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Comment by roenxi | Hacker News Reader

I'm not really sure that China's labour costs can be described as "low" these days, going by GDP per capita [0] they're above the global average. They're a little lower than the Europe median I think but the gap probably isn't strategically important.

The Chinese edge tends to come from their environmental laws; they allow their industry to do things that the West would ban.

[0] https://en.wikipedia.org/wiki/List_of_countries_by_GDP_(nomi...

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I have no source for this but I feel like the environment thing is too frequently repeated (also without any evidence). They're pumping out solar like mad and places like the Xinjiang deserts actually have nowhere to put their excess electricity from what I've read previously. They also have a "cancel" culture pointed at the right place, in that whenever there is some exposé of some xyz it usually does get some reaction from the authorities. Even if in the end no real punishment is meted out due to corruption or politics or cover ups the very least is that the perps gave to change a hiding spot. Which is very much unlike the datacenter gas turbines running in people's backyards in the US right now. Furthermore if you take a look at the Politburo meetings and political documents etc it is clear that Xi is actively trying to solve the environmental problem. In the latest people's meeting it was also a talking point. It is a matter of "face" for them at this point. Contrast with "drill baby drill"? It is easy to talk about the "environmental" problems in China but I think it is very last decade. As a disclaimer I live in Asia and I frequently visit China but I'm not Chinese nor do I get any so called "social credits" which actually don't exist in China. The information gap between what the west thinks they know about China and what it actually is is sometimes kind of just a huge joke.

Reminds me of my first trip to Japan, a lifetime of robotech and ghost in the shell had me shocked and disappointed at how run down and stuck in the 80s Tokyo and Hiroshima was.

I've been saying the same thing for the last 8 years to my european and american friends. Maybe in another 8 years they'll finally realise, or they will quietly adjust to the new normal where China is no longer viewed as this cheating, dirty and backwards competitor.

Will China still be an authoritarian one-party state?

Probably yes, but maybe by then, so will the US

It is an absolute dictatorship like the Nazi Reich or the Stalin system, only hundreds of times more powerful than either.

I think the environment thing is really overblown as well.

What’s not overblown is the ease with which the government can get big projects done. And there are some downsides to that, specifically when it comes to property rights.

The Beijing public transit trains are a great example. The routes are wildly straight. So straight they allow extremely long trains.

Thats possible, in part, because the government can just reappropriate the land in a way that governments in the west can’t without engaging with a contentious public.

And that’s just one example. That sort of thing permeates many different kinds of projects and leads to a particular kind of efficiency.

> I have no source for this but I feel like the environment thing is too frequently repeated (also without any evidence).

> They're pumping out solar like mad and places like the Xinjiang deserts actually have nowhere to put their excess electricity from what I've read previously.

You've found a pretty compelling piece of evidence right there. There is a reason they're the ones pumping out solar like mad - because they have relatively lax environmental laws. If they had western-style environmental laws the panels would have to be manufactured in India or Africa or something.

Obviously it isn't the only criteria because I'm sure there are places with lower environmental requirements than China; but the big selling point for the last 20-odd years seems to have been more that you're allowed to manufacture there and they have a competent workforce rather than that the wages were amazingly low.

If you study the last 5k years, then the real question how on earth did the Europeans (primarily) and then the Americans managed to stay ahead of China for as long as they did (the "Needham Question").

Confucius came before Plato and most important discoveries came from China. The two wrote a the "good citizen" ought to be and how a city/country/empire ought to be run. Even meritocracy has been traditionally stronger in China, over centuries.

In the west we're talking about it since Homer, but in practice has been applied sporadically, while China has been much more consistent.

I don't think it's entirely down to that. They have extremely optimized supply chains: https://www.youtube.com/shorts/h7McXnWRCQY

China's labor costs are low for most labor-intensive manufactured goods that higher-income countries import from them. They're high for most labor-intensive manufactured goods that China imports from lower-income countries. It's all relative. Not all manufacturing is super polluting (nor is all manufacturing labor-intensive), but if you tried to replicate a non-polluting labor-intensive Chinese factory's cost structure in a high-income country, you'd still run into the problem that the workers you'd need to hire have better options available.

I'm not sure how true is this claim about weak environmental laws. I don't have any data to back this up, but I was in China in 2013 and two years ago and the difference in air quality in major cities is staggering. So, maybe they destroy the environment but for sure they no longer do that near the big cities.

Is GDP per capita really a good proxy for labor costs?

it can be, if you control with the Geni coefficient.

However large parts of many countries is rural, and different amounts for different countries, and that tends cause control issues.

But in general, a low Geni coefficient and a high GDP per capita means labour costs are high.

Yep. https://ourworldindata.org/grapher/median-daily-per-capita-e... for example. Although note the log-log axis which undersells the gaps between countries.

You mean like building an AI data center in the middle of a residential area, and fitting it with gas turbines that deafens the entire neighborhood?

does demolishing homes to build data centers count?

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