Hacker News Reader

Comment by nxm | Hacker News Reader

Umm not when the adversary is using heavy government subsidies to undercut prices and essentially take over the industry. Look at what’s happening to the European car industry, with more job losses planned by VW just this week

View on HN

This argument doesn't stand up to much scrutiny.

- The Polestar vehicles most recently banned are made in Charleston SC

- Fossil fuel industries in the US receive huge subsidies

- Non-Chinese brands (Hyundai/ Kia) produce models with similar pricing

This is a tired argument. When China does it it’s subsidies, when other countries do it it’s called industrial policy.

The irony is that China is actually good at effectively using this and getting more out of reach unit of money put in. Perhaps that is why we feel the need to label them differently, though I would also venture it is more a cultural thing. Americans tend to view subsidies as handouts and industrial policy in the Puritan values lens.

Effective Chinese subsidy per vehicle is lower than the $7000 per vehicle the US had in place.

Is that even knowable? The Chinese economy is very opaque.

The Europeans did a very good survey of Chinese subsidies when determining what tariff to impose on Chinese cars. When data was ambiguous, they chose the higher number, and/or forced the Chinese manufacturers to refute it with hard data. They settled on 17-34%.

Why does it matter whether the subsidies come from a government, from venture capitalists, or from private equity?

Not like the US isn't doing equivalent shenanigans:

https://archive.ph/9vUNF "Donald Trump is kicking out Chinese firms and keeping their tech"

Isn't that the market strategy of silicon valley companies? Sell at a loss, capture the whole market and then inflate prices

It's always been the strategy for VC-funded companies: undercut pricing for as long as possible to achieve market dominance, slowly turn the price knob up to become profitable.

Always funny to read the tirades against subsidies here on HN, sometimes even the same users praising how much more capital exist in SV/USA for risky ventures (compared to the EU and other markets) will also complain about how China is undercutting competition with subsidies, without ever batting an eye to the fact the exuberant privilege the USA holds in capital markets is exactly what makes it possible for private investors to subsidise loss-making ventures for years to decades in the USA until the company becomes profitable.

Reply on news.ycombinator.com