own balance sheets and don't just transfer everything to the government.
And finally, China's currency has actually been overvalued at various points. The central bank has intervened in both directions, not just to suppress the value of the currency.
That's bullshit. China is more than 5 time larger than the US, so you really expect them to build fewer things than you forever?
2.) Some of the data that it's based on is up to 2023. And some are up to 2020
3.) There has been massive movement of manufacturing out of China between 2020 and 2024. I won't provide the references here, as there are too many to mention, from Japanese/Taiwanese/South Korean/European/American companies. They are easily chatgpted/googled. Also the reason why Shenzhen and Guangzhou has suffered deeper drop of real estate price and employment.
4.) In 2024, Mexico was the biggest exporter to US. United States was the biggest exporter to Europe. US was the largest export destination of Japan.
5.) Trump's 60%-100% tariff on China will accelerate the exodus of manufacturing
That said, it's interesting to see how the supply shocks of a global pandemic can shift these kinds of relationships. It doesn't surprise me that Mexico, being a huge source of food for the US, is the largest exporter to it. What I do wonder is how much exports pertain to manufacturing relationships. Like in the case of Mexico -> US, I think we wouldn't count e.g. stuff we buy for the produce section to be manufactured goods, but that would still count toward import/export numbers. Does this apply to other things too? Do things like IP count?
https://www.forbes.com/sites/kenroberts/2024/06/25/us-import...
- Chinese imports into the United States are down 19.78% from April of 2018 — when Trump first started imposing tariffs — to today, or $31.88 billion.
- Cell phones: Big winner is India. China has gone from a market share of 63.59% in 2018 to a still strong 42.14%. That’s a decline of 33.73%.
- Computers: Big winners are Taiwan, Vietnam. China has gone from a market share from 53.45% in the first four months of 2018 to 28.11%, a decline of 47.40%.
- Furniture: Big winner is Vietnam. China, meanwhile, accounted for 23.55% this year, down from 48.54% in 2018, a decline of 51.49% compared to a gain of 88.67% for Vietnam.
- TVs and monitors: Big winner is Vietnam. Mexico overtook China as the import leader in this category just before the pandemic and has remained on top. It gained market share from China, which fell from 53.68% in 2018, when it was No. 1, to 33.64%, a 37.32% decline.
- Digital storage devices: Big winners are Korea, Vietnam. China accounted for 39.50% of those imports in 2018, more than double that of any other nation. In 2024, its percentage is 4.23% and it ranks No. 9.
- Digital cameras: Yep, Vietnam again. China, meanwhile, has seen its share go from a majority, at 50.09%, to 17.57%, a decline of 64.92%.
This doesn't make sense to me, do they do some high level assembly of components? I think China took over global market of TV panels manufacturing for example:
With this transaction, Chinese manufacturers’ market share of the LCD panels used in TVs will increase from 66% to 72%, with nearly 100% share in ultra-large 90 – 115 inch screens.
The market share of Chinese OLED panel manufacturers is forecasted to increase from 47.9% this year to 50.2% next year, surpassing the OLED shipment share of Korean companies.
https://www.forbes.com/sites/willyshih/2024/10/13/chinese-ma...
It sounds like it could be that China losing in cheap assembling tasks, but significantly gaining in high tech manufacturing.
Is all the garbage on temu/shein also part of the gross production KPI? I couldn’t care less about these cheap plastic widgets.
You can objectively compare the value (to the world in this case) of two very different set of items.
* by default I mean, these metrics/calculations are downstream of national accounting methods, i.e. most of world standardized on UN SNA which measures "value" as in $$$ vs something like (deprecated) soviet material production system (MPS) that measures physical material widgets produced.
One proxy metric is PRC container throughput of her ports last year was ~300 million TEU vs US is about ~60 million TEU (with slightly higher ratio of empty containers).
If the one car sells at a market price of 1/5 of another, then the only reasonable conclusion is that, as judged by consumers, one car is worth 5x as much as the other, and therefore is 5x better.
That’s what market prices are: the collective valuation of goods/services and their alternatives. Of course, the market clears at a price that is a combination (you can think of “average”, but that arithmetic is not the process by which prices are discovered) of the preferences of all consumers in the market.
If you have a preference that goes counter to the market, e.g., if you do not think those two cars are 5x different in quality, then there is a great deal for you!
If you think the worse car is only 2/5 the quality (rather than 1/5), then you can get something for half the price you’d be willing to pay if the rest of the market agreed with your preference.
If, on the other hand, you think the better car is 10x the quality of the worse car, then the same “deal” is true for you. You’d be willing to pay 10x the cost, but you only have to pay 5x the cost.
There are plenty of good macro and micro econ courses available for free if you’d like to dig into this sort of thing more.
The US is the number two overall exporter, number two exporter of merchandise, and number one exporter of services.
What do you believe US exports should be?
Overall exports: https://en.m.wikipedia.org/wiki/List_of_countries_by_exports
Merchandise exports: https://en.m.wikipedia.org/wiki/List_of_countries_by_merchan...
Services exports: https://en.m.wikipedia.org/wiki/List_of_countries_by_service...
The US Navy has stated numerous times that the US essentially has minimal capacity. Maintenance and construction are years behind schedule. It isn't about funding. 40% of attack submarines aren't fit for service or deployable. The new Columbia class submarine will use a new steam turbine. Northrup Grumman was selected for the manufacture of the steam turbine in 2014. It isn't ready yet.
Sophisticated manufacturing is in crisis in the US. It's the reason that the US bigfooted France in the AUKUS submarine deal. To revive a failing industry.
These are interesting tests due to there are restrictions on sourcing of parts and personnel for a project.
https://news.usni.org/2024/04/10/late-turbines-have-major-im...
https://news.usni.org/2024/04/10/late-turbines-have-major-im...
We spent $22.5 billion to get two active.
Imagine what $22.5 billion USD buys in Chinese manufacturing capacity.
China has a great way going about this. making friends with less developed countries that U.S. overlooked. China is looking for something specific. Just as U.S. is looking for something specific as well. To be totally honest I am not entirely sure what the U.S. is looking for when engaging with other countries, other than the same narrative for the fear of not having safety blah blah. This time that was spent on these adventures the U.S. cannot get back, while also injuring foreign relations.
there is a clear sign that the U.S. government is confused and has a gun with no-where to aim. All the policies and efforts are accelerating the U.S. into deterioration. The U.S. has some strong sector for the sake of this reply i will mainly say that attacking the top tech firms and industries with regulation will only push them out to more favorable grounds give new room for industries to form in more favorable grounds other than U.S.. the solution must solve the problem that brought the solution to existence.
Surely nobody halfway serious is arguing that. The faction about to take power in the USA is tilting at the "woke ideology" windmill, talks openly of deporting a big chunk of the workforce and does not seem to understand how tariffs work.
Even if you ignore all that, China has 4-5x the population (for now!) and is by all measures has a highly developed, productive and growing economy. What argument can there possibly be in favour of China falling back, other than maybe the aforementioned demographic issues.
But there are several others that show up in serious financial circles. Particularly the domestic fiscal policy around debt and investment, currency liberalization and entrepreneurial risk vs reward.
The Chinese government is walking a very fine line with their private enterprise policies and it’s not one that is well understood. But there is quite a bit of concern that if China gets more autocratic it may hinder further productivity and growth (right as the demographic issue hits in earnest).
Instead Trump is angrily tweeting about how he's going to make everyone pay. The racist isolationists are back in the halls of power.
Chinese loanmaking to foreign countries has mostly gone bust, with many loans basically in default. While it’s true that Western development agencies were not lending to these projects, they mostly weren’t doing so because they were doubtful of the business cases of said projects and the likelihood that the government could actually pay off the loan, and so now China is dealing with that.
One of the most direct Chinese relationships is with Myanmar, which has not only gone to hell in a handbasket but now is a hotbed of criminal activity by Chinese organized crime abducting Chinese nationals to work in Myanmar. So that’s not great either.
As America (or the world bank/imf as a proxy for american capital) can attest, calling in these loans is a great way to make a lot of enemies.
So for instance, most of the African loans financed things like ports, and roads, and bridges, and trains, etc. Well when you look at the map of the "where" and the "what", it's easy to see the "why". All these bridges, roads and trains lead to the ports. Sure, this allows African countries to move their resources, and sometimes even finished products manufactured in these nations, to ports for delivery to "international clients". (Read, "China"). But tell me this, will the Africans own the freighters? No. The Africans will move massive amounts of products and resources to their ports, likely in the EAC, then China will pick up all that bounty and move it to China.
Sounds a lot like "harvesting" doesn't it?
There's one case where the Chinese definitely don't care whether the loan is repaid or not. They only care that all the bridges, roads and trains financed by the loan go to the ports. In fact, I don't know if the Africans realize it, but they'll be paying the Chinese more than the value of the loan just by using the rail and roads. The entire infrastructure system they've built only facilitates one thing, moving resources and products to the ports.
Is it good for Africans? Absolutely. A much better deal than they used to get when the West and Russia used assassinations and proxy wars to ravage the place. But let's not pretend it's about helping Africa. It's, at root, about an extremely low risk method of helping China by "loaning" money to others.
frankly this whole comment reads as historically less informed
All the Chinese needed for the infra loan projects to work were nations who couldn’t access financing via other means. Now they’ve been doing it a while, even the nations that can access the financing have been dipping into that well. Sometimes it’s just better terms.
One other interesting note is that the way the financing is structured, the loans are not coming from the Chinese state but state owned banks, which seems like a mostly pedantic distinction, except the state owned banks also do much of the normal lending activity within China itself. Those banks now face the double whammy of dud property loans domestically and these dud loans to other countries, which is not helping the Chinese economic slowdown.
Not that the west ever gave a fuck about justice beyond intraclass squabbling
"The more you tighten your grip, Tarkin, the more star systems will slip through your fingers"
The reality is that China will not magically disappear and they have integrated themselves into the world economy.
Let them go, someone else will step in. Yes it will be inefficient as someone else ramps up, but companies that are only here to repeatedly hold the country hostage to get out of sensible regulations are a threat to the population's security. China will eventually abuse its population to the breaking point.
https://www.wilsoncenter.org/blog-post/mining-influence-chin...
Now the U.S. is fighting for minerals in Ukraine. Rare moment of truth by Senator Graham:
https://responsiblestatecraft.org/lindsey-graham-ukraine/
This of course could have been achieved diplomatically by cooling down the NATO tensions. But no, another proxy war must be fought that likely will be lost like Korea, Vietnam, Afghanistan, etc. The Chinese do not fight and profit from all of this.
[1] https://www.economist.com/graphic-detail/2022/02/01/by-one-m...
It's a very "Eastern" strategy. Avoidance and Trade.
1) Autocracies are fundamentally unstable and need extreme violence to prevent dissent and dissolution. Autocrats basically steal from people at the bottom who in turn are less incentivized to give their best performance. Democracies are much more stable due to acceptance by most people who live in them and much more fair sharing of profits.
2) Due to their inherent instability, autocracies have a very high incentive to fake numbers.
With this background, I think your arguments are for the trash can.
Overtaking the US on GDP per capita is much further away.
Both were mass produced in China and both shipped with 3M branded adhesive mounting pads. An apt and literal representation of global manufacturing — US made chemicals, Chinese electronics, one clinging to the other.
"3N" is blatant infringement, or at least would be understood as such in the US. China simply doesn't enforce trademark infringement in the same way. I am not opining on whether China should.
I wonder how manufacturing output compares between China and US+EU, say. It doesn't make that much sense to look at EU constituents in separation. Even then I suppose China is ahead, but maybe it's not a total wipeout.
That led me to wonder about manufacturing output vs GDP. Is China producing more, after adjusting for its total GDP. So for example, China's GDP is about 4-5x bigger than Germany's, whereas the fraction of manufacturing output is about 5-7x different. It still puts Germany "behind" but it's not outright domination.
In fact, such fraction, of manufacturing to GDP, is a basic economics measure: it's the fraction of GDP coming from manufacturing! And it's no surprise to anyone that this fraction is high in China.
So then I guess the questions would be:
- is manufacturing expected to outperform the other constituents of global economies going forwards (i.e. is China smart putting its eggs in this basket)
- is the rest of the world at risk because China can squeeze them (perhaps)
- what is the outlook for manufacturing outside of China (maybe not great but it seems like people are waking up to this).
I wonder how much of that simply cuts back to marginal costs of energy and ESG. Presumably in China you can manufacture cheaply partly because you don't need to pay for employee rights or clean energy. Not all of this, clearly, but where would US+EU be if it wasn't constrained by broadly speaking ESG (I'm not saying it's a bad thing, but it is a thing).
Ukraine is more constrained by weapon supplies, especially drones and artillery, than by manpower.
I'm not sure both sides are playing the same game. In the game I think might be afoot, if your economy is management consultants, therapists, and hair stylists, that's "bad" GDP. Resources and manufacturing are "good" GDP. Resources are complex in that stone are renewable, and some go away when you export them.
I'm not even going to talk about education or, related, R&D capacity.
i’m extremely skeptical of people’s ability to view the economy from on high and pick out the “good, productive gdp” and the “bad, makework gdp”.
Maybe in general, but rent-seeking is a pretty large part of the economy by estimates I've seen.
It depends on your goals.
However, in a great power conflict, they're much less productive than tanks, drones, fighter jets, and guns.
Conversely, money thrown into weapons can't be used for quality-of-life improvements.
Neither of these is "good" or "bad" per se.
Some industries are hybrid. A ship yard is dual purpose.
If two hypothetical countries are playing this game, and one exports movies to buy ships and vice versa, when war breaks out, one country might be stuck without movies and the other without ships.
Actually, from the assessments that I have read, while new technology and drones have made a meaningful splash, it seems like manpower and the ability to produce large quantities of artillery shells have been the true determiner of the tides. The lesson learned thus far is that considerations from the past still matter.
Russia doesn’t have the capacity to transport that much oil by land. It’d take years to build that infrastructure and it’s not even clear that China is at all interested in supporting huge investments that make them that dependent on Russia. Keep in mind that China and Russia are not fundamentally friends.. Russia is still holding territory that belonged to China, and that China wouldn’t hesitate to take back if they saw an opportunity.
Unless they can transport by sea by the arctic route year round (could eventually be enabled by climate change), the only way is to go south. Which is a far more vulnerable route than oil from the Middle East.
It wouldn't be close at all. The j20's wouldn't be able to detect the f35 and the F35 can hit it with an air to air missle 350 miles out.
From the Article you linked:
""“The J-20, in my estimation, would be dead long before it had the ability to maneuver against either the F-22 or the F-35. It’s got enough spikes on it to where the radar returns on it are likely to be much more significant, which means that the F-22 and the F-35 can see it a lot farther away.”
especially this article https://www.americanmanufacturing.org/blog/chinas-shipbuildi...
If one wants a skilled job in manufacturing, they have to earn a qualification first, or go through a period of apprenticeship. The wages for most manufacturing jobs are much lower in the west than for knowledge workers, and openings likely fewer - it's only recently that new manufacturing sites got spun-up after decades of continuous decline- thanks to 2 pieces of legislation from the Biden administration; the Inflation Reduction Act and the CHIPS Act
Six nations manufacture at least 3% of the world total.
China is followed by the US, Japan, Germany, India, and South Korea.
Note how the world has changed. Only three of these are long-established industrial economies; the other three are newly industrialised economies.
Four of the G7 don’t make the cut.
China has a lock on various electronic production streams by having a lock on most of the rare earth processing and dealing with the low level radioactive waste by products.
One billion tonnes of raw iron ore per year flows from my state of Western Australia to China for steel production - the machinery, diggers, haul paks, massive trains, et al make that happen in a state with a population of only ~2.3 million or so with few of those in mining. 16x peak US iron ore production for steel with a workforce smaller than the US's at it's peak.
China didn't just fall into peak manufacturing capacity by a happy accident of many workers, they (for better or worse) made long term plans and stuck at them - including the reduction in population growth known as the one child policy.
Current Chinese pharma production is a truly bespoke behemoth - it has a massive capacity that can easily make small to order amounts, and again that's due to factors such as education and well automated pipelines.
I don’t think China planned to intentionally fall off of a demographic cliff. But they are already planning for that cliff by making very aggressive investments in AI and automation. If you see how effective their plans from 10-20 years ago turned out today, wait another 10-20 years and…I hope we have some kind of a plan…it isn’t what Trump has in mind for sure.
Ironically, Japan planned for the same cliff with aggressive investments in AI and automation in the 1980s, but the rise of China messed that up with cheap labor, and their AI play was misguided/probably too early.
Too right.
> It's like the degenerate alcoholic who's willing to prostitute their mother for a bar tab.
Ahh, so you are Australian then.
> even if they are from their biggest regional rivals.
How is China a regional rival? Australia has koalas, China has Pandas.
> While Norway and the UAE enjoy the fruits of their resources through strong welfare systems enabled by a resource-driven economy
Australia also has welfare, high living standards, high life expectancy, good health, etc.
> Australia sold itself so hard its own citizens have to buy from foreign corpos.
Ahhh, so Norway and UAE have their own home built computers, TV's, and EV's, etc then?
You have some points, but you're trying to edge lord a bit hard there mate.
Tell me how affordable a home near the workplace is for most Australians? On the contrary, Norwegians and Emiratis get a huge housing subsidy for their first homes. They both use their oil revenues to push for sustainable energy sources at home. And the UAE is currently pulling over its weight in AI, funding a significant AI player, while also taking part in active space exploration.
> Ahhh, so Norway and UAE have their own home built computers, TV's, and EV's, etc then?
Building computers, EVs and TVs in this age when China controls the complete manufacturing chain is a bit stupid honestly. But they do have manufacturing bases on the things they actually excel at - Norway is a major player in manufacturing shipping and specialized O&G equipment, while the UAE has focused on aircraft parts manufacturing and defence manufacturing.
Australia itself doesn't have the demand for that much steel internally - China does (and exports its excess production).
Which is exactly what Australia could do if it made a bunch of steel.
With no small amount of it exported to Australia.
You literally let an Australian company process it to higher value products and ship it? That's literally what every oil major has done with their resources.
Not to mention PRC steel employs like 3m people, about the entire population of western australia where all the iron ore is. Unless AU dumped 1/5 of their entire workforce, relocate millions of workers and families, they can't make enough finished steel products to fill PRC appetite. I think much easier and profitable for AU to double down on ore extraction and ship more $$$ than finished steel. That's where AU competitive advantage is. Otherwise buyers will look elsewhere, i.e. Brazil could have been expanding iron ore exports much sooner.
I saw with my own eyes what you’re talking about and you are spot on. It’s depressing and sad to see how Australia can’t organize a free one in a brothel, is stuck in the past and has no real interest or plan on how to improve anything at all.
Their problem is life is pretty good, so they’re not interested in a bit of work to make it incredible. Like you said, a modest sovereign wealth fund could easily let every Aussie work 4 or even 3 days a week. Or more solar, or making use of all the uranium or one of dozens of things
"Australia is a lucky country run mainly by second rate people who share its luck. It lives on other people’s ideas, and, although its ordinary people are adaptable, most of its leaders (in all fields) so lack curiosity about the events that surround them that they are often taken by surprise."
Sadly as true today as it apparently was back then.
I avoid goods made in mainland China but seek out those made in Taiwan b/c they are exquisitely tooled. Both are Chinese but mainland manufactury severely lags Taiwan's.
I still do. Amazon in Europe is completely filled with Chinese junk, it's nigh impossible to find anything EU/US produced in certain categories. It became Alibaba with markup.
https://forcedistancetimes.com/asymmetric-why-china-still-ca...
> While China claimed a breakthrough in 2017, manufacturing a ballpoint pen all by itself and “ending a long-term reliance on imported [ballpoint pen tips],” as of 2021 the country was still reportedly 80% dependent on imported ballpoints.
> In fact, Chinese imports of ballpoints pens (comprising the ballpoint and ink reservoir) have more than doubled since 2017, from 12 million USD to nearly 28 million USD last year.
> Machine tools are machines that make other machines. China is a leading producer of machine tools, accounting for about 31% the world’s output in 2021 (p.10, fig. 12)—ahead of Germany (13%), Japan (12%), the US (9%), and Italy (8%). But China is heavily reliant on foreign technology for high-end machine tools: in 2021, it was 91% dependent on foreign firms for the most advanced machine tools.
China just doesn't have the ability to do high precision, high quality engineering and manufacturing.
I am not saying that everything that comes out of China is bad, but that there are limits to what can be produced at a high level of quality there. You can buy simple tools, like knives, at a good level of quality from China, but anything that requires complex tooling is likely not actually made in China.
For that matter, smartphones aren't "made in china". They are /assembled/ there. China doesn't make the CPU in an iPhone, TSMC did. China doesn't make the /machines/ that engrave silicon in TSMC's factories, ASML does. And so on, and on, and on.
If something is truly mainly made in China, with Chinese tools, and it's complex to manufacture, you should avoid like the plague.
China hasn't really become the manufacturing capital of the world. It's just the place where a lot of people are paid to use screwdrivers, glue, and package things.
What do the Chinese make in high quality besides silk, EVs, and Orwellian tyranny?
The real problem isn't that it's a third, it's that it will be something like 2% of commercial aircraft and 98% of PCs, and then the second one is bad. Single point of failure. That's the part that needs to be addressed.
[0] https://news.samsung.com/in/samsung-inaugurates-worlds-large...
Malinvested money will pump GDP for a few years before growth stops and potentially reverses.
For example the opium wars.
Nowadays the empire works via its currency that allows it to buy real goods and assets for something it can create for free with little constrain.
Of course the exploitive nature of the “exorbitant” privilege is controversial; and some economists would argue that it does not exist at all.
For a more recent example, the CIA operations on South and Central America in the 20th century. But well, it didn't take the entire military there, just a military-like paragovernamental entity.
Doing that today would be seen in a bad light and has a real chance of turning the entire world against the country. That doesn't seem enough to stop Russia, though.
#58 is nothing to be proud of. Work to death. Not very fun.
What would it take to get that capability back?
Mexico is ideal since you can ship partially assembled goods via truck or rail to and from Texas. It's easy to manage logistics and partnerships due to the close proximity.
The future of the US is Mexico.
Vietnam and India can absorb SEA manufacturing.
What it would take for the US to make cellphones is direct subsidy to the (inefficient, and for that reason likely therefore doomed by the market without artificial support, since there is robust competition) US firms doing so.
Of course, not only would this cost the amount of the subsidy, but the amount of the lost opportunities in places where the US has comparative advantages foregone to provide the subsidy.
The question then is why would you want to do this?
The problem is we don't need efficiency, we need effectivity.
>The question then is why would you want to do this?
Because He Who Makes Leads The World. You can't and won't lead if you don't actually get your hands dirty and make shit. China is the world leading superpower now because they make everyone's shit, we are all beholden to them.
>> What would it take to get that capability back?
> The question then is why would you want to do this?
National security, obviously. Cell phones are a critical modern communication device, and whoever though it was a good idea to outsource that kind of thing political and economic rival was an idiot.
There's all kinds of accounts of past CIA/NSA daring-do where they used US-manufactured products to subvert rivals, and now we're going to get to be on the other end of that kind of thing.
Then there's the adding factor of it being kind of a good idea to have significant manufacturing capacity for the full-range of modern products located domestically or with allies in case the geopolitical SHTF.
You know, all that important stuff the market doesn't give a shit about, because it's a limited and imperfect system.
i would argue this to be a good thing - a global "country". And yet, it is the human condition to separate tribally. It's why civilization can't advance more, until this becomes solved.
Purism is selling the Librem 5 USA at $1,600
From the site: "The Librem 5 USA has Made in USA Electronics with all fabrication and manufacturing done at the Purism facility. Individual components used in fabrication are sourced direct from chip makers and parts distributors. We use US companies with US fabrication whenever possible. Most distributors are based in the US with the exception of large integrated circuits that are made in a variety of countries where those companies do fabrication (US, Taiwan, South Korea, Japan); an example is the NXP CPU we use from their fabrication in South Korea. While we source chips that are made in the US whenever possible, chip country of origin is not nearly as meaningful as country of board fabrication, especially when all chips are verified hardware circuits that are driven by free software in the kernel."
[1]: https://puri.sm/products/librem-5-usa/#table-of-origin
If you look at the table on the site, its not 100% USA yet but they are getting close and thats a positive development.
There's no evidence CCP is "subsidizing the cost with spying" when it comes to consumer electronics. Even when it came to telecom gear (during 5G rollout in developed countries), concerns were mostly theoretical.
Also these guys have an anti-interdiction service thats pretty nifty: https://puri.sm/posts/anti-interdiction-services/
On the hardware side:
Customized tamper-evident tape on the sealed plastic bag surrounding the laptop itself
Customized tamper-evident tape on the internal, branded box
Glitter nail polish covering the center (or all) screws on the bottom of the laptop
Pictures of all of the above plus pictures of the inside of the laptop before sealing the bottom case
All pictures sent to the customer out-of-band, signed by Purism and encrypted against the customer’s GPG key
All coordination occurring over GPG-protected email
Integration with PureBoot Bundle
On the Software Side:
Shipping the laptop and Librem Key to separate addresses
Postponing shipment of the laptop until the Librem Key is delivered
Configuring the Librem Key and PureBoot with custom, user-provided GPG keys and/or PINs
That's actually worse than it seems on the surface. $1,600 might seem only twice as expensive as a "normal" phone (eg. iPhone 16, $799), but if you look at the specs it's much closer to a low-end phone that sells for >$100. For instance the redmi a3[1] sells for ~$75 and is better in every aspect CPU, GPU, display, memory, storage, battery.
Manufacturing was always going to move to where it costs less.
It's bad for a productive american economy but it's a prisoner's dilemma so you can't blame businesses or consumers.
The government is the only party that had the power to do anything. it's 100% an economics problem.
tl;dr: Today China vs US is 19% vs 16% world GDP. By 2035, it will be 24% vs 14%. China will be large economy, US can't beat China. Unless there is a nuclear war, which is probably less than ideal.
> Democratic countries’ economies are mainly set up as free market economies with redistribution, because this is what maximizes living standards in peacetime. In a free market economy, if a foreign country wants to sell you cheap cars, you let them do it, and you allocate your own productive resources to something more profitable instead. If China is willing to sell you brand-new electric vehicles for $10,000, why should you turn them down? Just make B2B SaaS and advertising platforms and chat apps, sell them for a high profit margin, and drive a Chinese car.
> Except then a war comes, and suddenly you find that B2B SaaS and advertising platforms and chat apps aren’t very useful for defending your freedoms. Oops! The right time to worry about manufacturing would have been years before the war, except you weren’t able to anticipate and prepare for the future. Manufacturing doesn’t just support war — in a very real way, it’s a war in and of itself.
> Democratic countries seem to still mostly be in “peace mode” with respect to their economic models. They don’t yet see manufacturing as something that needs to be preserved and expanded in peacetime in order to be ready for the increasing likelihood of a major war. Fortunately, both Republicans and Democrats in America have inched away from this deadly complacency in recent years. But both the tariffs embraced by the GOP and the industrial policies pioneered by the Dems are only partial solutions, lacking key pieces of a military-industrial strategy.
* https://www.noahpinion.blog/p/manufacturing-is-a-war-now
FDR started preparing for war years before WW2 / Pearl Harbor (warning: heavy anti-union slant in the book as it was funded by AEI):
* https://www.goodreads.com/book/show/13152691-freedom-s-forge
Dubious claim. Military power is not measured in “spending”. Manufacturing is in fact a basis for modern military power, as it was the basis for US military power in WW2. The fact that China can produce 10k+ precisely controlled drone swarms in massive quantities and produces more hypersonic missiles and ships casts doubt on this claim.
Says the Atlantic: https://www.theatlantic.com/politics/archive/2024/12/weapons...
Lots of reports say that Chinese military spending has exceeded our own if you account for their cheaper cost of labor and material goods.
China also recently (just days ago) flew two new sixth gen fighters. The US has yet to demonstrate one.
The tactical move for the West to counter is to move as much manufacturing as possible to other countries (Vietnam, India, Mexico) and hope that can put a dent in China's manufacturing flywheel. The Chinese consumer economy isn't robust enough to absorb all of the goods they manufacture (at least not yet), and without buyers the system would need to be scaled back.
Even if China was 100% a friend, you wouldn't want one country with this much outsized control over manufacturing. In the future this will be better distributed.
What are these?
It's not up to the US to decide this. China is the largest car market. It is also the largest car producing country. It is the largest manufacturing country. It also has the largest number of consumers in any country, and this market is still growing. It has the largest number of engineers. The numbers play in China's favor.
I am not Chinese but I still find this comment hilariously offensive and tone-deaf. I can say almost without a doubt that the US has a "tremendous" issue with cult-of-personality right now. But I don't see Chinese or other countries attacking or trying to "contain" this.
The US is still treated as a nation, unified in its people and leaders, by even its adversaries. But when Americans deal with other countries, there is a tendency to say things to the effect of: "the people are fine, it is the X that must be suppressed", ignoring that this X is inherently or directly connected to people of this nation.
Instead they have huge manufacturing capacity sitting on top of a completely busted financial system. Look at the returns of Chinese equities vs GDP growth the last 20 years. It is completely absurd.
The financial system is imploding right now, trying to find a place to hide https://tradingeconomics.com/china/government-bond-yield
Another phrase for money leaving the country without goods coming in?
The equity market is just one place where companies can go to receive investment. In China this is a small part of total investment pool. So, no surprise that these equities don't go as fast as the rest of the economy, there is a lot of competition. In the US this is the reverse because traded companies are allowed to swallow more and more of the real economy.
China doesn’t really have a 5th generation fighter yet, it is more a roadmap item than a finished product. There is zero evidence they have 6th generation systems. These terms have meaning. The US has been flying 6th generation prototypes for years, they just don’t post photographs. The US has been flying production 5th generation fighters for 20 years. They have a long lead and it isn’t like they stopped development.
Also, appearances are largely immaterial to being classified as 5th or 6th generation. Most of the relevant properties for classification are not casually observable.
People don't ever ignore corporate America's actual price gouging. I think they are sometimes conditioned to see price gouging where there is none. Domestic costs are very high, and foreign costs are low (perhaps even suspiciously low; our competition is willing to operate at a loss to put us out of business). Don't get me wrong, it would be awesome if there was some obvious price gouging at work that could be cut to solve all our problems. But it is usually just market forces that drive prices high.
Unfortunately I don’t know what short term options there are to contain the CCP’s power and control over this capability. The conclusion of this informative article says this:
> China is now the world’s sole manufacturing giant. As its recent success in electric vehicles demonstrates, its wide and deep industrial base can help it gain a competitive edge in virtually all sectors. The exceptions are the most advanced sectors, where the G7 countries still dominate.
> Politicians who indulge in loose talk about decoupling from China need a clear-eyed look at the facts. As we have shown (Baldwin et al. 2023), all the major manufacturers in the world source at least 2% of all their industrial inputs from China. Decoupling would be difficult, to say the least.