China's manufacturers are going broke

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.

Re: China's manufacturers are going broke

#6

Post by kibwen » Sat, Aug 17, 2024, 3:38 PM UTC

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.

Re: China's manufacturers are going broke

#7

Post by Johanx64 » Sat, Aug 17, 2024, 3:41 PM UTC

kibwen wrote: post #6

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'…

> 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

Re: China's manufacturers are going broke

#8

Post by oldpersonintx » Sat, Aug 17, 2024, 3:42 PM UTC

[dead]

Re: China's manufacturers are going broke

#9

Post by klyrs » Sat, Aug 17, 2024, 3:43 PM UTC

kibwen wrote: post #6

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'…

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.

Re: China's manufacturers are going broke

#10

Post by kwhitefoot » Sat, Aug 17, 2024, 3:43 PM UTC

> 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.