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

The U.S. wanted to knock down Huawei. It's only getting stronger

wsj.com

Post reply on HN
Print view View original

41–50 of 74 posts

Re: The U.S. wanted to knock down Huawei. It's only getting stronger

#41

Post by mrmetanoia »

lysace wrote: post #14

1. This article's headline made me lose some trust in the WSJ, given that: 2. Huawei has gotten stronger in China and weaker elsewhere. https://archive.ph/JgNQg/d40b9dd122f4675c47c29c9a4528bb60734... Edit: Flagged? What rule does this comment break?

It also just seems unnecessarily hostile as a headline - the US banned/sanctioned them after seemingly valid security concerns. It wasn't like they just said 'hahaha let's knock down Huawei!' Nobody likes to have to replace a vendor ;)

I'd speculate someone somewhere at these Chinese companies has to be thinking like Dr. Evil's henchmen after turning his empire into legit successful businesses worth more than the evil schemes he cooks up.

"ugh do we have to put backdoors in, they're gonna figure it out eventually and we're already making money, what's the point of this again? Down with our enemies or something?"

Re: The U.S. wanted to knock down Huawei. It's only getting stronger

#42

Post by alephnerd »

riehwvfbk wrote: post #40
alephnerd wrote: post #39

Earlier quoted context omitted.

Yet the median Chinese household cannot afford those EVs, because median household income has stagnated at around 33k Yuan/$4.5k for years now. If you're overproducing yet there is limited ability for domestic consumers to put these products, this means you are dependent on foreign trade partners. Yet even these trade partners are forcing Chinese players to manufacture in those markets or face high tariffs and revoca…

The median American can't afford to pay for a new car outright either. And they've got loans in China too.

Absolutely, yet absolute consumption remains low [0]. The kind of consumption on high tech gizmos is barely 13% of per capita household consumption (so median is much lower).

There just isn't enough spend on a quarterly basis to subsidize industries like EVs, Chips, etc industry without export - and most markets are only increasing the barrier of entry, or requiring domestic JVs.

Every EV, PV, Construction, etc JV that a Chinese manufacturer creates in countries like Mexico, Brazil, Indonesia, India, etc is an equivalent amount of jobs and domestic investment lost.

What's the point of being ahead if you're spending tens of billions yet most domestic consumers cannot afford them. This only kills domestic capacity long term (and is what Zhou Qiren has argued for years and why he was so prominent at the third plenum).

Edit: cannot reply below so replying here

Yet even with low prices, products are still relatively expensive. For example, auto loans tend to be limited to 36 months by banks to non-high income consumers. Assuming you get a 3.85% loan (as the current Chinese LPR is) to purchase the BYD Seagull (cheapest EV), even with a 50% down you are looking at half of the median monthly disposable household income (~$150/mo). The per capita Chinese household spends no more than $50/mo on transportation AND telecom according to govt stats [0].

And this is the crux of the issue - if most Chinese cannot afford most products, and foreign markets are increasingly adding tariffs where does all this stuff go?

[0] - https://www.stats.gov.cn/english/PressRelease/202404/t202404...

Re: The U.S. wanted to knock down Huawei. It's only getting stronger

#43

Post by elfbargpt »

akira2501 wrote: post #4

> “The U.S. government’s campaign against Huawei is inadvertently bolstering the company’s resilience, echoing the age-old adage that what doesn’t kill you makes you stronger,” Then in the _very next_ paragraphs: > State money was critical. [...] billions of dollars flowed from the Chinese government to Huawei through preferential buying contracts and subsidies So what does the "age old adage" have to do with anythin…

I'm not seeing what the contradiction is. The US made a bet that Huawei couldn't survive without foreign help, and they seemingly lost that bet. Every country subsidizes private industry to varying degrees (CHIPS act, etc...)

See this NY Fed analysis of how export controls have worked out so far: https://www.newyorkfed.org/research/staff_reports/sr1096

Re: The U.S. wanted to knock down Huawei. It's only getting stronger

#44

Post by lovethevoid »

kerkeslager wrote: post #35
wongarsu wrote: post #24

Earlier quoted context omitted.

Isn't that just Chinese policy cancelling out American policy. China prevented sanctions from killing Huawei by subsidizing them. But often those kinds of subsidies make companies weaker and less competitive in the long run. There are plenty of examples of that in the US. So if Huawei did get stronger and more resilient that is noteworthy. But it's probably too early too tell.

> China prevented sanctions from killing Huawei by subsidizing them. But often those kinds of subsidies make companies weaker and less competitive in the long run. There are plenty of examples of that in the US. Such as?

The Big Three US automotive companies

Re: The U.S. wanted to knock down Huawei. It's only getting stronger

#45

Post by ok_dad »

kerkeslager wrote: post #35
wongarsu wrote: post #24

Earlier quoted context omitted.

Isn't that just Chinese policy cancelling out American policy. China prevented sanctions from killing Huawei by subsidizing them. But often those kinds of subsidies make companies weaker and less competitive in the long run. There are plenty of examples of that in the US. So if Huawei did get stronger and more resilient that is noteworthy. But it's probably too early too tell.

> China prevented sanctions from killing Huawei by subsidizing them. But often those kinds of subsidies make companies weaker and less competitive in the long run. There are plenty of examples of that in the US. Such as?

Boeing is financed in large part by US gov spending, for one. I expect most shipbuilders in the USA are similarly financed by navy contracts.

Re: The U.S. wanted to knock down Huawei. It's only getting stronger

#46

Post by riehwvfbk »

alephnerd wrote: post #42
riehwvfbk wrote: post #40

Earlier quoted context omitted.

The median American can't afford to pay for a new car outright either. And they've got loans in China too.

Absolutely, yet absolute consumption remains low [0]. The kind of consumption on high tech gizmos is barely 13% of per capita household consumption (so median is much lower). There just isn't enough spend on a quarterly basis to subsidize industries like EVs, Chips, etc industry without export - and most markets are only increasing the barrier of entry, or requiring domestic JVs. Every EV, PV, Construction, etc JV th…

Low percentage of household income spent on gadgets could also simply be reflective of how dirt cheap they are domestically in China.

To take your argument further: Californians spend way more on housing than people anywhere else in the world. They must all live in palaces.

Re: The U.S. wanted to knock down Huawei. It's only getting stronger

#47

Post by yorwba »

alephnerd wrote: post #28
wongarsu wrote: post #24

Earlier quoted context omitted.

Isn't that just Chinese policy cancelling out American policy. China prevented sanctions from killing Huawei by subsidizing them. But often those kinds of subsidies make companies weaker and less competitive in the long run. There are plenty of examples of that in the US. So if Huawei did get stronger and more resilient that is noteworthy. But it's probably too early too tell.

> Isn't that just Chinese policy cancelling out American policy Pretty much. And that's the point from the US side ( http://industrialpolicy.us/resources/SpecificIndustries/IT/f... ) The whole idea of the Sullivan Principle is to force Chinese players to spend more and more money but remaining the same distance apart (2 gen) [0]. The idea is Chinese players keep burning money building capacity, yet lagging behind rel…

> Already China's GDP per Capita has remained stagnant since COVID began [1]

That is the "current dollar" value, which is not adjusted for inflation. If you look at the inflation-adjusted data https://data.worldbank.org/indicator/NY.GDP.PCAP.KD?location... the stagnation disappears.

Re: The U.S. wanted to knock down Huawei. It's only getting stronger

#48

Post by lelandbatey »

kerkeslager wrote: post #35
wongarsu wrote: post #24

Earlier quoted context omitted.

Isn't that just Chinese policy cancelling out American policy. China prevented sanctions from killing Huawei by subsidizing them. But often those kinds of subsidies make companies weaker and less competitive in the long run. There are plenty of examples of that in the US. So if Huawei did get stronger and more resilient that is noteworthy. But it's probably too early too tell.

> China prevented sanctions from killing Huawei by subsidizing them. But often those kinds of subsidies make companies weaker and less competitive in the long run. There are plenty of examples of that in the US. Such as?

Harley Davidson Motorcycles and the tariffs that support them

https://youtu.be/EOwxxsPaogY

Re: The U.S. wanted to knock down Huawei. It's only getting stronger

#49

Post by melasadra »

alephnerd wrote: post #37
FooBarWidget wrote: post #31

Earlier quoted context omitted.

> The whole idea of the Sullivan Principle is to force Chinese players to spend more and more money but remaining the same distance apart (2 gen) [3]. The idea is Chinese players keep burning money building capacity, yet lagging behind relatively speaking, and that money could have been used for better applications by China. This sounds like a perspective from a finance/law person who doesn't understand how engineeri…

> But it's absolutely godsent from the perspective of China being a developing country that 1) still needs to lift up a lot of people, not only out of monetary poverty, but also out of educational and skill poverty Chip Design and Manufacturing only generates so many jobs. These are highly specialized and automated industries that don't employ that many people. A subset of the younger generation of Chinese absolutely…

>Agreed, yet the median Chinese person remains poor by global standards (median household income is 33k yuan/yr as Stats CN has announced).

Surely the likes of COVID as well as the housing crisis had at least 10x more impact than the US' Huawei ban. Housing sector crisis alone affected an estimated 500k people losing their job and between 1-2 trillion USD losses.

It seems to me if Huawei ban had any deterimental effect on China's GDP per capita then it would be more like a rounding error.

Re: The U.S. wanted to knock down Huawei. It's only getting stronger

#50

Post by NikkiA »

ok_dad wrote: post #45
kerkeslager wrote: post #35

Earlier quoted context omitted.

> China prevented sanctions from killing Huawei by subsidizing them. But often those kinds of subsidies make companies weaker and less competitive in the long run. There are plenty of examples of that in the US. Such as?

Boeing is financed in large part by US gov spending, for one. I expect most shipbuilders in the USA are similarly financed by navy contracts.

The whole set of next-gen tanker scandals prove how boeing is kept in business.
Post reply on HN