China is the manufacturing superpower • Hacker News Board

Re: China is the manufacturing superpower

#271

Post by wakawaka28 » Sun, Jan 05, 2025, 7:25 AM UTC

opo wrote: post #270

wakawaka28 wrote: post #265

Earlier quoted context omitted.

>No, this was not what the manufacturers wanted. States set up franchise laws to prevent car makers from directly selling their cars and they generally are not viewed as benefiting the producer or consumer It might be like that, or it might not. Maybe the car manufacturers take a public view that's different from their private view. Why would a state demand extra hurdles that cost its residents more money? Could it h…

>...Maybe the car manufacturers take a public view that's different from their private view. Maybe without the government forcing the manufacturers to go through 3rd party dealerships, they would still use them, but how about removing the laws and see? >... Why would a state demand extra hurdles that cost its residents more money? As the wikipedia article points out, this is really a textbook case of rent seeking. Th…

>Maybe without the government forcing the manufacturers to go through 3rd party dealerships, they would still use them, but how about removing the laws and see?

I actually read a pretty good reason not to remove these laws a while ago (and it is tangential to the argument about pricing that I made a while ago): It is impossible for independent resellers to compete with the manufacturer. This actually happened with Teslas: when Tesla dramatically lowered its prices to get more money, it effectively destroyed the used market and took money out of the pockets of anyone else who had used (or even basically new) inventory.

This kind of thing happens with other products too. For example, you usually can't buy a book from a publisher for less than the list price, because they don't want to undercut their distributors who are incurring significant costs to stock the books for them. (I think Amazon also requires companies that sell on Amazon to not undercut them by selling for cheaper elsewhere, despite the fact that their fees are high in some cases and they can even sell stuff for a loss.) I think the equivalent courtesy for car dealers would be that the manufacturer would be forced to pick a price and stick to it, at least at the wholesale level. That way, any independent dealer who does buy inventory can be assured that they won't face huge losses if the prices are cut upstream.

Finally I guess there is the question: do we really need the independent dealers, if the risk is all about the manufacturer cutting prices? We do, because these dealers make the market more efficient. That competition means you can shop for the best price or time window when buying or selling, without using Craigslist or classified ads. Dramatic decreases in price also affect owners and finance companies (in case of default). If the manufacturer can just decide "Hey we need to pump out a Porsche for everyone in the world" then they won't be worth what the original buyers paid, and they might walk away from the loan to buy a new one for half the price.

Re: China is the manufacturing superpower

#272

Post by DiogenesKynikos » Sun, Jan 05, 2025, 10:06 AM UTC

wakawaka28 wrote: post #103

typ wrote: post #71

Earlier quoted context omitted.

It depends. We can say that China’s industrial policies are a kind of protectionism as well in that they are willing to pay for extra cost for domestic “national red supply chain independence” rather than relying on the “comparatively advantageous” western vendors. And they did get excellent results. Note that industrial independence is exactly the opposite of free trade and that has been a long sought national goal…

China has a high amount of protectionism. You can't sell in China without approval, and no foreign-controlled business is granted access. You have to set up a minimum 51% Chinese-owned subsidiary and possibly jump through other hoops to get access. This along with all the outsourcing has been used to steal IP and put foreign competitors out of business.

Many of the claims you're making here are outdated, or just outright false.

For example, the 51% requirement does not apply in most industries any more. It was a transitional measure as China opened up its economy to foreign investment, to prevent foreign companies from instantly taking over or outcompeting every Chinese company. But that measure has been rolled back over the years, and now only applies in particular industries. Tesla 100% owns its operations in China, as do more and more foreign companies.

Many people in the US and Europe are operating with a mental picture of China that is decades out of date, or which is even just wrong.

Re: China is the manufacturing superpower

#273

Post by DiogenesKynikos » Sun, Jan 05, 2025, 10:14 AM UTC

chii wrote: post #109

ipnon wrote: post #14

Earlier quoted context omitted.

You might be surprised to learn that manufacturing is larger industry in the US than our tech industry, or that our domestic oil industry is even larger. America produces more oil than any other country. America was the world's factory for over a century. This dominance only ended around 2010, when China took the lead. It was our advantage to lose, and it was the result of deliberate political action. We offshored ma…

> All the while Beijing did everything in its power to enrich the Chinese worker i am not sure that the CCP is doing anything to enrich the average worker, and in fact, is probably doing the very opposite - making sure the chinese currency is constantly and artificially debased to make export more competitive. This results in lower wages for the workers. It is why there's low demand for goods/services in china. The m…

The average income in China has doubled over the last decade.

Much of China's exports comes from private companies, so no, the government does not keep the money. Even state-owned enterprises have their own balance sheets and don't just transfer everything to the government.

And finally, China's currency has actually been overvalued at various points. The central bank has intervened in both directions, not just to suppress the value of the currency.

Re: China is the manufacturing superpower

#274

Post by bobthepanda » Sun, Jan 05, 2025, 10:15 AM UTC

mahirsaid wrote: post #233

bilbo0s wrote: post #153

Earlier quoted context omitted.

The problem in China's case, is that there's a lot of evidence that China doesn't even care whether or not it's paid back. One, the loans were given often in dollars. Which China found itself with a surplus of the past few decades. With no convenient way of ridding themselves of those dollars without significant pain, Chinese strategists hit on the brilliant plan of "loans". Two, and more importantly, the loans were…

This would have been my response to the this ^ reply. They have capital to spare and also, what they're gaining from these countries in return more than justifies there loss in capital. the gain exclusive rights to ports and military presence. recently they made a an effort to include African countries as their allies. Concluding that they will allow African countries to retain control over there capital wand profits…

It’s worth noting that while some of the dud Chinese loans are for resources and whatever there are also plenty of nonperforming loans for projects that couldn’t possibly be useful to China, like the Montenegrin highway to nowhere: https://www.rferl.org/a/montenegro-billion-dollar-chinese-hi...

One other interesting note is that the way the financing is structured, the loans are not coming from the Chinese state but state owned banks, which seems like a mostly pedantic distinction, except the state owned banks also do much of the normal lending activity within China itself. Those banks now face the double whammy of dud property loans domestically and these dud loans to other countries, which is not helping the Chinese economic slowdown.

Re: China is the manufacturing superpower

#275

Post by Jensson » Sun, Jan 05, 2025, 10:31 AM UTC

greggyb wrote: post #185

maxglute wrote: post #67

Earlier quoted context omitted.

I think it's just the simplest (also default*) way of measuring, which doesn't mean it most correct or accurate. If PRC makes 5 cars @10k for every 1 US car @50k , and each PRC car is 80% as good, which metric do you use to measure gross manufacturing. Most people would say the guy that makes 5 cars. They might say the guy that makes 1 car if the 5 car guy's cars were 10% as good. What if its 3 cars that is just as g…

The price (that consumers are willing to pay) is the only decent proxy for quality we have. Quality, of course, includes consumers’ preferences. If the one car sells at a market price of 1/5 of another, then the only reasonable conclusion is that, as judged by consumers, one car is worth 5x as much as the other, and therefore is 5x better. That’s what market prices are: the collective valuation of goods/services and…

If that was true USA would export its industry produces, but the rest of the world mostly don't want what USA makes, meaning it isn't actually worth that much.

Re: China is the manufacturing superpower

#276

Post by ReptileMan » Sun, Jan 05, 2025, 11:36 AM UTC

whimsicalism wrote: post #200

wakawaka28 wrote: post #26

Earlier quoted context omitted.

The only way to protect wages in the face of competition that works for 1/10 to 1/3 the rate is to institute protectionist policies. That has also been unpopular because there's money to be made in offshoring as well. Americans are getting the worst at both ends, and only experiencing short-term benefits of having cheaper goods.

What the heck? When did this sort of economically irresponsible thinking become so mainstream? The benefits of protectionism are what are short-term, but they leave both us and China materially poorer in the long term. Life today is better than it was in the 1950s — and a large part of that is knowing our comparative advantage and leaning into it, not trying to restore long-dead industries by political fiat and throw…

>The benefits of protectionism are what are short-term, but they leave both us and China materially poorer in the long term

The horror of one's main geopolitical rival being poor and technologically behind.

Re: China is the manufacturing superpower

#277

Post by ReptileMan » Sun, Jan 05, 2025, 11:40 AM UTC

wakawaka28 wrote: post #221

whatshisface wrote: post #173

Earlier quoted context omitted.

It's hard to prevail in any war in a post-nuclear age. Profiting from a war with China is a total fantasy, it would be the end of both countries, even if we had as little trade with them as with the Soviet Union. The reason we are not manufacturing everything ourselves is that our incumbents refuse to allow anything to replace them, whether that is a more efficient company or a more able manager. They have the sway w…

>It's hard to prevail in any war in a post-nuclear age. Another cold war is possible, and someone could prevail eventually. >The reason we are not manufacturing everything ourselves is that our incumbents refuse to allow anything to replace them, whether that is a more efficient company or a more able manager. That is not true in general. We have laws specifically to promote competition. I'm not aware of anything lik…

>Germany is currently stagnating because of the toll the Ukraine war is taking on them,

The war is not inflicting any tolls on Germany. It was all self inflicted. It was pure stupidity not to be prepared to Russian aggression in Ukraine, and it was pure stupidity to respond while unprepared instead of brokering some Realpolitik peace.

Re: China is the manufacturing superpower

#278

Post by greggyb » Sun, Jan 05, 2025, 4:18 PM UTC

Jensson wrote: post #275

greggyb wrote: post #185

Earlier quoted context omitted.

The price (that consumers are willing to pay) is the only decent proxy for quality we have. Quality, of course, includes consumers’ preferences. If the one car sells at a market price of 1/5 of another, then the only reasonable conclusion is that, as judged by consumers, one car is worth 5x as much as the other, and therefore is 5x better. That’s what market prices are: the collective valuation of goods/services and…

If that was true USA would export its industry produces, but the rest of the world mostly don't want what USA makes, meaning it isn't actually worth that much.

It is true. Why do you believe the US does not export much?

The US is the number two overall exporter, number two exporter of merchandise, and number one exporter of services.

What do you believe US exports should be?

Overall exports: https://en.m.wikipedia.org/wiki/List_of_countries_by_exports

Merchandise exports: https://en.m.wikipedia.org/wiki/List_of_countries_by_merchan...

Services exports: https://en.m.wikipedia.org/wiki/List_of_countries_by_service...

Re: China is the manufacturing superpower

#279

Post by greggyb » Sun, Jan 05, 2025, 4:20 PM UTC

grugagag wrote: post #269

greggyb wrote: post #186

Earlier quoted context omitted.

I imagine most courts in the US would, in fact, find “3N” as blatantly infringing the 3M trademark.

They sell "3N" within China and the US can't really do anything about it.

Totally understood and not under debate. I could have been more clear.

"3N" is blatant infringement, or at least would be understood as such in the US. China simply doesn't enforce trademark infringement in the same way. I am not opining on whether China should.

Re: China is the manufacturing superpower

#280

Post by greggyb » Sun, Jan 05, 2025, 4:37 PM UTC

wakawaka28 wrote: post #230

whimsicalism wrote: post #200

Earlier quoted context omitted.

What the heck? When did this sort of economically irresponsible thinking become so mainstream? The benefits of protectionism are what are short-term, but they leave both us and China materially poorer in the long term. Life today is better than it was in the 1950s — and a large part of that is knowing our comparative advantage and leaning into it, not trying to restore long-dead industries by political fiat and throw…

>What the heck? When did this sort of economically irresponsible thinking become so mainstream? It's not "irresponsible" to deny the existence of some utopia where everyone's interests align. It's not worth competing with virtual slave labor. A perpetual race to the bottom is not what we should be striving for. With our current standard of living, or even half of it, we don't make anything that is going to be economi…

> You're not entirely wrong. There is a cost to duplicating effort. What is the cost of not being independent? Your country's sovereignty and maybe your life. Let us take care of ourselves as best we can and import only a small amount of stuff.

At what scale does that become true?

Certainly an individual is not better off importing as little as possible? This would mean not working any traditional job, not buying tools, not buying food, but crafting a comfortable life on one's own starting naked and with bare hands. Certainly it doesn't make sense to apply such a policy to the individual.

Should cities then be the scale at which this cutover happens? If a natural resource does not appear in its geography the citizenry must do without? Every city farms all of its own food, has factories for all told and merchandise its citizens wish for? Cars, industrial equipment, forestry, mining, clothing, food, technology, all made within the city limits? There is not even enough room for all of this.

A US state? A small country? What is the cutover point at which one is not impoverished by such a policy?

Or perhaps you believe I take too extreme a position on protectionism and think some trade is good at any scale. The same threshold must exist:

If it improves our well being to trade a little, what is the threshold at which more trade stops making us better off? Where is the inflection point at which a bit more trade hurts us? Can you point us to a country with an optional amount of trade? Or could you compare two countries based on their amount of trade and tell us which is better?

If you prefer a different framing: hopefully we can agree that isolationism at the level of North Korea is a negative for its citizenry, independent of the dictatorial regime they live under. It seems that you believe the US trades too much. So we can imagine a curve of some sort on a graph with the US on the left end and North Korea on the right. The slope moving from US starts off positive. The slope moving from North Korea starts negative. Somewhere between the two, there must be a maximum. How would one calculate it?