Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Why is China smashing its tech industry?

noahpinion.substack.com

Post reply on HN
Print view View original

211–220 of 401 posts

Re: Why is China smashing its tech industry?

#211

Post by nemo44x »

toss1 wrote: post #16

The Western financial elites thought they were exploiting cheap Chinese labor by promoting outsourcing of manufacturing - it would make for far greater profits. Meanwhile the Chinese were exploiting the West's myopic focus on quarterly profits to gain access to and experience in fabricating and designing the top western technology. The scale of this strategic blunder by the Western societies will be considered of his…

> The analysis in this article brings that into focus as well as anything I've yet seen. If the West does not rapidly regain focus on the things that matter -- real manufacturing, engineering, and AI (not consumerist opiates for the masses) -- we are soooo screwed.

When China can build a decent airplane then I'll be interested. Until then, they produce/replicate relatively simple tech and for whatever massive scale they have in their manufacturing, they lack sophistication and complexity in many ways. They're doing their thing and doing it well but they don't produce sophisticated, leading edge things or processes for the most part.

The USA has never manufactured more than it does today. Don't confuse manufacturing labor force size with outputs. High tech manufacturing in the USA leads the world by a significant margin today. Much of what China is manufacturing is considered routine and trivial.

Re: Why is China smashing its tech industry?

#212

Post by onepointsixC »

mountainb wrote: post #199
caeril wrote: post #11

> China may simply see things differently. It’s possible that the Chinese government has decided that the profits of companies like Alibaba and Tencent come more from rents than from actual value added Excellent observation, and I hope, for China's sake, that this is the reason. The United States is likely in for a long-term rude awakening when it finally realizes that an economy predicated on negative-value-add acti…

China produces more steel in a month than the US does in an entire year of all types. US steel production is around 7% of Chinese steel production. Could the US ramp up steel production etc. on a crash basis under war conditions? Yes, but the overall picture is not great, given that China could also ramp up its production under the same constraints.

China could not ramp up steel production because it imports the raw materials from far away, mostly from Australia. Most of the raw materials, including energy and even food are imported into China. None of those supply chains would be left untouched in a war.

Re: Why is China smashing its tech industry?

#213

Post by adventured »

majormajor wrote: post #182
Animats wrote: post #150

China is not "smashing its tech industry". It's cracking down on private Internet companies that acquired too much power through network effects. This is completely consistent with CCP doctrine. Anything that central has to be state-owned. Xi declared this year that while digitization is important, “we must recognize the fundamental importance of the real economy… and never deindustrialize.” Right. China, remember, h…

> “we must recognize the fundamental importance of the real economy… and never deindustrialize.” This hasn't been really put to the test yet, has it? What's the cost of labor delta compared to the places where outsourcing from China would be attractive currently?

> This hasn't been really put to the test yet, has it?

Yes. Their textile industry has been gradually leaving for much of the past decade, as cheaper production exists in several other countries at this point. Textile dominance by China peaked around 10-15 years ago. They will lose labor cost sensitive industries to their cheaper competitors as their economy continues to climb, as labor costs continue to climb. It took many decades for the US textile industry - the world's largest for a while in the 20th century - to be worn down by this same process. During the first 2/3 of the 20th century the US was often a leader in inventing new textile technology and manufacturing processes. Toward the waning days many US textile makers tried to modernize and or consolidate their domestic operations as a competitive advantage, it didn't stop the process. Most sent their manufacturing overseas ultimately. China is currently attempting to modernize, reduce labor in the manufacturing process, and that also won't stop the industry from leaving. Textiles are one of the first major industries that tend to leave due to being particularly labor cost sensitivity.

China is still the world's largest textile exporter, and may retain that crown for a long time yet given their size. A large chunk of their market share is going to be gradually dispersed across two dozen other nations.

Vietnam for example became the largest textile exporter to the US in 2019 (pre pandemic), overtaking China. Vietnam's GDP per capita is $3,600 versus $11,800 for China. Vietnam is in the position that China was 15 years ago in that regard. China will struggle to compete with labor that costs 1/2 or 1/3 what theirs does.

Re: Why is China smashing its tech industry?

#214

Post by vikiomega9 »

mc32 wrote: post #92
caeril wrote: post #11

> China may simply see things differently. It’s possible that the Chinese government has decided that the profits of companies like Alibaba and Tencent come more from rents than from actual value added Excellent observation, and I hope, for China's sake, that this is the reason. The United States is likely in for a long-term rude awakening when it finally realizes that an economy predicated on negative-value-add acti…

It would be quite interesting to see a cleaving between us in the “West” and those who follow China’s model. I can see the disadvantage of the saccharine part of our economy and the advantages of focusing on nuts and bolts. It’s the difference between letting people decide what’s right for them and having a more planned society. Obviously planned societies have been a recurring theme in history, most notably socialis…

One idea that seems to make sense to me is that social mobility is the equivalent of starvation in a socialist setup. What we see today with the poorer sections of society especially African Americans is a strong indicator that all systems of power should be viewed critically and with compassion. The vast majority of the poor in America for example are obese and that's one cost I can think of that we pay for the current system. Btw, I'm not saying poverty is the cause, just that the system is setup to maximize free market outcomes that are not good but we put up with them, https://www.washingtonpost.com/lifestyle/food/the-true-conne...

Re: Why is China smashing its tech industry?

#215

Post by autokad »

Mizza wrote: post #53
caeril wrote: post #11

> China may simply see things differently. It’s possible that the Chinese government has decided that the profits of companies like Alibaba and Tencent come more from rents than from actual value added Excellent observation, and I hope, for China's sake, that this is the reason. The United States is likely in for a long-term rude awakening when it finally realizes that an economy predicated on negative-value-add acti…

Hijacking this comment a bit, but I haven't watched real TV in a very long time but have been tuning in again because of the Olympics and Jeopardy. I'm seeing an incredible amount of ads for companies that let you gamble real money on your phone. Sometimes it's back to back to back to back commercials for online app casinos. This seems really dangerous and a sign of a tragically unhealthy and predatory economy - I ca…

I remember Jim Cramer on CNBC saying he wouldn't recommend fossil fuel, gun, and cigarette companies because of ethical reasons. then he went on to push one of those gambling companies, who on his show said it was their goal to get every family in America gambling on their platform.

I'm like, you said that? are you trying to get banned?

Re: Why is China smashing its tech industry?

#216

Post by logimame »

itmayno wrote: post #179
logimame wrote: post #162

Earlier quoted context omitted.

And the alliance countries you've listed are also suffering from those exact same problems (climate change, Covid lockdowns, capital flight, demographic crisis, deindustrialization, widespread unrest, a hopeless young generation). And debatably, some of them have much worse on some fronts than China. I do think that every country in this world, whether it be the US, China, or my country, are experiencing the same eff…

Sure some countries have some of the same problems, I don’t disagree. However, the magnitude of the problem is 10x worse for China. Remember that China is still extremely poor - 600M lives on $100/month. And another 500M lives on $1000/month. All this is the party’s doing, and the people won’t forget it. So when things goes bad like it is now for China, it will go really bad for its dictator. Also other countries pro…

In counterpoint, many people in the US will never forget when the political leaders have transformed an mainly industrial country which gave stable jobs for their households, into a deindustrialized husk of a country led by greedy bankers, rentiers, and scammers. All this is the two parties of the US's doing, and the people won't forget it.

We've seen plenty how democratic countries can go through civil war and political struggle, this isn't something that only happens to dictatorships. And I am just so tired of the dichotomies most people have in their minds for the current form of state governments, both China and the US's political systems are complex and nuanced enough that you can't really call it communism/capitalism or dictatorship/democracy anymore. I was just comparing about which government is actually more competent than the other for dealing with the current problems in the world. One seems just a little bit more competent than the other, but that's as far as it can get.

Re: Why is China smashing its tech industry?

#217

Post by bigbillheck »

itmayno wrote: post #179
logimame wrote: post #162

Earlier quoted context omitted.

And the alliance countries you've listed are also suffering from those exact same problems (climate change, Covid lockdowns, capital flight, demographic crisis, deindustrialization, widespread unrest, a hopeless young generation). And debatably, some of them have much worse on some fronts than China. I do think that every country in this world, whether it be the US, China, or my country, are experiencing the same eff…

Sure some countries have some of the same problems, I don’t disagree. However, the magnitude of the problem is 10x worse for China. Remember that China is still extremely poor - 600M lives on $100/month. And another 500M lives on $1000/month. All this is the party’s doing, and the people won’t forget it. So when things goes bad like it is now for China, it will go really bad for its dictator. Also other countries pro…

> All this is the party’s doing, and the people won’t forget it.

By at least one metric, the PRC has managed to eliminate 'extreme poverty' (even Brookings agrees: https://www.brookings.edu/blog/future-development/2021/01/25...)

Re: Why is China smashing its tech industry?

#218

Post by powerapple »

caeril wrote: post #11

> China may simply see things differently. It’s possible that the Chinese government has decided that the profits of companies like Alibaba and Tencent come more from rents than from actual value added Excellent observation, and I hope, for China's sake, that this is the reason. The United States is likely in for a long-term rude awakening when it finally realizes that an economy predicated on negative-value-add acti…

Some personal opinion here: top Chinese internet companies makes most their money domestically, the top US companies are real international companies, and Facebook makes $5 billion of ad money from China, can you imagine that? It is other countries are losing money because their users contribute to the success of Facebook, YouTube but they are not making enough tax revenue from it. All these like economy is not good for society, but the situation is different in US than China.

Re: Why is China smashing its tech industry?

#219

Post by horsawlarway »

throwaway0a5e wrote: post #181
sydd wrote: post #170

Earlier quoted context omitted.

It is. If it would be totally banned it would result in an emergence of a black market. We have the same thing on Hungary, there is one state controlled gambling company that's under heavy regulation (18+ only, full with warning signs against gambling, barely any advertisements, has only a few old-school products like scratch cards)

Sure a black market would be worse, but why not just regulate it. Government shouldn't have an incentive to ensure that gambling exists and remains profitable which they do so long as they're running it. Government shouldn't be directly engaged in the business of any vice for that reason.

The government still has that incentive if it's taxing companies that profit from gambling.
Post reply on HN