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China Once Looked Tough on Trade. Now Its Options Are Dwindling

nytimes.com

151–160 of 385 posts

Re: China Once Looked Tough on Trade. Now Its Options Are Dwindling

#151

Extremely one sided comments, with a US centric view. The world is not the US, and HN readers are not only US citizens, so let me express a different point of view. Assumption: Trump wants fair trade. HN readers want fair trade. What is needed: fair trading rules, fair IP rules, fair capital structures, and a fair currency. Tackling some of the unfair trade practices does not address all those issues. In particular i…

>Assumption: Trump wants fair trade

Where are you getting that from? Trump wants to keep his promise to working class workers that he'll bring their manufacturing jobs back from China.

Re: China Once Looked Tough on Trade. Now Its Options Are Dwindling

#152

China should just levy heavy duties on goods from states Trump won big, and the states where Republicans are in peril; while at the same time offering concessions to goods from states where Trump lost and Democrats are doing well. Then it should start an advertising blitz to highlight how workers/farmers in the former states are suffering.

Advertising would be considered influencing elections, like Russia is claimed to have done. Trying to split the American people that openly would almost certainly backfire and push undecided voters to Trump. China is already, in some ways, doing some targeting specific voters like the soy bean tariffs. What are you proposing to get the middle class growing again?

Re: China Once Looked Tough on Trade. Now Its Options Are Dwindling

#153
post #109

Earlier quoted context omitted.

The manufacturing ecosystem in Shenzhen (for example) is unique. Any individual element of it is probably replaceable (at a considerable cost), but the presence of all those elements in the same place is not. The agglomeration benefits of this are HUGE, and losing them would introduce a thousand small frictions into the manufacturing process. Issues that can be sorted out in hours or days in Shenzhen (finding alterna…

This is a commonly espoused narrative. I’m sure there were synergies in steel and auto production in US cities connected by rail between Pennsylvania and Michigan. I’d say the key misunderstanding is that you’re conflating China with “markets” in “it took China roughly two decades to build this kind of ecosystem.” If you read it as, “Markets took two decades to build this kind of ecosystem,” it should be clear that t…

Sure, there's nothing mystical about Shenzhen, and I'm sure it can be replicated elsewhere -- but on a decadal timeframe at best.

There are many different factors which go into producing such an ecosystem. Raw number of STEM graduates is a very crude proxy, but it's probably as good as anything else for representing the "feedstock" of such an ecosystem, and gives an rough indication of how difficult the task might be.

China produces ~8x as many STEM graduates as the US. Therefore, all else being equal, if it took China 20 years to develop such an ecosystem, it should take the US roughly 160 years to do the same.

"But wait!", you say, "The US can be a fast second-mover, learning from Shenzhen and not repeating its mistakes. Plus, we may have fewer STEM graduates, but on average they're better-educated and more entrepreneurial, which would allow us to move even faster". (Note, I'm not endorsing these claims, just saying that it's an argument one could plausibly make).

Fine, granting all that, let's say that each American STEM graduate is worth 10 Chinese STEM graduates. In that case, it would only take 16 years to begin to compete with Shenzhen.

That analysis is almost certainly far too generous towards the US, however -- and even if it were well-founded, what American politician would pursue the necessary policies, given a best-case 16-year ROI? And what American polity would accede to the requirements of such policies?

Answer: none. This just isn't going to happen in the US. India has the scale to pull it off, but not the organisational capacity; Germany has the organisational capacity but not the scale; most other places have neither. Anybody who thinks that it'd be easy to replace China is utterly fooling themselves.

Re: China Once Looked Tough on Trade. Now Its Options Are Dwindling

#154

This actually looks like the start of the disentanglement between the US economy and the Chinese economy. What will likely happens next (my best guess) is 1.) 40-60 percent of a company’s supply chain moves out of China 2.) China restricting the movement of capital/equipments out of China (similar to what happened with Korean companies last year) 3.) China growing homebrew competitors to the foreign companies leaving…

It's interesting because you can replace "China" with "The United States" and most of those bullet points are still true.

The US doesn't implement capital controls so this replacement fails at step 2.

Re: China Once Looked Tough on Trade. Now Its Options Are Dwindling

#155
post #143
post #120

Earlier quoted context omitted.

Every president has declared the ICJ irrelevant. The Pentagon would send tanks to the White House if a President so much as hinted at accepting ICJ jurisdiction. And in any event, the U.S. doesn't dispute the usefulness of the ICJ or its jurisdiction over other countries, it just disputes the usefulness of the U.S. being subject to ICJ jurisdiction. By contrast, the WTO deeply matters to the wealth and security of th…

> Every president has declared the ICJ irrelevant. The Pentagon would send tanks to the White House if a President so much as hinted at accepting ICJ jurisdiction. Are you seriously claiming there would be a military coup in the US over something like that? The US has very strong taboos against military intervention in politics, much stronger than exist in many other countries. That you would make such a claim calls…

From the US point of view, accepting the ICJ is giving up soverigty to its old colonial masters, and wartime enemies.

It is not a palatable position.

Re: China Once Looked Tough on Trade. Now Its Options Are Dwindling

#156
post #39

Earlier quoted context omitted.

Saudi Oil is a commodity, but many country’s don’t have oil. Every country has low skilled workers.

Low skilled workers doesn’t accurately describe what China brings to the table currently. They effectively are the only place in the world you can source certain parts of the electronic supply chain at the volume currently necessary. They’ve been up the technical ladder for decades at the same time as other places have shed that capability. It would take a long time for Vietnam to come online. I’d guess Korea or Japa…

China does a lot of different thinks all the way up to building jet engines. However, the percentage of people employed at mod to high skill manufacturing is not enough to keep things going in the event of a trade war.

Re: China Once Looked Tough on Trade. Now Its Options Are Dwindling

#157

Earlier quoted context omitted.

There are some real grievances where China is not playing fair - forced partnerships, cheap loans for state-backed companies, etc. Lots of empty promises each year with no change to the rules and approaches. So while I think trump is insane and his policies are mostly harmful to both his country and the remainder of the world, pointing out the false pretences and pretend-market-economy of China is definitely not the…

Believe me, Trump doesn't want "Fair trade" when your slogan is "Make America Great Again". Corporate America's welfare is around 100 billion as said by many rather partisan think tanks... but in reality, its trillions of dollars when you figure in realized costs such as below poverty level minimum wages, the collapse of pension and retirement programs, the exploding costs of for-profit healthcare.

> but in reality, its trillions of dollars when you figure in realized costs such as below poverty level minimum wages

Trillions of dollars? You're inventing that claim.

Less than 1% of the US population earns the minimum wage for starters.

There isn't a single developed nation that doesn't massively subsidize its poorest workers via a welfare state. Every country with universal healthcare does for example, without exception.

> the exploding costs of for-profit healthcare.

Private corporations are heavily footing the bill for that healthcare cost increase, as roughly half of the US healthcare system is employer coverage. Which is why companies as diverse as Amazon, JP Morgan and Berkshire Hathaway are desperate to work together to reduce the problem.

> the collapse of pension and retirement programs

Which is occurring in just about every major economy at the moment, thanks to rapidly aging demographics. China has a very bad pension problem for example, and that's on pensions that typically only pay about $100 per month. Simultaneously their economy is already seeing a decline in workers (which means less workers to pay into propping up the eroding pension context).

https://www.bloomberg.com/news/articles/2018-02-05/china-s-n...

Re: China Once Looked Tough on Trade. Now Its Options Are Dwindling

#158

Earlier quoted context omitted.

There are some real grievances where China is not playing fair - forced partnerships, cheap loans for state-backed companies, etc. Lots of empty promises each year with no change to the rules and approaches. So while I think trump is insane and his policies are mostly harmful to both his country and the remainder of the world, pointing out the false pretences and pretend-market-economy of China is definitely not the…

Believe me, Trump doesn't want "Fair trade" when your slogan is "Make America Great Again". Corporate America's welfare is around 100 billion as said by many rather partisan think tanks... but in reality, its trillions of dollars when you figure in realized costs such as below poverty level minimum wages, the collapse of pension and retirement programs, the exploding costs of for-profit healthcare.

> Believe me, Trump doesn't want "Fair trade" when your slogan is "Make America Great Again".

He does if you believe that the current trade is unfairly balanced against the US.

>Corporate America's welfare

Nothing to do with trade policies, but w/e.

>the collapse of pension and retirement programs

That's not welfare.

>the exploding costs of for-profit healthcare.

Also not welfare, especially when many corporations have to pay these costs for their employees.

Re: China Once Looked Tough on Trade. Now Its Options Are Dwindling

#159

Extremely one sided comments, with a US centric view. The world is not the US, and HN readers are not only US citizens, so let me express a different point of view. Assumption: Trump wants fair trade. HN readers want fair trade. What is needed: fair trading rules, fair IP rules, fair capital structures, and a fair currency. Tackling some of the unfair trade practices does not address all those issues. In particular i…

Of course US citizens want a president that looks out for US interests. To think otherwise is laughable and naive. I want the president to fight for us!

Imposing taxes on US consumers is looking out for US interests? That's a strange way of looking at it...

Re: China Once Looked Tough on Trade. Now Its Options Are Dwindling

#160
post #142

Earlier quoted context omitted.

> Protecting elections may mean ending winner take all electoral college system. I think 2016 proved that the electoral college is not supplying the adult oversight that the founders intended.

The electoral college and winner-take-all are mutually exclusive ideas. Presently, the electoral college benefits rural voters (Wyoming and the like) by increasing vote value. Winner-take-all elections benefit urban voters by disenfranchising rural voters (every non-Democrat county in California).

This is a poorly drawn equivalence as the winner take all system doesn’t imbalance vote value like the electoral college does. IE you’re just saying winner takes all disenfranchises people who don’t vote for the winner which is a tautology.
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