China's manufacturers are going broke • Hacker News Board

Re: China's manufacturers are going broke

#21

Post by manuel_w » Sat, Aug 17, 2024, 3:51 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 a bet that China's rivals cannot successfully resist short-term greed despite the huge and transparent long-term risks.

Seems they have correctly identified the western worlds weakness.

Isn't it the same with climate warming? In the long run it would have been cheaper to prevent climate warning in it's early stages. Yet, we delayed (and are delaying) necessary actions as long as possible. In the end, the loss caused by climate change will by far outweigh the cost if we'd have taken measures early.

Re: China's manufacturers are going broke

#22

Post by pstrateman » Sat, Aug 17, 2024, 3:53 PM UTC

kwhitefoot wrote: post #10

> 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.

The panels themselves have been an insignificant parr of the total cost for a while.

Mounts, connectors, wires, and inverters end up costing much more than the panels.

Re: China's manufacturers are going broke

#23

Post by laksdh » Sat, Aug 17, 2024, 3:53 PM UTC

djfobbz wrote: post #11

I live in China, and what I see is quite the opposite.

[flagged]

Re: China's manufacturers are going broke

#24

Post by kortilla » Sat, Aug 17, 2024, 3:54 PM UTC

klyrs wrote: post #9

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.

Not a good example because Boeing didn’t outsource. China flies Boeing airframes made in the US and has for the last 50 years.

Boeing is an example of financiers running the company from an ivory tower on the other side of the country.

Re: China's manufacturers are going broke

#25

Post by jncfhnb » Sat, Aug 17, 2024, 3:58 PM UTC

okasaki wrote: post #19

It 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.

I can’t find that claim in the article.

Re: China's manufacturers are going broke

#26

Post by alephnerd » Sat, Aug 17, 2024, 4:00 PM UTC

derefr wrote: post #15

lenerdenator wrote: post #5

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.

China was actually trying to heavily establish offshoring in the Philippines—but that has seemingly dried up with the increasing South China Sea tensions.

Same with India before 2020 - China used to be India's largest FDI partner before the Galwan crisis.

After that, the Indian government "persuaded" Chinese players to sell off their Indian assets to Indian, Taiwanese, Korean, Japanese, and American players instead.

4 years later, the GlobalTimes - which was extremely provocative against India - has started pushing out content arguing that India should begin reopening it's economy to Chinese players.

Re: China's manufacturers are going broke

#27

Post by philipov » Sat, Aug 17, 2024, 4:04 PM UTC

lenerdenator wrote: post #5

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.

Those places are Vietnam and Africa, and it's already happening.

Re: China's manufacturers are going broke

#28

Post by User23 » Sat, Aug 17, 2024, 4:05 PM UTC

Excess slack in productive capacity can be taken up not only with exports, but also with domestic demand side stimulus. The Chinese market is huge and can almost certainly generate demand for this productive capacity with proper fiscal policy.

Re: China's manufacturers are going broke

#29

Post by User23 » Sat, Aug 17, 2024, 4:06 PM UTC

cjbgkagh wrote: post #17

Johanx64 wrote: post #7

Earlier quoted context omitted.

> 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.

Outsourcing is also discretionary and highly prone to corruption.

Re: China's manufacturers are going broke

#30

Post by kiba » Sat, Aug 17, 2024, 4:07 PM UTC

manuel_w wrote: post #21

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 a bet that China's rivals cannot successfully resist short-term greed despite the huge and transparent long-term risks. Seems they have correctly identified the western worlds weakness. Isn't it the same with climate warming? In the long run it would have been cheaper to prevent climate warning in it's early stages. Yet, we delayed (and are delaying) necessary actions as long as possible. In the end, the loss…

If your strategy is dependent on the enemy continuing to make the same mistake year after year, then it's a bad strategy. The enemy always get a vote after all.

Now that said, assuming your enemy is competent can also lead to strategic miscalculation, such as Russia invading Ukraine when everybody but the US thought they would never be insane enough to do so. There's a difference between "what I would do if I were X" as opposed to "what would X really do?"

That said, it's safer to assume that the adversary is intelligent but that isn't a substitute for actually understanding your enemy. Or perhaps, they don't have to be your enemy.