Well, if they want to learn from the US, they should ship their manufacturing capacity and intellectual property off to their geopolitical rival for short-term monetary gain.
China was actually trying to heavily establish offshoring in the Philippines—but that has seemingly dried up with the increasing South China Sea tensions.
I've never sensed any real desire for China to offshore to the Philippines, given its military alliance with the US. Maybe they dangle the prospect from time to time to try to pry the Philippines away. They have much friendlier targets in Southeast Asia, with Thailand and Malaysia at the top of the list.
A lot of people don't know this but one of the strengths of China is their huge expat community all across Asia.
When Dutch people arrived in what is now Indonesia in the 16th century they ran into Chinese merchants- the only locals who could keep up their mercantile endeavours.
A massive portion of them have blood and political relations with HK and Taiwan, and the younger generations don't have the same level of attachment to China as older less educated Nanyang Chinese do.
You can see this in Singapore and Thailand, with Millenial/GenZ Nanyang Chinese who can't even speak Mandarin anymore and almost entirely consume Western media.
In Malaysia, PRC nationalism is stronger, but that's in reaction to horrid race relations between Chinese and Malays/Bumiputera due to policies like "Ketuanan Melayu", memories/experiences from the various race riots of the 1960s-70s, and also the insularness/otherness of the Chinese community compared to other communities in Malaysia.
Not only that, but the Philippines has a tiny manufacturing sector compared to other major SEA economies. [1][2] I wonder if grandparent was thinking of a different country.
> I wonder if grandparent was thinking of a different country
Nope! I was speaking of offshoring mostly in the services industry, not the manufacturing industry[1]. Things like call centers (as you linked.) Chinese companies like BBK use Philippines call centres to serve customers in English-language markets. Which isn't at-all uncommon—the US does the same thing—but China hadn't been doing much offshoring of any kind until the last decade, and the little they have done has focused almost solely onto the Philippines.
There's also something that you might not exactly call "offshoring", but it's a related idea. It's a combination of "exclave-building" and "foreign investment": Chinese companies responding to increasing levels of Chinese tourism in the Philippines by buying up Filipino companies (most visibly in the hospitality industry, but also everywhere from construction to finance) and modifying those companies to cater more to Chinese-audience interests; then, within China, promoting tourism to the Philippines — and specifically to those cities they've built up a presence within — to increase ROI on those investments. From a Filipino perspective, this was kind of a virtuous cycle, as it resulted in a lot of money being pumped into their economy. But this too has now sharply declined.
---
[1] But why hasn't China begun to outsource manufacturing yet?
AFAIK, it's because the Chinese manufacturing sector has so much inertia — so much built up talent, so much invested CapEx, so many local partner relationships, so many achieved efficiencies of scale — that even if domestic labor prices seriously rise within China, it'll take a long time before companies are willing to bite the bullet and invest in moving any of that.
And it's also a bit of a chicken-and-egg problem: if you first offshore some middle step of manufacturing, the rest of the manufacturing process would still be cheapest for you [with your existing China-based processes] to continue to do in China; so now you'll have to ship raw goods out to the offshoring country, and then bring processed goods back into China for finishing. And during that, you'll be in competition with "full-pipeline Chinese" companies that aren't bothering to do that.
IMHO I'd mostly only expect China to offshore steps that either exist at the beginning or end of a manufacturing process. Especially origination of raw goods, e.g. mining. Which would seemingly be the long-term goal of China's infrastructure investments in various African countries.
The English speaking call centers are probably better described as service imports than offshoring. There are no English speaking call centers based on the mainland to begin with. English speakers on the mainland would likely find much more lucrative opportunities than working in a call center.
The US government has put a lot of effort into isolating China from the Phillippines. It's just statecraft and covert influence campaigns, nothing to do with the moral supremacy of anti-imperialism.
This comment ignores the facts of Chinese naval activities that many of their neighbors, including the Philippines, are wary of. You can say that US diplomacy is taking advantage of these facts in a way you don't like, but pretending the facts do not exist makes it necessary for people who do know them to ignore you.
"Ignores" is a strong word, I did nothing of the sort.
The Phillippines has the opportunity to deal with their relationship with China themselves, or the US can whisper in the ears of its leaders to take certain actions, making promises to them that make the offer all but irresistible.
The way you framed your comment makes it seem like you think the Phillippines is what, too noble of a country to bend under US influence?
"Ignores" may or may not be a strong word, but it's certainly the most accurate one I can think of to describe what you did. You ignored it. As in you failed to account for what is called outside of China "the elephant in the room." Kind of odd that you find it triggering. It's almost as if you are not being entirely honest.
> It's just statecraft and covert influence campaigns
I'm sure that has something to do with it, but such campaigns are catalyzed by china's military aggression in the south pacific. Morality is an afterthought.
> Unlike earlier psyop missions, which sought specific tactical advantage on the battlefield, the post-9/11 operations hoped to create broader change in public opinion across entire regions.
> ...
> Nevertheless, the Pentagon’s clandestine propaganda efforts are set to continue. In an unclassified strategy document last year, top Pentagon generals wrote that the U.S. military could undermine adversaries such as China and Russia using “disinformation spread across social media, false narratives disguised as news, and similar subversive activities [to] weaken societal trust by undermining the foundations of government.”
>The US government has put a lot of effort into isolating China from the Phillippines.
Let's not forget that some of China's isolation is self inflicted. China's nine dash line map, claiming 90% of the South China Sea, only drove their neighbors into the US's open arms.
totally agree, you have to so naive to believe it's not US gov's influence that's maneuvering this behind the scene, just like in Japan, South Korea and other China's neighboring countries.
Confused about what point you're attempting to make here?
Political conflict with a trade partner obviously leads to reduced trade, no matter the parties involved. What part of that statement are you taking issue with?
> Looks like militarism and imperialism are not compatible at that crazy new 21th century world
Your faux confusion isn't really impressing anyone. Is the US, the most militarist and imperialist nation in the world by far at the moment, "compatible" with the "crazy new 21st century world"?
I've also yet to see any practical examples of Chinese militarism or imperialism. I keep hearing that it's going to start happening any day now, but then it never does. What I do see is the hegemon (the US) trying to take down a rising superpower via economic warfare, and by creating instability in the region - a typical behavior of a militarist and imperialist nation.
Hong Kong. Or the many "shadow CCP police" instances in other sovereign nations.
Or did you just conveniently ignore those? Just because they don't wear uniforms and march in lines doesn't mean there isn't power projection going on.
Its not faux. I'm genuinely asking what about the original comment you disagreed with. It didn't really have anything to do with what you're talking about, so, Im wondering what connection you're trying to make.
Do you think political conflict makes trade better, and are using the US as an example? It doesn't seem like you're disagreeing with the original premise, but rather just aggressively responding with a tangent.
You've pointed out what the US is doing. That's good, but you're clearly biased, so let me tell you two things that China is doing that is contributing for that instability you've mentioned: claims in the south china sea that no country would accept if it was done to them and a major naval build up.
You need two to tango and both the US and China are dancing right now. Anyone only blaming one side need to stop for a second, take their US or China tinted glasses, and look again at the problem.
> Anyone only blaming one side need to stop for a second [...]
When it comes to military coercion (wars, threats), and imperialism, it only takes one bad actor to cause problems.
When there are two sides, or three, it just means more actors willing to push around everyone else.
Albeit, they amplify each other. Their respective needs to dominate encourage each others' aggressive tendencies. And it is much easier to justify/ignore/repeat misbehaviors when there are other aggressors to point at.
The point I was trying to make (probably made a bad job at it) is that there is more than one bad actor in the Pacific and the person I replied to only blames one side.
Sure, the US has their bases there (many since WW2), but we can't blame the US alone when we also have China making threats and claims that scare the heck out of other countries. The US doesn't need to move a finger to have Taiwan or Philippines on their side... these countries know what they're up against and will, for obvious reasons, want to have a "big guy" on their side.
In a few years China will not only have US bases around them, but also a handful of countries that won't side with them on anything. And that's how the next version of the "Pacific NATO" will be created... the US will of course take advantage of it, but it could not exist without a China that makes overreaching claims, threats, and their huge military.
> it could not exist without a China that makes overreaching claims, threats, and their huge military.
Good point.
Year after year, China was outpacing the world economically in numbers and strategic position.
Their future appeared to have no ceiling.
But they self-sabotaged by reverting from quietly accumulating strength to loudly showcasing strength via consolidation & provocation.
Despite no pressing need, they amplified military risk, economic & technological friction, undermined trust & provoked intense global resistance. The strategic value they destroyed is immense:
Poof! The presumed “Century of China” looks very different now. More like another Cold War.
Take a look at a map of US bases around China and then try to find any Chinese bases near the US, and you’ll understand who’s “militarist” and who isn’t.
America has been sabre rattling about the South China Sea for two decades now, a sea named after China that China has sailed through for some 4,000 years.
Is it any wonder that China builds out a navy to defend waters off its own shores that America has crossed an ocean to patrol?
I'm not particularly anti-US, just an observer of the world and history in general. Post WWII the US has been number one and it wants to keep that crown despite China advancing faster than any other nation for the past decades.
Historically the South China Sea was named that in English because the British just sort of considered everything along the coast "China." This included Thailand (then Siam) and Taiwan (then Formosa). After Vietnam fell into separate kingdoms in 1533 France and Spain claimed ownership of a huge chunk of the waters for quite a long time until the Japanese imperialist era started in 1868. Chinese assertion of ownership came about after negotiations in 1953 when France said Vietnam had no claim on anything offshore and wouldn't let the Japanese return the Spratly Islands to Vietnam (then French Indochina) and insisted Japan hand the islands over to the French directly.
The language used to describe and name things is vastly more powerful than people give it credit for. Just because the British were lazy in their administration and named it after something else nearby doesn't mean that the entire sea belongs to the current Chinese state.
> Is it any wonder that China builds out a navy to defend waters off its own shores
"Off its own shores"!? Is that what the kids are calling it these days? [0]
As an "observer of the world", I suggest checking exactly how much and how far the PRC has been claiming exclusive ownership over waters that are closer to their neighbors' shores. (Neighbors with their own ancestors who probably did even more sailing.)
I found a map from a deleted Reddit account with a lot of replies about how there aren't any US-controlled bases near China. It even had one in China. I'd like a link to an accurate map since I couldn't find one.
From the list I can see on Wikipedia, all of the nearby bases are in Korea and Japan.
More useful might be a map of US forces near China, not caring about who owns the base. And some comparable maps from the last 50 years to see how it's changed over time.
Most bases have been there since before you were born (probably) and before China was a rising power.
In any case, my point is that you only attribute fault to one side, when you have the other side making claims and starting to flex in front of smaller countries. Let's cut the BS here, that is not China playing nice and promoting stability.
It also doesn't take much to understand that the smaller, way less powerful countries that feel threaten will try to find allies. Who's the other big guy in the Pacific? Of course they want the US to be near them and on their side in case shit hits the fan.
This reminds me of Russia, which invaded Ukraine to keep it under their control, but then is surprised to learn that their actions made Ukrainians dislike them even more and are shocked that other countries that could rushed to join NATO. People like you course blame the US alone, missing the fact that NATO would crumble (like it was already happening) if Russia didn't make weekly threats about nuking European cities or actually invaded their neighbours.
See, the problem with this is that he never did threaten that. It's CIA propaganda. Indeed such a threat would make zero sense even logically, since from the standpoint of China (and the US State Department) Taiwan _is_ China.
The US's official public position on the One China Policy is a diplomatic front for the benefit of US relations with the PRC. The US maintains diplomatic relations with Taiwan through the American Institute in Taiwan, an organization owned by the US government and staffed by members of the state department.
Xi Jinping opened the Chinese Communist Party's twice-a-decade National Congress on Sunday by pledging to never renounce using force to take control of Taiwan
Chinese President Xi Jinping has met former Taiwanese President Ma Ying-jeou and said that outside influence cannot stop the “family” reunion between Beijing and Taipei....Beijing views the self-ruled island as a province that must be reunited with mainland China, and it has not ruled out using force to assert its claims to Taiwan.
China's "reunification" with Taiwan is inevitable, President Xi Jinping said in his New Year's address on Sunday, striking a stronger tone than he did last year
Chinese President Xi Jinping bluntly told President Joe Biden during their recent summit in San Francisco that Beijing will reunify Taiwan with mainland China but that the timing has not yet been decided
I don’t see anything in any of this that contradicts my claim, although I can see how you were misled by the wording. “Never renouncing the use of force” is not the same thing as “threatening to use force”. Put bluntly, all China has to do to reunify with Taiwan peacefully is grow its economy and wait for another decade for the bottom to fall out here in the US. And yes, it is inevitable that they will reunify, and almost certain that it’ll happen without bloodshed unless the US makes them believe unrealistic things about an island right next to an industrial colossus 60x the size being able to somehow “beat China” militarily with or without our “help”. I pray to god Taiwan doesn’t believe this because it’ll be utterly and completely destroyed otherwise. Shit the US couldn’t even beat the Taliban or Houthis. What makes anyone believe that it can even pose a significant threat on the other side of the world?
The idea of reunification is less popular than it's ever been in Taiwan since Taiwan's Nation Chengchi University started polling in the late 1990s. What you don't seem to understand is that unification is most supported among the older generations in Taiwan. With time, Taiwan will only become less open to the idea of reunification as the older generations die off. Currently less than 10% support the idea, down from nearly 20% two decades ago. You've likely never met a Taiwanese if you believe the Taiwanese population is open to the idea.
The US has also never engaged with the Houthis, except to protect marine shipping. There was never an attempt to "defeat" them by the US.
This is more of what I'm talking about. It's evident you've never talked with a Taiwanese. The younger generations of Taiwanese don't oppose the idea of reunification because they don't like China, due to this idea of US propaganda you have, but because they don't feel Chinese, due to living independent from the PRC for their entire lives. Have you ever asked yourself why they would care to entertain the idea of "reunification" to a country they had never been a part of?
Approximately 1 million victims (mostly civilian) just in this century, with trillions spent on wars. Multiple continuous wars since WW2. Iraq (2x), Afghanistan, Libya, Syria, Yugoslavia, Korea, Cuba, Vietnam, Grenada, Panama, Somalia, Haiti. Multiple proxy wars on top of that. Need I continue?
Umm.. merrily bombing the middle east ? There are occupation bases in Syria merrily looting oil. And selling $20 billion in weapons to bomb the middle east even more. Americans seem to have blinkers the size of titanosaurs and a "I cannot see it" attitude when it comes to their military.
Merrily is a slightly biased way of putting it I would say, but ok, it does happen, one can dispute why.
Looting oil in Syria, I didn’t know this, do you have a source?
Now, we are comparing, right, so let’s list what china is doing, shall we?
Invading multiple neighbouring countries? Check. (Isn’t that the definition of imperialism?)
Exterminating populations considered hostile? Check.
And I’m not even talking about Africa, where “colonialism” wouldn’t necessarily be an exaggeration.
I do think that, today, China is the most imperialist.
The US is far from a model, mind you and Europe also did significantly more horrible things in the past, but I’m talking about today.
Which nations has China "invaded" recently ? Kindly elaborate. Please note that the U.S. has occupation bases in both Iraq and Syria presently. U.S. military and intelligence has directly and in-directly killed more tens of thousands of civilians within the last decade in the middle-east. (I won't even go into the Syrian war sponsorship since whatever Obama did is "old news" to Americans now)
Looting of oil - there are several sources. But if you don't believe them - find a Syrian on telegram and ask him.
It was reasonably well reported that Delta crescent energy extracts oil from occupied Syrian oil fields - of-course passed off as propaganda in helping the Kurds in the U.S. media.
Hello, Yemen ? The full sanctions block and complete intelligence analysis, weapons and targeting given to PMC's and "allied" forces causing the deaths of tens of thousands of people ? This was an extraordinary extermination of the civilian population that got black-holed in the U.S. media. Of-course any time the population resisted, they got bombed - even weddings.
China's imperialism is orders of magnitude lower than the U.S. Its like comparing a ravaging T-Rex with a stubborn mouse.
PS: The U.S. has now merrily resumed bombing Yemen again since the last few months. Yes, I use the word "merrily" because executives of the American military sector are happy about this. Utterly no bias there, just point-blank honesty.
And again, I’m not saying the US are not imperialists, and they were the most imperialists for a very long while, but I really think China beat them. They still have less means to their imperialists ambitions, but their ambitions are by far bigger than these of the US nowadays.
In the end the conversation is a bit ridiculous, they are both very much imperialists, and it also depends on how you measure it. Russia is, from a political point of view, probably even more imperialist, they just have less means. The ratio means/ambitions of china is what put them at the top of this very sad list for me.
I didn’t know about the syria oil fields, I can’t even say I’m surprised though.
Please do not conflate territorial disputes with "invasion". When has China started bombing their neighbors - or any other nation for that matter ? At-least their territorial disputes are with the the nations neighbouring them and not nations across the world.
Well, the recent US claim of national ownership of the Artic seabed and Bering sea in contravention of long-established conventions of UNCLOS is even more imperialistic. But, hey, its OK when Americans do it.
Same with India before 2020 - China used to be India's largest FDI partner before the Galwan crisis.
After that, the Indian government "persuaded" Chinese players to sell off their Indian assets to Indian, Taiwanese, Korean, Japanese, and American players instead.
4 years later, the GlobalTimes - which was extremely provocative against India - has started pushing out content arguing that India should begin reopening it's economy to Chinese players.
I swear a lot of wars get started by guys like Xi who after seizing power internally try to seize power externally and it often ends really really badly for the host country.
Seriously, the leader of Germany in the 1930's, Stalin, Putin, Saddam Hussein, now Xi. All seized power domestically and then couldn't help themselves when it came to neighboring countries.
Is it me or is this one of those, only other people we don’t like do bad things.
You’d need to generalize the pop science to the British, French, Spanish and portugues empires then address the genocide of indigenous tribes by America, Canada and Australia
Obviously this is heated topic, but did it ends really bad for USSR under Stalin rule (until his death)?
I mean it was bad for many citizens but other areas were actually ok-ish considering war destructions.
I’m not trying to make point about Stalin. Just trying to find if this is really a rule, but my historical knowledge is pretty limited. Intuitively I feel any overpowered political entity end up like shit. But interesting to see real data.
If you ask the Russians the Brezhnyev rule was the best (stability, stagnation), with Stalin trailing him (won WW2, rapid industrialization). If you ask westeners, Khrushchev (space race, reforms) and Gorbachev (glasnost).
You could imagine an alternate universe where Stalin gets dysentery and dies. The USSR tells Ribentrop to f'off. And then joins the allies declaring war on Germany when Hitler invades Poland.
Also I forgot to add Mussolini and his designs on Greece, Balkans, North and the Horn of Africa.
In VN, Chinese manufacturers tend to compete directly with SK and JP FDI, so the RoI isn't too hot, and Chinese manufacturers face the same hurdles American manufacturers faced when entering China (eg. Forced JVs, ToTs, etc)
Vietnam and China have never been any more than allies of absolute convenience.
In fact, in one of the weirder turns of recent geopolitical history, the Vietnamese would prefer to be American allies over Chinese if forced to choose, and it's not even close.
It is not officially a recognized politburo. The Eastern approach to these top down systems is to have a overt power structure whereas such a structure is denied in the West even though as you say it is all in the open.
These are some staggering numbers: 52 thousand Chinese EV companies shut down last year.
Xi Jinping (successfully) stimulated EV and semiconductor manufacturing through massive government investment and loans. The problem is that so many companies were funded that they are now viciously driving each other out of business through oversupply.
Because the supply chain networks are so dense, each bankruptcy easily cascades because the company then defaults on contracts with vendors and customers.
None of this, of course, is good news for US competitors like Tesla. With such a large field of vicious competition, it’s almost assured that the small set of businesses that succeed will be able to outcompete globally with extremely low cost structure. We see this happening with BYD.
Other than BYD (which has a strong product market fit and a very strong technical foundation in both battery tech and automotive development), where can the competition export?
Every major automotive market has preemptively or actively placed tariffs on Chinese automotive exports straight from China.
SAIC, GAG, GAC, BAIC, BYD, etc will all have to either ToT IP, open domestic factories, or create JVs in order to enter most markets.
BYD completely owns the Chinese EV market in absolute numbers - and the competitors had to preemptively begin exporting abroad, which sparked trade wars and worries of dumping, which made it harder for BYD and other players to export "Made in China" cars
The chinese auto companies are opening factories in mexico to get around tariffs. Monterrey,the center of american and now chinese auto manufacturing, is the best performing economic region of Mexico because of it.
You see, there is a 1.5m-2m new car market right next to China, completely abandoned by western players. And another 500k-1m market in Central Asia, where General Motors neocolonialist monopoly is waiting for disruption.
Of course it's not US or EU-sized market, but realistically, in the best case scenario I'd expect China to have at most 20% of US or EU. Here, they can take it all.
> You see, there is a 1.5m-2m new car market right next to China, completely abandoned by western players
Which one? If you mean Russia (which by the way is only 600-700k), then those Chinese players face secondary sanctions in most markets which settle trade in USD, along with a lot of politically connected domestic players.
If you mean India, most Chinese players have been chased out or forced to transfer technology and majority ownership to Indian companies (eg. SAIC MG Motors India now being majority owned by JSW Group). Also, the dominant foreign players are Japanese and Korean with massive Indian government backing.
If you mean VN, ID, MY, or PH, then it's South Korean and Japanese JVs that have a dominant position along with govenenent backing.
> another 500k-1m market in Central Asia
Which is dominated by a mix of American (GM) and South Korean (Hyundai) JVs with UzAutos, Russian automotive players, and Japanese JVs with Pakistani+Indian players (eg. Toyota x Pakistani Army)
700k was the official figure for 2022, which, besides the obvious reasons to be an outlier, is also skewed by the fact 300k more cars were imported as "used" to workaround stopping of the official deliveries. It was more than 1m new cars sold in 2023, now it's 700k just for the Jan-Jun 2024.
> then those Chinese players face secondary sanctions in most markets which settle trade in USD
Yet the reality shows they don't really care much. Why should they, though? The big ones have the leverage of controlling the access to the Chinese domestic market, which is too important for the Western manufacturers. And the small ones are already effectively excluded (by the tariffs and such) from the markets that can implement secondary sanctions.
> Which is dominated by a mix of American (GM) and South Korean (Hyundai) JVs with UzAutos
There is no economic reason why GM dominates that market. GM produces too little cars, of a questionable design age and quality. The day someone is able to talk local government into a deal with favorable tariff conditions (not circa 100% import tax that exists now), GM business in Central Asia is dead.
> There is no economic reason why GM dominates that market
UzAvtosanoat (the Uzbek govt manufacturer) is the largest automotive manufacturer in Central Asia, and because every single Central Asian country has a FTA with Uzbekistan this puts them at a massive advantage.
It is UzAvtosanoat that manufactures GM, Hyundai, and other cars for the Central Asian market. Even BYD Central Asia has to partner and ToT IP to UzAvtosanoat for manufacturing and entry into the Central Asian market [0].
My point is that "Made in China" products are limited by export restrictions as every country has in place. What happens to the glut of cars "made in China" that cannot be sold abroad? This is the crux of the overproduction problem.
The secondary sanctions are certainly having an effect. The Russians themselves are saying that 80+% of yuan denominated transfers are being rejected by Chinese banks.
The US report 453 thousand bankruptcy filings in 2023. There are 33 million small businesses in the US. Etc, etc, etc. Big numbers are hard to put in perspective - which the very fine article was very careful NOT to do. Obviously it was not 52 thousand large companies but there again, one would need comparative numbers to say for sure. On top of which most single large corporations usually owns dozens to thousands of separately incorporated units. Who knows what that number is about.
The Chinese never intended all the companies to succeed. They intended that the market would force bad companies to die. The point is to replicate the bank system or the tech system and have a few extraordinarily large players the central govt can control.
The very last thing this was intended to do was be a corruption scheme. Why does everything have to be a conspiracy these days.
> Hengchi, an electric-vehicle (ev) maker owned by Evergrande, a failed property developer, told investors that two of its subsidiaries had been forced into bankruptcy. The group originally aimed to sell 1m evs a year by 2025; amid feverish competition it sold just 1,389 last year.
When you miss sales targets by 99.9% it’s got to be more than a competition problem
> When you miss sales targets by 99.9% it’s got to be more than a competition problem
It's fairly common across the EV industry in China.
BYD is an amazing product and makes good cars. The other manufacturers not so much, as is reflected in Chinese EV car sales [0].
That's why manufacturers like SAIC (MG Motors), GAG (Wuling Motors), etc have resorted to trying to export abroad because they cannot beat BYD domestically, but this faces hurdles as most other major markets abroad (VN, JP, SK, ID, IN, Brazil, EU, MX, etc) place tariffs on autumotiive exports, forcing Chinese manufacturers to either open entire factories abroad with JVs or quit those markets
Every factory SAIC, GAG, GAC, etc opens with a foreign JV is an equivalent set of jobs and IP lost in China.
It has to do with govt subsidy policy on making EVs that ended couple of years ago. Before that, every company with cash and even local govts entered EV manufacturing to avail the subsidies. Even when their core competency has nothing to do with EV manufacturing and even manufacturing anything. Same reason, some companies filled dumping yards with bogus "sold EVs", since repairing and keeping quality when being used will cost them more instead of making some substandard EV and generating fake sales cert.
Similar policy PRC used when building up solar and battery industries. Subsidise a hundred companies, and few will come out as winners. Reportedly with real estate issues and semi trade war economy is facing headwinds and PRC is scaling down subsidies.
> China’s solar industry is also grappling with oversupply. This year the prices of most components of solar modules have fallen below their average production cost.
This should surely be regarded as an opportunity to install solar panels at low cost while stocks and production capacity still exist.
If the profit margin is 10% then a 10% reduction in total material and labour cost more than doubles your profit margin if you keep your prices the same.
So how small a part of the total is the module cost? Even if you can only save 5% you still make more than 50% extra profit.
The price per watt for rooftop PV system installations varies dramatically from country to country in the west. Where I live in Canada the average cost is about $2 USD per watt installed (for a 7-10kW system). In Australia, the same system costs about $0.66 USD per watt installed.
That means for a 10kW system I'm looking at $20k USD in Canada vs. $6600 USD in Australia. That's such a huge difference that 5-10% cost reduction in Canada would barely make a difference at all. I have serious doubts that any Canadian household could recoup the cost of a big solar install over the lifetime of the panels vs simply investing that money in ETFs.
It might not make a difference to the end user but the installer would still make a more profit.
Also I doubt that you can compare Australian and Canadian installations that easily. Most of Australia is a lot closer to the equator meaning that the same panel will have a higher average output there than in Canada.
Anyway, I'm not in the US. My question was a general one about taking advantage of these economic troubles, treating them as an opportunity for someone to make a profit rather than simply regarding them as a problem for everyone.
The Canadian price seems a bit high, comparable with high cost Norway (where I live). The online calculator I have just checked is offering a 6.5 kWp system for about 10 kUSD, so your 20 kUSD would buy 13 kWp. I know why it's expensive in Norway, skilled manual labour costs are high, is that the same in Canada?
It's similarly difficult to justify though. At the sorts of electricity prices we had in Norway before 2022 it would take 20 years to pay back but if the trend to increasing rices continues that could fall to as little as 7 years.
Also I doubt that you can compare Australian and Canadian installations that easily. Most of Australia is a lot closer to the equator meaning that the same panel will have a higher average output there than in Canada.
The costs I gave are for the ratings of the panels themselves. They don't include differences in production due to sunlight hours. If you include those I wouldn't be surprised if the Australian figures were closer to 10x better than Canada once you factor in the sunlight hours.
Their graph off loss-making industrial enterprises looks slightly more dramatic than the underlying monthly data.
If you check the National Bureau of Statistics' data on 亏损企业 (月度数据 > 指标 > 工业 > 工业企业主要经济指标), https://data.stats.gov.cn you see that there is a yearly cycle where the number jumps in February: from 67,570 in 2021-12 to 132,371 in 2022-02 (January is skipped), from 91,222 in 2022-12 to 161,892 in 2023-2, and from 103,994 in 2023-12 to 167,895 in 2025-02. By plotting the last available month for every year, 2024 ends up sticking out a bit more than it will once the end-of-year data is out.
It’s pretty simple, Chinese companies need to lower Chinese wages, reduce costs, reduce profit expectations, provide lower cost shipping to ports, guarantee the quality of their product once it arrives in North America not pay when it leaves the factory.
We want $1 products again at dollar tree (not $1.25 tree), and better quality for less money.
Otherwise we will just make the stuff in the USA ourselves. One day we will get smart and export more TO China because no one in China trusts the quality of anything made in China
Personally, I have been coming more around to Chinese manufactured goods. It used to be low-end crap 30 years ago, but they are market leaders in many sectors today and probably even more tomorrow. I recently drove a Chinese (ICE) SUV for the first time and was blown away by the fit, finish, and price.
I remember as a kid hearing people throw around the term "Jap crap". Not for a long time.
China has been going the same way. They are now capable of making very high quality products. Taiwan went down the same route, South Korea too.
In the long term, it's not China that has a problem, it's complacent western manufacturing companies. It's not just a failure to innovate. Some have used their market power to exploit consumers such as the US vehicle manufacturers pushing people to 'trucks' because it served their own interests. They abandoned the small (read sensible) car market. Top selling car recently in Brazil was the BYD Seagull - knocking Ford off.
There are a lot of Chinese EVs on the roads here in NZ. I can assure you they aren't bursting into flames. For cheap and high quality, check out the BYD Seagull.
Hifi amps were the first high quality (and very reasonably priced) Chinese goods I took note of.
I think most of the world is aware that all electronics including things like iPhones are made in China, even when they are not. It is just assumed, except for a few Japanese brands people might assume are actually made in Japan because they were historically.
America has a seriously dated infrastructure system, practically no public transit, a car centric system that is falling apart at the seems as roads and bridges go into disrepair, and China is building infrastructure that Americans don’t even dream of.
But yeah keep believing China is full of “tofu dreg” buildings or whatever bullshit the Feds want you angry about lmao
1.) recent 2024 huge scandal regarding oil container trucks swapping out cooking oil with cancerous industry oil without cleaning the tank. the trucks ended up covering up their tank with tarp so people can't see what kind of oil these trucks are carrying.
2.) videos of Chinese EVs just simultaneously combusting in the streets while driven or parked
3.) toxic chemicals found on Temu/Shien clothes, found by South Korea and US
Judging from your post alone, you seem to have started with a conclusion ("China will collapse") and sought out evidence that will support your prejudgment. Also, the statistics you cite are less sophisticated than the statistics you'd find on a rag like CNN, so it's not even apparent whether you've done any serious research.
Does anyone know if this means hot deals on extra EV inventory?
I tried to buy an electric golf cart which looked like a Hummer on Alibaba, but importing it (getting it past customs) was challenging. They had me at MP3 player!
If I could buy an EV for $3k, it would be worth the hassle with charging infrastructure and hiding an illegal vehicle from the coppers. </joke>
Assuming you could even get a Wuling Mini road-cleared, you will need to pay out of your eyes in tarriffs and import taxes, making a used Tesla Model 3 roughly comparable price wise.
It’s amusing to see discussions about exotic markets like this. While I don’t agree with the CCP’s policies, I believe the issue is more related to free-market dynamics. Given today’s inflation, potential buyers are saving every penny. In China, unlike in the West, people spend based on their expectations and income, and they never resort to deficit spending.
Considering the market situation and geopolitical factors, it is foreseeable that labor-intensive, low-value-added manufacturers are going bankrupt. Frankly, Europe and the US face similar situations.
Regarding Taiwan and the South China Sea, the distrust of the East among Chinese people is influenced by historical experiences with North Korea, Japan, and Vietnam. However, in today’s world, war is a significant and serious issue, and ordinary citizens do not want to face its bitter consequences. What confuses me is that Western media often portray China as a threat, while Chinese mainstream media exaggerate these reports, deepening mutual hatred.
To be fair China is a threat. For the last 200 years we've lived in a world dictated by the West. All other nations have always agreed to abide to the Western world view.
Ofcourse China is at its core only a symptom. The world economy- and everything that goes with it- is irrevocably shifting to Asia.
It's kinda offensive to see Americans talk about Vietnam or India. They see them as vassals not independent nations with interests of their own.
> What confuses me is that Western media often portray China as a threat, while Chinese mainstream media exaggerate these reports, deepening mutual hatred
There is a mutual lack of trust and dialogue amongst Chinese and American decisonmakwrs - most of whom started their careers in the late 1980s/early 1990s and thus lack modern in-depth experience in the West or China respectively.
Both the Trump and Xi admins both bled competent advisers at the expense of populist and hawkish advisers, which degraded the ability for nuance in both the US and China's policymaking.
Imo, the biggest issues have been the MFA/State Dept and the CMC/DoD in China/US. Both had massive attrition of experienced policymakers in the 2016-19 period, which caused a game of economic brinkmanship.
China's manufactures finding the winners. This is the system working as intended - create many producers in xyz sector via subsidies, hardcore (involution) competition from 1000s in different provinces innovate manufacturing to bare margins, losers go out of business/ get bought up by better competitors and consolidate like _intended_ outcome of other PRC industrial policy. TLDR Set up competitive environment to force producers speed run to a $250 model-T while everyone else could only make cars for $1000. Have so much competition to force manufactures to improve processes/drive down prices/affordability in short time and then settle with a few large but sustainable survivors that are globally competitive / can (out)compete with western incumbents.
But what happens to the failures, especially since they are overwhelmingly subsidized by local governments?
Shanghai (SAIC), Jiangxi (BAIC), Guangxi (GAG), Guangdong (GAC), Hebei (Dongfeng), Beijing (BAIC), and other prefectures are putting tens of millions of dollars in SoEs that cannot compete with BYD domestically, and face preemptive hurdles entering foreign markets.
If these were private players, it wouldn't matter as much because they could be safely shut down, but these are mixed public-private, and this means a lot of misallocated capital due to political considerations.
Ideally, all these prefectures could better utilize that equivalent amount of money building domestic consumption instead - like I pointed to you before, the median household income in China is still around $350-400/mo in 2024, so even with a loan, a cheap class-A vehicle like a Wuling Hongguang Mini is still pricy.
Instead, these players are forced to export abroad leading to unnecessary trade wars and causing other countries to either limit ToTs with Chinese companies, or force Chinese companies to ToT to domestic players abroad.
This is the same story in PV Cells, Analog Chips, Mobile Phones, etc.
Some local jurisdictions, especially wealthier ones will continue to misallocate because they can. For sectors like ev/pv/chips, they pay back in reducing imports/dependencies, some level of even stupid pork barrel waste should be expected/endured, i.e. US fine with 700B fossil subsidies because strategic. 700-800/m couple income fine for 4000-5000 budget EV (new). Realistically in a few years when EV enter secondary market, they'll be 2-3k used. E: (apology for edits, out and about) 6m / 50% of annual household 8500-9500. Vs US median household income of 75k (round up to 80k to be generous) and average new vehical price of 50k. Of course they're not equivalent quality goods, but the point of driving costs down is to make 4k-5k tier cars possible.
>Instead, these players are forced to export abroad leading to unnecessary trade wars
This is very necessary, no reason not to take share from incumbent car makers, especially in RoW markets. ToT domestic players fine (E: as in fine to jurisdictions that, especially ASEAN / more integration), especially with current sanctions/potential, PRC FDI via recirculating USDs, better use now than risk lose later. E2: Let's not pretend PRC trade wars are any less strategic than US trade wars (like semi). PRC EVs sells -> EV piles -> energy infra -> sensors/fusion -> telco.
It's not some - it's a lot. And a number of these are not wealthy prefectures - Guangxi, Jiangxi, Jillin, Anhui, and Hebei underperform compared to the Chinese average on social indicators and economic health.
The amount of money spent to subsidize EV cars made by GAG, FAW, Dongfeng, Changan, Chery, JAC, etc that most Chinese buyers just don't think about for EVs when they can buy a BYD is staggering, and could be better used by the prefectures I listed to better living standards or further increase consumer spending via DBTs or a better welfare system (which itself has been devolved to prefectures since the 90s).
> This [export] is very necessary
Absolutely, and this is why every major automotive market (US, EU, TR, MX, BR, SK, JP, VN, ID, IN, ZA) has already or is in the process of closing their markets to direct "Made in China" automotive exports (as well as other sectors like renewables, consumer electronics, pharmaceuticals, etc). Why should these countries lose their domestic champions at the expense of Chinese players?
What large greenfield market can Chinese manufacturers directly sell to? And you can't say "Africa" - it's not a uniform market, and Chinese companies face competition from (depending on the region) Turkish, Japanese, Korean, Brazilian, Vietnamese, Indian, Emirati, European, South African, and American competitors.
This is the crux of the problem - the very low median household income forcing players to export.
Either the collective billions in subsidizes are deployed to push Chinese median household incomes to at least Malaysian or Mexican levels (~$10,000/yr) or even Thai levels (~$6,500/yr) in order to consume this excess capacity, or keep burning money subsidizing laggards while alienating foreign markets and partners.
> Let's not pretend PRC trade wars are any less strategic than US trade wars
At a high level it is, but the governance is atrocious. Just look at the First and Second Big Fund for example.
And anyhow, Chinese manufacturers in these sectors then face similar tariffs like EVs in the markets I listed above under NatSec or Dumping grounds, which in turn drives neighbors further into the US camp (eg. VN after the 2011 standoff and the Techo Canal, JP after Senkaku Diaoyu, TW after the 2014 trade war, SK after the 2017 trade war, India after the 2019-20 Galwan crisis, PH after the PoGo scandal, ID and the US CSP, etc).
This in turn means you guys will escalate under the fear of being encircled, which pushes those countries to further up the ante. The same fear Chinese nationalists have about the US is the fear those countries have about China.
Either way, this means China both loses potential economic partners/markets AND exacerbates an arms race.
It didn't have to be this way, but the MFA's and CMC's tone change since 2014 has drastically deteriorated China's relations with it's neighbors.
Excuse typos and lack of structure. Just long mobile typing.
>It's not some - it's a lot.
It's a lot now, because the race just winding down. It will be some later, if local gov can dig hard enough to eat shit on land finance, they can learn to eat shit on losing out on race for XYZ strategic sectors. Are we going to pretend this initial overcapacity -> cull -> consolidation cycle hasn't happened before? It's textbook. Like bro, it's only been ~5 since capacity explosion ramp, last few years was shaking out winner, it will take a few more years before losers accept they've lost. You're portraying as some long term sunk cost that will never end, when cycle is barely even short term, and local govs are historically pretty good at ditching dead ideas. A few years to adjust course is about as responsive as governance can be. Everyone knows model of "quality growth" = lots of regional hubs up for grabs in many industries PRC wants to compete with western incumbents on, local gov going to ditch dead weight and try to grab the next big thing. And you know what, some are just geographically rat fucked and won't make it.
> staggering
Naw, it's good deal. I surmise you're thinking about CSIS report that overestimates subsidies per vehicle (nvm subsidies are drawing down), a few $1000 per vehicle last few years now made 20k-30k quality vehicle accessible to 10k buyers. Fuel savings on 11k avg annual kms -> EV is ~$400. Proliferating new energy vehicles to 50% market share in short term is going to pay for itself in terms of fossil imports and energy secuirty.
> Why should
They wouldn't, they'll do what they do, and PRC glad to FDI their way, and entrench PRC components into global supply chains. Are you going to pretend all those competitors are on the same cost:value level as PRC? Just randomly making lists doesn't make a compelling argument.
> forcing players to export
Except what are most of the auto export? ICE vehicles, mostly from western manufactures with idle PRC capacity because PRC market not buying their ICE after shifting to EVs. Meanwhile PRC EVs selling abroad at reasonable markup, we're already seeing shifts in ASEAN against SKR/JP leaders. Where's the NEV excess capacity, oh right, it doesn't exist. Most % of NEV prorduced still absorbed by domestic market, less % export vs other automakers.
> consumption
Meanwhile I'm sure know the argument that PRC consumption about OECD average with proper accounting, that western wonks like to ignore to push the lack of consumption narrative. All the while disposable income according to states.gov.cn that you link frequently is growing at health clip YoY. And for whatever reason, you seem to enjoy obfuscating per capita to USD instead of PPP or local currency and use local prices for comparisons. Like it matters BYD dophin sells for 20k USD in malaysia but 10k USD in PRC. Lot's of shit just much cheaper in PRC since PRC producer. Like PRC doesnt magically overtake US on protein consumption because they spend all their money on protein (yes they love pork), but also because they consume a lot of stuff, most stuff just happens to be cheap.
Was First and Second Big Fund attrocious? It seemed so until export controls forced PRC semi to coordinate, and then they realize big funds built a shit load of pieces, but just never connected them. Dumping 500b into semi over ~10 years to setup conditions to move away from 300-400B PER year semi impmorts is fair deal, especially considering how PRC indigenous semi doing last post sanction compared to how CHIPs doing.
> or keep burning money subsidizing laggards while alienating foreign markets and partners.
Again is it burning? Again subsidies phasing out, and actually effective in driving down durable unit cost. Is it alientating foreign markets or partners? Seems like tike most are fine with following PRC JV path, taking PRC FDI, and so far seems like PRC is fine with that arrangment too. Except you know, US whose allergic to anything PRC. Are we also ignoring PRC exports still hitting/maintaining near record levels, including with India. Is it any worse than US spending 5%+ GDP than average healthcare spending for less life span, i.e. ~1.4T annually. Or the aforementioned 700b on fossil subsidies. Is PRC spending a 200B on NEV subsidies that will save trillions in keeping money into PRC compnaies and energy import costs in perpituity... burning money?
In similar lens, was First and Second Big Fund attrocious? It seemed so until export controls forced PRC semi to coordinate, and then they realize big funds built a shit load of pieces, but just never connected them. Dumping 500b into semi over ~10 years to setup conditions to move away from 300-400B PER year semi impmorts is fair deal, especially considering how PRC indigenous semi doing last post sanction compared to how CHIPs doing.
> neighbours
And does it matter if SKR/JP/TW/PH goes into US camp? The point is to bleed the first 3 that are high end export competitors. US security partner gotta US security hedge regardless. That's less an economic battle more a military force balance, one which PRC is increasing gap in theatre. Whose To Lam's first visitor? To PRC. I think blob wank thinks PRC is really interested in playing nice with US partners in region, when PRC see knos no amount of playing nice is going to get US security architecture out of east Asia short of force. In the meantime (peacetime) focus on eroding them as economic competitors. And we can all pretend PRC is making a folley not using carrots when the only real solution, is a much bigger stick.
It was always going to be this way, PRC was always going to move up value chain to compete with tier1 economies/exporters. PRC was always going to move up value chain, it was always going to take a swipe at leading incumbants, and at PRC scale, it's was always going to aim for her disproportionate share of pie. In a world where PRC is adding more skilled workforce than rest of the world combined + going for 11 on involution driven industrial output is also world where PRC is poised to win the arms race. She simply has too much people not to do all these things and still have 100ms farmers/informal economy. There was never going to be anything but (arguably zero sum) fight for many pies.
TLDR We've interrogated this before, I don't find you rehashing latest blob narratives on PRC behaviour compelling. I don't find their conclusions/analysis particularly sincere/unmotivated. Trade numbers seems to show PRC is building lots of economic partners AND winning the arms race. Meanwhile US security architecture straying further and further from what was deemed neccessary (AGILE, NGAD, lol missiles in vietname) while acquisitions/prepositions in theatre by US+co is being out paced by magnitudes by PRC. I sit any wonder defense blob last couple month started referencing PRC as no longer "pacing power" but "past pacing". That's what happens one PRC shipyard builds more than entire US shipbuilding combined.
> You guys
Again, I'm Canadian, like you. I'm just not (a presumably American related/adjacent) recovering policy wonk. Anyway feel free to have last word. You're still a very intelligent posters with IMO very obvious biases, as am I.
1.) Internal consumer demand for China has collapsed, due to real estate debt overhang, local government debt overhang, increasing job loss, and incoming and increasing college graduates. It's estimated that 80% of this year's current graduates are jobless.
2.) External demand for China has been decreasing, 3.5T total export in 2022, only 3.3T in 2023. probably below 3T this year. Due to geopolitical factors such as China allying with Russia, and increasing tariffs from every other country due to overproduction/overexport from China.
3.) EV (at 36B in 2023) is only 1% of value of all Chinese export (3.7T). Not going to rescue the Chinese economy at all. On top of that, only BYD is capable/making some profit, while every other Chinese EV is going to shut down in the next 5 years.
Work what? I think Ctrl+F China + collapse arguments still doesn't work.
1) Consumption is "sluggish", i.e. it's small positive growth instead of large precovid positive growth. It's not negative decline let alone collapse. Get off the FLG. Employment rate steady, including new grads at 20% accounting for those in school and not looking for work (i.e. the Chinese tertiary way), 40%-50% for graduate cohorts who takes time job hunting / not ready to settle. Which they will, given broad unemployments is steady, i.e. new grads get job after 1+ year and roll into genpop employment stats. There's 1% drop in new salaries in some industries, people are staying in jobs longer. "New productive" industry jobs, i.e. the high value ones set to drive PRC economy including energy, semi etc experience continuous growth. In aggregate positive, not fantastic, but also opposite of collapse.
2) Exports stabilizing after record covid highs, still only ~20% of gdp, i.e. PRC hasn't been (barely) export dependant for 10+ years at high of ~35%. If you follow brad setser, he'll note PRC exports probably being massively/deliberately hidden/under reported because two way data suggest much higher. BTW export dependant countries regularly over 50-100% export to gdp. Entire overproduction/overexport narrative is retarded considering how little PRC exports as share of GDP.
3) Who said EV was suppose to rescue PRC economy? PRC too big for 1 sector/industry to make difference. Collection of New productive industry jobs doing their part, sure. But generally when you remove RE drama, which they deliberately crippled, you get current modest 5% growth instead of previous 7-8%. Settling to modest growth is expected sooner or later. Modest growth (~5%) is enough to increase GDP PPP gap vs US. Most of projections on PRC passing US GDP assumes eventual modest growth + FX movements i.e strength RMB. Which they strategically don't want to because right now it's all about pricing out incumbant competitors in new export categories. Like CCP can get easy propaganda win by moving RMB band 5-10% to entier per capita $14000 USD high income range, but they don't because modest growth works fine.
Yes, EV export up 70% YoY but is minority part of exports, less than 1T out of 24T yuan total exports of which export itself is ~20% of 126T economy, aka export itself is not driving most of PRC growth. Maybe 0.5% of ~5 or 10% of new growth which is a lot, but also 90% of again, growth is happening not because of EV. If you remove EV success PRC is still growing, not collapsing. OP is pretending subtracting 5-1 is some negative collpase number, when it's just slightly less positive. When I said EV is not suppose to rescue the economy, I mean economy is not suddenly going to turn negative if you remove EV, or most of the new industries, which is just another rebranding for all the strategic industries in MIC 2025, most of which will create biggest economic impact via domestic substitution before exports.
Gasp! Random Chinese dinner anecdotes that their family business not doing well. Overworked complaining about being overworked. Much compelling. Wow. Also LOL @ quoting Chinese to insinuate I'm 粉红, I'm sorry, little pink/tankie, I guess you don't want dang to come find you.
Of course state media is effusively celebrating new industry export success as it's achieving major policy goals. It's acknowledging that they're new pillars "powering" the export economy as in contributing to significant part of new export _growth_. Which is not to be (mis)construed as these exports are "rescuing" a "collapsed" economy as OP insinuates which is retarded tier analysis. New industries -> some of of 1T/6T (yuan) growth last year from a 126T (again yuan) economy (>0.7% assuming PRC exported 0 of those things in 2022). As as incorrigible OP is, even he recognize this is around 1% of economy, i.e. most of growth is still internal, non export driven.
Ctrl+F is... copy paste? Complains about me using PRC instead of China in post where CHina is the... 7th word. I can't even accuse you of being LLM because even bad LLMs don't make such basic mistakes. Here's a reciprocal sorry - let's not waste each other's time.
I fail to see a specific news, the article cite a single example of a failed BEV OEM, there are many, it's perfectly normal that some are not good enough to survive. In our golden age of automotive we have had countless automakers, most have failed some have skyrocketed...
Aside overcapacity should be synonymous of low prices, I still wait to see here in EU prices like in the BRICS area for products imported from China. An example a BYD Atto 3 here cost a bit less than 40k€ while in Thailand cost a bit less than 10k€ https://asia.nikkei.com/content/1f9ed40b4b44745e1a39fafaf94b... such price delta have no justification in mere free market economical terms, have only political justifications NONE OF THEM acceptable by the civil society. I still wait to see LFP batteries prices drops like in China to have a well-sized home battery at a price cheap enough to make buying it convenient, let's say 50kWh for 5k€. Let's say 15kW p.v. inverter for 1.5k€ etc.
If China manufacturers goes broke we customers do the same in EU, and I suspect in USA to, simply to enrich some local cleptocrats.
Excess slack in productive capacity can be taken up not only with exports, but also with domestic demand side stimulus. The Chinese market is huge and can almost certainly generate demand for this productive capacity with proper fiscal policy.
Genuine question, if they have so much excess capacity and low domestic demand, wouldn't it be easier to just export to other countries? Or are there barriers put in place in the world stage that limits this?
A common bit of advice is to build one less of your widgets than what your customers will buy. You then meet demand (nearly!) and your price gets supported.
Chinese manufacturers on the other hand, seem to be following the "build it and they will buy" philosophy. When you do this, prices (and profits) head towards zero.
This is the exact opposite of the Toyota Way, where customer demand serves as a signal (Kanban) to produce a widget and deliver it when needed.
Let us assume they start dumping all their excess internationally. Do you think other countries will just allow china to flood the international market and drive other countries respective auto makers out of business? Other countries will raise tariffs accordingly until they reach an equilibrium that they feel comfortable with.
Not everyone makes cars. Shrinking the global market shares of the ones that do will make the competitors' economy of scale worse as they withdraw from the ROW to hide behind the trade barriers.
The CCP's current manufacturing policy is analogous to the modern venture capitalist approach of "subsidize the product until your competitors go broke, then reap the fruits of having a captive market by the balls", except the fruits have gone from "the power to set prices as a monopoly and extract a massive amount of profit" to "massive geopolitical leverage against countries that are dependent on your exports". It's a risky strategy because it's trivially countered by protectionist policies, but that depends on countries voluntarily refusing the free money that China is doing its best to shovel into your pockets. In other words, it's a bet that China's rivals cannot successfully resist short-term greed despite the huge and transparent long-term risks.
I would not say that this is trivially corrected. The latest news from Boeing is that American manufacturing has been obliterated. Rebuilding the skill and culture that has been lost is neither easy nor guaranteed.
> Not a good example because Boeing didn’t outsource.
No, that's precisely my point actually. Boeing is one of the very few companies that maintained its local manufacturing capacity. (to say that they "didn't outsource" is not remotely accurate)
Despite everything that was pointing in Boeing's favor -- culture, financials, market, reputation; it was taken over by the MBAs that put McDonnell-Douglas into a nosedive and now all of that is gone.
So now, let's assume that Boeing sees the light and wants to rebuild their manufacturing chops. Who do they hire? Who can they hire, who has the manufacturing expertise? When I worked at Boeing 25 years ago, the old-timers were invaluable. Most of those folks are dead and gone; my generation should be graduating into old-timer-hood in the next couple of decades but Boeing hasn't invested in us. Wages have been stagnant, software is easier, tiktok is more exciting, and the young generation is used to being bossed around by MBAs who don't understand the work.
If not Boeing, the once-shining-example of American manufacturing what didn't outsource, who can bootstrap our manufacturing renaissance?
It does not take long to build excellence in the grand scale of things. A culture with positive feedback that encourages good engineering with leadership recognition and monetary/equity rewards can produce a great company in less than a decade.
> who can bootstrap our manufacturing renaissance?
Look at SpaceX. You don’t need a great wizard of yore to teach you how to do things if you iterate and learn. They went from a joke 10 years ago to completely dominating and transforming the launch and LEO space industry.
Or, look at Boeing 70 years ago. They didn’t have a magic culture of excellence then either and it wasn’t bestowed on them by elders. They built it then and it can definitely be built again.
> They didn’t have a magic culture of excellence then either and it wasn’t bestowed on them by elders.
It was, actually. The machinists at Boeing 70 years ago were taught their craft. They didn't just figure it all out from scratch; some aspects of aeronautics were novel but shipbuilders were making propellers before William Boeing was even born.
> They built it then and it can definitely be built again.
I can't see why I should trust this line of reasoning. I baked a cake yesterday, so I should definitely be able to bake a cake today, right? But I ran out of flour and stores are closed.
Not to say that it can't be done, but in today's economy, with today's culture, it just isn't a sure thing.
> It was, actually. The machinists at Boeing 70 years ago were taught their craft. They didn't just figure it all out from scratch; some aspects of aeronautics were novel but shipbuilders were making propellers before William Boeing was even born.
This is absolutely incorrect. Most of the materials machining advancements to make light aircraft parts had to be done specifically for aircraft. Ship building is completely different and largely irrelevant.
> I can't see why I should trust this line of reasoning.
Because this wasn’t some long line of training from centuries of wizardry. Materials science was a joke 100 years ago. We can do what they did then to learn manufacturing but we can do it significantly faster because we have simulations and chemistry knowledge that wasn’t lost.
Aah the McDonald excuse again. The favorite pivot of every boing apologist and conspiracy theorist. If only Mac, a completely successful defense contractor, hadn't somehow engineered a completely galaxy brained backdoor purchase of their largest competitor Boeing like a tapewirm because they needed cash after the f112 cancellation they never would have lost that engineering led spirit.
Get over it. Boeing wasn't doing great and has always had struggles. They wanted to get further into defense and kill off a competitor.
Also Wharton came for everyone in the 90s and 00s. If Boeing stayed seperate from the evil Mac they still would have been inmundated by best practice short term bean counters from every MBA school in the country.
Also if you ask a machinist in Seattle or STL if Boeing outsources, they sure do, to those non-union untrained unqualified folks in the south. Nevermind all the moisture that gets into the plane when you wheel a 747 from an air-conditioned warehouse to the southeast sauna. Boeing has always fought with it's union so that wasn't the fault of the Boogeyman either.
I was there at the time, so was my mom; quite a few of my friends. The McDonnell merger was the death knell. I'm not saying that everything was rosy and without challenge, but moving corporate to Chicago triggered massive changes throughout the hierarchy. And those changes are now visible as rot and corruption.
take something metal, get it really cold, wheel it out into a steam room or a sauna where someone just poured a bucket of water on the rocks... tons of moisture is gong to condense on the metal, and in all the gaps and tracks inside
Because they weren't allowed to, what with their military single-source business and all that gov money keeping them alive. You betcha these MBA graduates would have shipped the entire farm to China if it promised a quarterly profit.
Pointing at Boeing for any broad business thesis is difficult given recent developments (i.e. failures) -- maybe excepting a shift to finance-driven culture away from engineering-driven culture.
Sorry, what? I think that examining Boeing, the way that it has adopted modern business practices, and the way that led to their catastrophic failure as an organization, is necessary for us to grow beyond this as a society. Even if it's difficult, it must be done.
It’s even more than that. Chinese manufacturing is sort of a growth vehicle like real estate. They’ve pumped up manufacturing capacity far more than is necessary to undercut international competitors. These firms are dying in large part because there’s too many of them.
> It's a bet that China's rivals cannot successfully resist short-term greed despite the huge and transparent long-term risks.
Seems they have correctly identified the western worlds weakness.
Isn't it the same with climate warming? In the long run it would have been cheaper to prevent climate warning in it's early stages. Yet, we delayed (and are delaying) necessary actions as long as possible. In the end, the loss caused by climate change will by far outweigh the cost if we'd have taken measures early.
If your strategy is dependent on the enemy continuing to make the same mistake year after year, then it's a bad strategy. The enemy always get a vote after all.
Now that said, assuming your enemy is competent can also lead to strategic miscalculation, such as Russia invading Ukraine when everybody but the US thought they would never be insane enough to do so. There's a difference between "what I would do if I were X" as opposed to "what would X really do?"
That said, it's safer to assume that the adversary is intelligent but that isn't a substitute for actually understanding your enemy. Or perhaps, they don't have to be your enemy.
> it's trivially countered by protectionist policies
This assumes your local manufacturing and supply chains aren't completely demolished, expertise hasn't died out and been replaced and you can just restart it "trivially" overnight by slapping an import tariff
If the capacity was for exports of ev’s, solar panels, batteries to U.S. and Europe, the 100% tariffs are going to bring some pain. somehow iPhones, leather bags are not getting tariffs.
The title of the article is a bit misleading. Manufacturers are going broke because there's too many of them, which is arguably a nice problem to have.
A lot of these were unsustainable to begin with, the number inflates the viability. The key players are expanding, and increasingly building out manufacturing in cheaper countries like Mexico, Vietnam, Thailand so they will become much more dominant.
It feels like The Economist and other Western oligarch media have been saying that China is going to collapse "next week" for decades. Almost like they have some sort of anti-reality agenda.
I regularly read The Economist and it is not a flawless outlet but it does not and has not attempted to perpetuate any sort of collapse narrative about China. Individual opinion pieces with negative outlooks based on current global market context? Perhaps, but an overarching narrative of collapse just doesn't exist.
The reality of China is that their GDP stats are so systematically faked and so clearly don't add up that nobody actually knows whether China is economically healthy, not even Xi Jinping.
In such a scenario, China could collapse at any time, and past performance is not a predictor of future results.
At a macro-level, Chinese federal statistics are decently trustworthy in the 2020s, and there is enough transnational trade and dealflow that egregious tampering can and would be caught, and is very damaging.
> China could collapse at any time
There is a difference between stagnant/slowing growth (which is what is happening) and "collapse" (nowhere near that level).
Nor would you want to wish a Chinese "collapse".
It's because of rhetoric like yours that other Chinese people automatically dismiss policymakers abroad who are trying to push for reforms for an economically stabler China - which itself requires healthy engagement with the world.
But who has the guts to call out the emperor has no clothes. No one corrected the covid mortality numbers or even gave any kind of estimate other than the officials numbers out of ccp.
If you look at the aggregate of The Economist's "reporting" on China, the GPs comment is correct.
One could even argue they are a Chinese asset because they mislead Western investors so fantastically and consistently on basic economic topics, a sort of Great Filter.
Any newspaper contains significantly more conjecture and guessing that the comment you reply to. It is ironic that the Economist was the magazine from which I learned speculating about behind the scenes actions and personal power politics.
Yet you do not call the Economist reporters conspiracy theorists.
The Economist is consistently wrong about ... economic predictions, which is what GP was making fun of.
