I live in China, and what I see is quite the opposite.
China's manufacturers are going broke
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Re: China's manufacturers are going broke
#12The 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 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.
Re: China's manufacturers are going broke
#13I live in China, and what I see is quite the opposite.
Go on
Re: China's manufacturers are going broke
#14The 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'…
Trade policymaking is anything but trivial.
Re: China's manufacturers are going broke
#15Well, 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.
Re: China's manufacturers are going broke
#16Paywall
Re: China's manufacturers are going broke
#17The 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
I worry that since protectionism is discretionary it’s highly prone to corruption which would prevent any real manufacturing revival.
Re: China's manufacturers are going broke
#18> 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
Re: China's manufacturers are going broke
#19It 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.
Re: China's manufacturers are going broke
#20The 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
Yeah, that policy wasn't enacted yesterday. It's already much futher along.