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Why is China smashing its tech industry?

noahpinion.substack.com

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Re: Why is China smashing its tech industry?

#391

Post by rrrrrrrrrrrryan »

HWR_14 wrote: post #338
hintymad wrote: post #322

Earlier quoted context omitted.

I think you're spot on, and the author's assessment is accurate: "China may simply see things differently. It’s possible that the Chinese government has decided that the profits of companies like Alibaba and Tencent come more from rents than from actual value added" In the perspective of Chinese government, it is simply unacceptable that a toilet ordered by the air force cost more than $20k, or the number of ship man…

> it is simply unacceptable that a toilet ordered by the air force cost more than $20k Why do people get hung up on this? Specialty parts cost a lot.

Yes - the cost is mostly testing and building an audit trail.

If every single part of the toilet has to be manufactured from raw materials, and fully tested and documented at each step of the manufacturing process, then a toilet can add up to $20k easily.

Also, anything that will be installed in a regular old non-military passenger plane is extremely expensive, because they must be able to prove that parts will not break off mid-flight, that it will not catch fire, and will be manufactured consistently and reliably.

Re: Why is China smashing its tech industry?

#392

Post by triceratops »

billytetrud wrote: post #383
triceratops wrote: post #79

Earlier quoted context omitted.

Not always. Tobacco generated enormous profits even when there was no regulatory heat on it.

You're correct, usually is not always. But also, that's not what I meant. I meant that when companies can make profits without creating more value to society than the profits they make, its generally because of regulatory capture that allows them to extract rents from their customers or push costs onto the people as externalities. Regulatory capture is where companies "capture" the regulatory framework and use it to…

I understood what you meant by "regulatory capture". I was implying that capture often happens when there's regulatory heat.

Re: Why is China smashing its tech industry?

#393

Post by jpetso »

cousin_it wrote: post #362
jjoonathan wrote: post #320

Earlier quoted context omitted.

Sure. Hyperbolic example: a starving orphan and a king are both looking for dinner. The orphan has no money -- therefore, the economic value of feeding the orphan is zero. The king, of course, is loaded, and pays an enormous premium for tiny asymptotic improvements in perceived quality because he can. The market value of chasing those asymptotic improvements is enormous. Would you say that the value of feeding the or…

I think you're pointing to the wrong problem. In economies where "stocks go up", food and many other goods tend to be very cheap (when measured in hours of unskilled labor). The problem comes from two specific goods, housing and healthcare, which for some reason don't become cheap. We need a correct tested theory of why that difference happens, that's the only way toward solving the problem.

The difference is lack of competition.

In housing, that's zoning for single-family houses which limits affordability and provides exclusivity vs. apartments or boarding houses, except in downtown cores which aren't enough supply to really move the needle (and expensive for other reasons).

In US healthcare, it appears there is regulatory capture from insurance companies and private health care providers, both successfully ganging up on the government to minimize real competition or strict price regulation.

Without real competition for a product that consumers can't feasibly opt out of, no heavyweight market participant interested in driving the price down, that's what you get. But yeah, testing is good too. Get the government to try out 10 years of broadly available at-cost housing competition and public healthcare, then evaluate :-P

Re: Why is China smashing its tech industry?

#394

Post by jpetso »

epivosism wrote: post #133
kmeisthax wrote: post #107

Earlier quoted context omitted.

I don't think there is such a name. But you're on the right track about it being difficult to distinguish between value and rent-seeking. One thing to note is that governments themselves are, by definition, rent-seekers. This is inherent to how a government - a monopoly on the legitimate use of violence within an area - works. Once you are sovereign within a territory you can extract rents in the form of taxes, and i…

Excluding the direct political arguments, is there hope for a clean way to distinguish these types of activities: * Someone who literally figures out a new, cheap way to make a drug which cures a real disease * Someone who, as soon as they get the right to, imposes license fees which serve no valid purpose, and profits in status & wealth from these new duties.

Rent-seeking is when profits massively outstrip investment. Perhaps infeasible in practice, but if government protection of licenses (patents, even copyright) could be capped at a maximum that's proportional to money & time invested, rent-seeking could become less of a problem.

As in, allow entities to make a handsome profit, far outstripping their original investment. Just don't allow them to profit off of it forever. Patent and copyright expirations are a proxy for this, but they don't take into account the actual money & time invested, instead they replace them with a hard-coded magic number which will work for some products and fail for others.

Re: Why is China smashing its tech industry?

#395

Post by trasz »

andy_ppp wrote: post #386
trasz wrote: post #371

Earlier quoted context omitted.

It doesn’t really matter whether the US planned to kill slightly fewer people. Everything that ensued was their fault; it wouldn’t happen without US invasion. Also, note that those numbers are only the direct victims. How many people died because of US sanctions? As for Uyghurs - I’m sure there were a lot of horrible crimes there. It’s unavoidable when doing things at that scale, in a country which still has a long w…

What proportion of those actually committing the murders, insurgency, civil war and Islamic jihad should those pointing the gun take? I think it makes all of this far simpler if you just say it’s all America’s fault but it’s clearly more complicated than you’re suggesting. You must not understand that Iraq was like North Korea before the war, I suggest you read Christopher Hitchens on this as he puts how dark and evi…

Iraq was not at all like North Korea, but let’s for a moment assume it was. Let’s say the US attacked NK and it resulted in a million deaths. Would you claim it’s not US fault, because while they started the killing, some of the dead were killed by the defenders?

As for “both ways” - there is a fundamental difference between government sending people with an explicit mission of killing people - which is what US did in Iraq - and the government sending people to doing something else entirely, yet ending with some of the victims dead.

Let’s assume your numbers are right, and the number of incarcerated Uyghurs really is as high as the number of incarcerated Americans: is that genocide, in both cases? Would you say it would be better for those people to get killed instead?

Re: Why is China smashing its tech industry?

#396

Post by ppeetteerr »

japhib wrote: post #71
ppeetteerr wrote: post #63

China's investment into hard-tech (semiconductors, etc) doesn't not mean it can't also allow for the growth of consumer tech. For instance, we subsidize farming to keep it state-side but we don't prevent food processing companies from growing and consolidating. Maybe the point here is that the government in china wants to always be between the consumer and the service, which makes a lot more sense. Maybe Alibaba and…

> doesn't not mean it can't also allow for the growth of consumer tech I can't understand this sentence haha ... Too many "nots" > I don't necessarily agree with the conclusion of the author: that to grow their hard-tech industry, they have to punish consumer tech. I don't think the author is trying to argue that this strategy is true -- I think they're just trying to explain China's behavior.

Not my finest post, I agree

Re: Why is China smashing its tech industry?

#397

Post by MockObject »

sudosysgen wrote: post #315
adventured wrote: post #309

Earlier quoted context omitted.

Throughout all of recorded history there has yet to be a superpower or empire that didn't do incredibly stupid things, courtesy of over-estimating its position and power. Modern China will not be an exception. They'll overreach repeatedly just as every other prior great power has. China considers Australia to be within its primary sphere of influence (a rapidly expanding sphere as far as China is concerned, as they p…

China has literally zero expeditionary abilities. 95% of their military is based on area denial, the remaining 5% on taking Taiwan, which they can barely do as of today. There is zero evidence that China is developing the capability of invading anyone except Taiwan for the next 25 years, and heaps of evidence to the contrary. There is stupid and then there is literally physically impossible. As far as Britain invadin…

The way to invade Australia is by capturing control of its government through influence operations, not by sending troops and firing shots.

Re: Why is China smashing its tech industry?

#398

Post by _nalply »

HWR_14 wrote: post #385
_nalply wrote: post #367

Earlier quoted context omitted.

You know some people got a blank check and went on a rampage. And if asked they invent justifications and requirements and generally fire smoke grenades to confuse the public.

Defense audits of how you spend the money are no joke. I guarantee that all the justifications were thought of ahead of time and used to justify the exact amount they requested.

Audits are a way to earn money. Don't forget to charge by time and effort then charge for time spent for being audited.

Additionally as always with complex regulations and specifications there are ways to comply maliciously. This means comply by letter but charge for bullshit.

Another bonus are hurdles to enter the market for your competitors. If they don't know how to talk with government and comply they can't sell to government. This makes things expensive for government.

Re: Why is China smashing its tech industry?

#399

Post by Animats »

inglor_cz wrote: post #359
Animats wrote: post #150

China is not "smashing its tech industry". It's cracking down on private Internet companies that acquired too much power through network effects. This is completely consistent with CCP doctrine. Anything that central has to be state-owned. Xi declared this year that while digitization is important, “we must recognize the fundamental importance of the real economy… and never deindustrialize.” Right. China, remember, h…

The five year plan is interesting, because I was born in a country that worshipped its five year plans ("pětiletky"). It was the Czechoslovak Socialist Republic. Now the thing about five year plans was that they worked rather well at the beginning , so approximately until 1960. Back then, the economic power of a country was measured by its heavy industry, and in a post-WWII world where there was war damage to be fixe…

But I can see a similar "it-must-stay-the-same-itis" in their proclamations that the country must never deindustrialize.

There's some of that. There's an official push in China towards self-sufficiency, and eliminating reliance on imports. The US used to have such a policy during the Cold War.

The coal and steel fixation created the European Union, which was originally "the European Coal and Steel Community". Britain grew to be a world power through coal and steel. As those declined in importance, they were taken over by the Government, under what was derisively called "lemon socialism". There was British Steel, British Coal, British Rail... All the old labor-intensive plants.

China has problems with inefficient state-owned businesses, which tend to be jobs programs. They're mostly owned by provincial and municipal governments, not the national government. Lots of steel mills and coal mines, inevitably. But since they make steel for export, they can't be too inefficient.

Re: Why is China smashing its tech industry?

#400

Post by beaunative »

ghomrassen wrote: post #325
thujlife wrote: post #312

Earlier quoted context omitted.

anti monopoly?

Didi doesn't have a monopoly in China. Meituan is also a large player in the space along with hundreds of tiny ones.

Meituan has only just entered the market. Where did you get your information from?
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