Can China build its own ASML?

My in law has a BYD Seagull, fail to see how it lags compared to similarly priced cars.

Chinese cars are incredibly popular in Europe, because they are better cars at the same price tag, even the more expensive ones.

I think it's asinine to think their high end manufacturing is crap, keeps us non competitive, let alone ignoring most of our stuff or large parts of it already comes from China.

And it has nothing to do with wages, modern high end manufacturing is highly automated and skilled engineers are as expensive as in southern or central Europe.

Vendor-lock is quite high, possibly higher in the US.

Look at iPhone, hardware is behind, restricted, unauditable privacy and questionable software in terms of performance (especially starting iOS 26, where you lost the choice for Liquid Glass).

Impossible to reasonably sync AirPods or watches, Macbook or choose the firmware version.

In comparison, the irony is that China offers the freedom (like with Qwen).

On these supposedly evil Chinese devices (phones, headphones, watches, etc), you have an open platform with great hardware, that you can modify as much as you want, and the only people who restrict you is... Google (making sure you cannot root without losing to important apps, so technically you can root, but practically you can't).

All the claims about "China = bad hardware and bad software" were true 20 years ago, but this is not the case anymore.

That being said, should certainly be quite cautious about default setup... you have US surveillance, PLUS, Chinese surveillance.

I do however wonder how long China can afford to pay the price for this. China is effectively heavily subsidising it's export and research efforts to catch up. But subsidizing with what? They don't have a magic money tree.

To flesh it out a bit more: people in the West complain that the Chinese are unfairly competing, by selling their stuff - cars, batteries, chips etc - at an unfairly low price, either via subsidies or an artificially low exchange rate (or both). There's also IP theft, sure, but there's plenty of home grown IP too.

So this means that when German workers build a car, they get paid a lot more than the Chinese workers. The Chinese AI researchers get paid less than the Americans - for the same work. Sure, it's a mix of patriotic fervor, different purchasing power of the salary (agricultural goods are cheaper in China because farmers get paid less for the same work), etc etc. Subsidies are the same thing scaled up - Chinese government collects taxes, i.e. makes Chinese people work more for the same ultimate outcome.

But this extra economic heft is not coming from nowhere. China is channeling funds that it could spend elsewhere, but instead spends on high IP industries.

Europe and US could do the same. But at a cost! They could tax people more, who would have less money to spend (making them unhappy and affecting GDP growth), or cut investment elsewhere. You could finance it with debt, and we all know how well this tends to go.

I don't know enough about the Chinese economy to even try to have an opinion as to where this money is coming from, and what they aren't spending it on but should. But the unwind is coming sooner or later. You can't subsidise something forever. You can't grow your GDP with subsidies. So what's going to give?

It might be that they are hoping to kill foreign industry, become a monopoly and milk it, like the US under Trump is trying to in smaller scale. But of they were a free economy, it would be a race - can they stay solvent for long enough? Liberal or not, they are still an economy, and you can't beat gravity forever. I'm curious how it plays out.