251–260 of 598 posts
Makes sense to move manufacturing capabilities there, they are a step ahead. Perhaps it will result in vulnerabilities being closed.
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They are well on their way of climbing onto the next rung of the manufacturing ladder and manufacturing more complex items with higher margins that can absorb higher wages …and transitioning more to a service economy …no?
Nope. By most standards the PRC is stuck in the middle income trap. To paraphrase an earlier comment I wrote sometime back: Chinese household median income is around $4,700-4,800 in 2021, with massive disparities between First world comparable regions such as Beijing, Shanghai, and Tianjin, and rust belt regions like Wuhan [0]. Even the Chinese Premier Li Keqiang has noted that 600 million Chinese earn less that $140…
China is not a good example for the middle income trap. Middle income trap countries relied on cheap labors but could not move up in the value chain.
China has moved up the value chain. They're the top or close to the top for many things including mobile phones, chip manufacturing (7nm), AI, software, 5G, electric car batteries, nuclear power, fusion research, quantum computers, etc. They also publish more scientific papers than any other country, by a significant amount.
Conversely, true middle-income country like Brazil and Thailand have not moved up in the value chain one bit.
China, Singapore, Hong Kong, South Korea, and Japan are all East Asian countries. They all have very similar values when it comes to education, hard work, and entrepreneurism. It's only a matter of time until China joins the first world. Their major cities are already first-world.
Yes, there are countries that have cheaper labor than China right now but China should be able to replace that with higher value services such as exporting 5G tech or nuclear power plants.
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No it isn't. People with nothing to lose and living in poverty while seeing their democratic neighbors prospering are harder to control. People with education, jobs, and families - something to lose - are easier to control. How many Tienanmen Squares has China had since Asian and Western democracies opened their markets and enriched China.
This is literally ahistorical. The overwhelming majority of consequential protests/rebellions/revolutions were heavily endorsed by the literati class. Why do you think freedom of speech and expanding education are classically liberal claims? You can see it right now in Putin's Russia. Opposition to the regime, to the extent that it exists, does not come from the proles.
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China was literally able to lift hundreds of millions of people out of poverty with all the manufacturing that was moved there. I think most people don't understand anything about economics. Vietnam absolutely wants and will benefit from an increasingly industrialized economy. edit: I'm seeing a number of comments pointing out how these are companies owned by Koreans. Which maybe isn't optimal, but the potential for…
Manufacturing for export with Western companies was central to China's rise - same goes for Korea, Japan, and Taiwan - but there was more to it than comparative advantage/labor arbitrage. There was a lot of heavy-handed government action: land reform dispossessing wealthy families, aggressive/protectionist state financing, etc.
A lot of comments here are criticizing Apple for chasing cheap labor. Ignoring for a second the fact that this has a lot more to do with geopolitics and hedging geopolitical risk, I think it's important to think more carefully about the impact of companies investing in developing economies. By and large, the factory work done by people in developing economies is dramatically better in terms of quality of life and saf…
I think many of us would be more supportive of outsourcing manufacturing to developing countries if their government aligned more with Western ideals. The fact is many countries, like Vietnam, are still "developing" because they have authoritarian governments that have been oppressing their population to some extent keeping their labor cheap while stunting their economic potential. We see the problems with this situa…
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The China duality: It seems that China is a capitalist country when people want to discuss their achievements, and a communist country when they want to discuss their faults.
A ton of the achievement has to do with Western investments. For example, Apple spent $275 billion in the late 2010s to build up Chinese tech manufacturing capabilities. That's one company doing a 5X larger investment than the "historic" CHIPs bill signed by Biden this year.
To be fair, a fairly big reason why China became poor was because of western imperialism. Look up "Century of humiliation".
And if you go back in history far enough, China was the most advanced country and had the highest GDP in the world for long periods of time.
But I think you're not open to these ideas.
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I think it is more likely that TSMC is diversifying away from building only in Taiwan. They have the expertise. Apple's expertise is engineering, design, and marketing. They don't own their own factories because that is not their expertise, and they probably don't want to bring that in house.
Designing their own chips in-house wasn't "their expertise" either, a few years ago. You won't expand into other areas unless you at least make it a priority and try.
That being said; the other commenter is right. If Apple had to release the M1 on 10nm or even 7nm, they would end up sacrificing at least >200% performance-per-watt; a death blow to either the battery life or performance. Apple's move to dominate the 5nm supply was another demonstration of their manipulation of supply chains akin to their iPod hard drives. There are indeed interesting parts of Apple Silicon, but the performance is driven wholly by their exclusive 5nm ARM cores.
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But now we can't build anything and if china embargoes us, we're doomed.
> But now we can't build anything and if china embargoes us, we're doomed. Firstly there is vastly more manufacturing in the US, Canada, and Mexico than you appear to realize. Secondly China is far more prone to being embargoed than the United States. If China cut us off then the price of certain goods would increase significantly and there’d be shortages of some goods and industrial inputs but we could feed ourselve…
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Capitalism is one of the biggest eradicators of poverty. 1B of people in China was lifted from poverty because of it. And once it's done with one poor country, it starts taking care of the others :)
Did it eradicated poverty in Burundi? South Sudan? Malawi? Pakistan? I can cherry pick examples too; means nothing, and what about the tankman? Was he lifted out of poverty? Or all the other victims of the goverment? Also China capitalism includes things like stealing tech secrets from the companies that manufacture there[0], is that part of the "ideal capitalism" you advocate for? [0] https://money.cnn.com/2017/08/1…
Sure, China has copied/stole tech from the West, just as the West has copied tech from China long ago. It happens when an economy is playing catchup.
But in my humble opinion, the idea that China could only steal western tech is rooted in racism and a lot of western media propaganda.
Ever had a Chinese co-worker? Did they seem dumber than you? Are they only good at the job because they're copying you or stealing your work?
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I can't agree with this at all. We have plenty of modern examples that show this to not be the case: West Germany versus East Germany, South Korea versus North Korea, Taiwan versus China. In all these examples less oppressions results in a stronger economy and a higher standard of living for citizens.
West Germany was marshal planned by US at height of economic primacy and was previously developed which made recovery to prior levels possible. SK and TW were both bloody authoritarian govs sponsored by US (for coldwar containment) who had industrial policies, again supported by US at height of economic primacy. As far as I'm aware, there are zero countries that has ever successfully developed without initial phase o…