https://www.economist.com/media-assets/audio/062%20Business%...
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
This should surely be regarded as an opportunity to install solar panels at low cost while stocks and production capacity still exist.
When you miss sales targets by 99.9% it’s got to be more than a competition problem
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.
Mounts, connectors, wires, and inverters end up costing much more than the panels.
Boeing is an example of financiers running the company from an ivory tower on the other side of the country.
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.
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.
One could even argue they are a Chinese asset because they mislead Western investors so fantastically and consistently on basic economic topics, a sort of Great Filter.
It's fairly common across the EV industry in China.
BYD is an amazing product and makes good cars. The other manufacturers not so much, as is reflected in Chinese EV car sales [0].
That's why manufacturers like SAIC (MG Motors), GAG (Wuling Motors), etc have resorted to trying to export abroad because they cannot beat BYD domestically, but this faces hurdles as most other major markets abroad (VN, JP, SK, ID, IN, Brazil, EU, MX, etc) place tariffs on autumotiive exports, forcing Chinese manufacturers to either open entire factories abroad with JVs or quit those markets
Every factory SAIC, GAG, GAC, etc opens with a foreign JV is an equivalent set of jobs and IP lost in China.
[0] - https://autovista24.autovistagroup.com/news/big-boost-chines...
No, that's precisely my point actually. Boeing is one of the very few companies that maintained its local manufacturing capacity. (to say that they "didn't outsource" is not remotely accurate)
Despite everything that was pointing in Boeing's favor -- culture, financials, market, reputation; it was taken over by the MBAs that put McDonnell-Douglas into a nosedive and now all of that is gone.
So now, let's assume that Boeing sees the light and wants to rebuild their manufacturing chops. Who do they hire? Who can they hire, who has the manufacturing expertise? When I worked at Boeing 25 years ago, the old-timers were invaluable. Most of those folks are dead and gone; my generation should be graduating into old-timer-hood in the next couple of decades but Boeing hasn't invested in us. Wages have been stagnant, software is easier, tiktok is more exciting, and the young generation is used to being bossed around by MBAs who don't understand the work.
If not Boeing, the once-shining-example of American manufacturing what didn't outsource, who can bootstrap our manufacturing renaissance?
But what happens to the failures, especially since they are overwhelmingly subsidized by local governments?
Shanghai (SAIC), Jiangxi (BAIC), Guangxi (GAG), Guangdong (GAC), Hebei (Dongfeng), Beijing (BAIC), and other prefectures are putting tens of millions of dollars in SoEs that cannot compete with BYD domestically, and face preemptive hurdles entering foreign markets.
If these were private players, it wouldn't matter as much because they could be safely shut down, but these are mixed public-private, and this means a lot of misallocated capital due to political considerations.
Ideally, all these prefectures could better utilize that equivalent amount of money building domestic consumption instead - like I pointed to you before, the median household income in China is still around $350-400/mo in 2024, so even with a loan, a cheap class-A vehicle like a Wuling Hongguang Mini is still pricy.
Instead, these players are forced to export abroad leading to unnecessary trade wars and causing other countries to either limit ToTs with Chinese companies, or force Chinese companies to ToT to domestic players abroad.
This is the same story in PV Cells, Analog Chips, Mobile Phones, etc.
In fact, in one of the weirder turns of recent geopolitical history, the Vietnamese would prefer to be American allies over Chinese if forced to choose, and it's not even close.
[1]https://www.reddit.com/r/VietNam/comments/1c22j7l/vietnam_st...
???
IMO, that's a good development. I hope it lasts.
Getting quality out of a right-to-work state is difficult.
That's not a simple "just" you have there. Who is buying all those goods?
Xi Jinping (successfully) stimulated EV and semiconductor manufacturing through massive government investment and loans. The problem is that so many companies were funded that they are now viciously driving each other out of business through oversupply.
Because the supply chain networks are so dense, each bankruptcy easily cascades because the company then defaults on contracts with vendors and customers.
None of this, of course, is good news for US competitors like Tesla. With such a large field of vicious competition, it’s almost assured that the small set of businesses that succeed will be able to outcompete globally with extremely low cost structure. We see this happening with BYD.
Get over it. Boeing wasn't doing great and has always had struggles. They wanted to get further into defense and kill off a competitor.
Also Wharton came for everyone in the 90s and 00s. If Boeing stayed seperate from the evil Mac they still would have been inmundated by best practice short term bean counters from every MBA school in the country.
Also if you ask a machinist in Seattle or STL if Boeing outsources, they sure do, to those non-union untrained unqualified folks in the south. Nevermind all the moisture that gets into the plane when you wheel a 747 from an air-conditioned warehouse to the southeast sauna. Boeing has always fought with it's union so that wasn't the fault of the Boogeyman either.
Other than BYD (which has a strong product market fit and a very strong technical foundation in both battery tech and automotive development), where can the competition export?
Every major automotive market has preemptively or actively placed tariffs on Chinese automotive exports straight from China.
SAIC, GAG, GAC, BAIC, BYD, etc will all have to either ToT IP, open domestic factories, or create JVs in order to enter most markets.
BYD completely owns the Chinese EV market in absolute numbers - and the competitors had to preemptively begin exporting abroad, which sparked trade wars and worries of dumping, which made it harder for BYD and other players to export "Made in China" cars
Chinese manufacturers on the other hand, seem to be following the "build it and they will buy" philosophy. When you do this, prices (and profits) head towards zero.
This is the exact opposite of the Toyota Way, where customer demand serves as a signal (Kanban) to produce a widget and deliver it when needed.
>Instead, these players are forced to export abroad leading to unnecessary trade wars
This is very necessary, no reason not to take share from incumbent car makers, especially in RoW markets. ToT domestic players fine (E: as in fine to jurisdictions that, especially ASEAN / more integration), especially with current sanctions/potential, PRC FDI via recirculating USDs, better use now than risk lose later. E2: Let's not pretend PRC trade wars are any less strategic than US trade wars (like semi). PRC EVs sells -> EV piles -> energy infra -> sensors/fusion -> telco.
If you check the National Bureau of Statistics' data on 亏损企业 (月度数据 > 指标 > 工业 > 工业企业主要经济指标), https://data.stats.gov.cn you see that there is a yearly cycle where the number jumps in February: from 67,570 in 2021-12 to 132,371 in 2022-02 (January is skipped), from 91,222 in 2022-12 to 161,892 in 2023-2, and from 103,994 in 2023-12 to 167,895 in 2025-02. By plotting the last available month for every year, 2024 ends up sticking out a bit more than it will once the end-of-year data is out.
Nonetheless, the overall trend is undeniable.
Aside overcapacity should be synonymous of low prices, I still wait to see here in EU prices like in the BRICS area for products imported from China. An example a BYD Atto 3 here cost a bit less than 40k€ while in Thailand cost a bit less than 10k€ https://asia.nikkei.com/content/1f9ed40b4b44745e1a39fafaf94b... such price delta have no justification in mere free market economical terms, have only political justifications NONE OF THEM acceptable by the civil society. I still wait to see LFP batteries prices drops like in China to have a well-sized home battery at a price cheap enough to make buying it convenient, let's say 50kWh for 5k€. Let's say 15kW p.v. inverter for 1.5k€ etc.
If China manufacturers goes broke we customers do the same in EU, and I suspect in USA to, simply to enrich some local cleptocrats.
We want $1 products again at dollar tree (not $1.25 tree), and better quality for less money.
Otherwise we will just make the stuff in the USA ourselves. One day we will get smart and export more TO China because no one in China trusts the quality of anything made in China
In such a scenario, China could collapse at any time, and past performance is not a predictor of future results.
SK - South Korea
JP - Japan
FDI - Foreign Direct Investment
RoI - Return on Investment
JV - Joint Venture
ToT - Transfer of Technology ?
Ev tariffs are meh for china because they don’t sell here much anyway.
Moralizing arguments such as this one are FUD.
No worries. We all have lives.
> Some local jurisdictions
It's not some - it's a lot. And a number of these are not wealthy prefectures - Guangxi, Jiangxi, Jillin, Anhui, and Hebei underperform compared to the Chinese average on social indicators and economic health.
The amount of money spent to subsidize EV cars made by GAG, FAW, Dongfeng, Changan, Chery, JAC, etc that most Chinese buyers just don't think about for EVs when they can buy a BYD is staggering, and could be better used by the prefectures I listed to better living standards or further increase consumer spending via DBTs or a better welfare system (which itself has been devolved to prefectures since the 90s).
> This [export] is very necessary
Absolutely, and this is why every major automotive market (US, EU, TR, MX, BR, SK, JP, VN, ID, IN, ZA) has already or is in the process of closing their markets to direct "Made in China" automotive exports (as well as other sectors like renewables, consumer electronics, pharmaceuticals, etc). Why should these countries lose their domestic champions at the expense of Chinese players?
What large greenfield market can Chinese manufacturers directly sell to? And you can't say "Africa" - it's not a uniform market, and Chinese companies face competition from (depending on the region) Turkish, Japanese, Korean, Brazilian, Vietnamese, Indian, Emirati, European, South African, and American competitors.
This is the crux of the problem - the very low median household income forcing players to export.
Either the collective billions in subsidizes are deployed to push Chinese median household incomes to at least Malaysian or Mexican levels (~$10,000/yr) or even Thai levels (~$6,500/yr) in order to consume this excess capacity, or keep burning money subsidizing laggards while alienating foreign markets and partners.
> Let's not pretend PRC trade wars are any less strategic than US trade wars
At a high level it is, but the governance is atrocious. Just look at the First and Second Big Fund for example.
And anyhow, Chinese manufacturers in these sectors then face similar tariffs like EVs in the markets I listed above under NatSec or Dumping grounds, which in turn drives neighbors further into the US camp (eg. VN after the 2011 standoff and the Techo Canal, JP after Senkaku Diaoyu, TW after the 2014 trade war, SK after the 2017 trade war, India after the 2019-20 Galwan crisis, PH after the PoGo scandal, ID and the US CSP, etc).
This in turn means you guys will escalate under the fear of being encircled, which pushes those countries to further up the ante. The same fear Chinese nationalists have about the US is the fear those countries have about China.
Either way, this means China both loses potential economic partners/markets AND exacerbates an arms race.
It didn't have to be this way, but the MFA's and CMC's tone change since 2014 has drastically deteriorated China's relations with it's neighbors.
America: lots of profit, no product.
Maybe we can borrow from each other? I can think of a bunch of sclerotic industries in America that need to have their margins driven to zero.
You see, there is a 1.5m-2m new car market right next to China, completely abandoned by western players. And another 500k-1m market in Central Asia, where General Motors neocolonialist monopoly is waiting for disruption.
Of course it's not US or EU-sized market, but realistically, in the best case scenario I'd expect China to have at most 20% of US or EU. Here, they can take it all.
Similar policy PRC used when building up solar and battery industries. Subsidise a hundred companies, and few will come out as winners. Reportedly with real estate issues and semi trade war economy is facing headwinds and PRC is scaling down subsidies.
https://en.wikipedia.org/wiki/Timeline_of_the_South_China_Se...
I'm sure that has something to do with it, but such campaigns are catalyzed by china's military aggression in the south pacific. Morality is an afterthought.
Note:
> Unlike earlier psyop missions, which sought specific tactical advantage on the battlefield, the post-9/11 operations hoped to create broader change in public opinion across entire regions.
> ...
> Nevertheless, the Pentagon’s clandestine propaganda efforts are set to continue. In an unclassified strategy document last year, top Pentagon generals wrote that the U.S. military could undermine adversaries such as China and Russia using “disinformation spread across social media, false narratives disguised as news, and similar subversive activities [to] weaken societal trust by undermining the foundations of government.”
Which one? If you mean Russia (which by the way is only 600-700k), then those Chinese players face secondary sanctions in most markets which settle trade in USD, along with a lot of politically connected domestic players.
If you mean India, most Chinese players have been chased out or forced to transfer technology and majority ownership to Indian companies (eg. SAIC MG Motors India now being majority owned by JSW Group). Also, the dominant foreign players are Japanese and Korean with massive Indian government backing.
If you mean VN, ID, MY, or PH, then it's South Korean and Japanese JVs that have a dominant position along with govenenent backing.
> another 500k-1m market in Central Asia
Which is dominated by a mix of American (GM) and South Korean (Hyundai) JVs with UzAutos, Russian automotive players, and Japanese JVs with Pakistani+Indian players (eg. Toyota x Pakistani Army)
1.) Internal consumer demand for China has collapsed, due to real estate debt overhang, local government debt overhang, increasing job loss, and incoming and increasing college graduates. It's estimated that 80% of this year's current graduates are jobless.
2.) External demand for China has been decreasing, 3.5T total export in 2022, only 3.3T in 2023. probably below 3T this year. Due to geopolitical factors such as China allying with Russia, and increasing tariffs from every other country due to overproduction/overexport from China.
3.) EV (at 36B in 2023) is only 1% of value of all Chinese export (3.7T). Not going to rescue the Chinese economy at all. On top of that, only BYD is capable/making some profit, while every other Chinese EV is going to shut down in the next 5 years.
1.) recent 2024 huge scandal regarding oil container trucks swapping out cooking oil with cancerous industry oil without cleaning the tank. the trucks ended up covering up their tank with tarp so people can't see what kind of oil these trucks are carrying.
2.) videos of Chinese EVs just simultaneously combusting in the streets while driven or parked
3.) toxic chemicals found on Temu/Shien clothes, found by South Korea and US
Seriously, the leader of Germany in the 1930's, Stalin, Putin, Saddam Hussein, now Xi. All seized power domestically and then couldn't help themselves when it came to neighboring countries.
I’m not trying to make point about Stalin. Just trying to find if this is really a rule, but my historical knowledge is pretty limited. Intuitively I feel any overpowered political entity end up like shit. But interesting to see real data.
>It's not some - it's a lot.
It's a lot now, because the race just winding down. It will be some later, if local gov can dig hard enough to eat shit on land finance, they can learn to eat shit on losing out on race for XYZ strategic sectors. Are we going to pretend this initial overcapacity -> cull -> consolidation cycle hasn't happened before? It's textbook. Like bro, it's only been ~5 since capacity explosion ramp, last few years was shaking out winner, it will take a few more years before losers accept they've lost. You're portraying as some long term sunk cost that will never end, when cycle is barely even short term, and local govs are historically pretty good at ditching dead ideas. A few years to adjust course is about as responsive as governance can be. Everyone knows model of "quality growth" = lots of regional hubs up for grabs in many industries PRC wants to compete with western incumbents on, local gov going to ditch dead weight and try to grab the next big thing. And you know what, some are just geographically rat fucked and won't make it.
> staggering
Naw, it's good deal. I surmise you're thinking about CSIS report that overestimates subsidies per vehicle (nvm subsidies are drawing down), a few $1000 per vehicle last few years now made 20k-30k quality vehicle accessible to 10k buyers. Fuel savings on 11k avg annual kms -> EV is ~$400. Proliferating new energy vehicles to 50% market share in short term is going to pay for itself in terms of fossil imports and energy secuirty.
> Why should
They wouldn't, they'll do what they do, and PRC glad to FDI their way, and entrench PRC components into global supply chains. Are you going to pretend all those competitors are on the same cost:value level as PRC? Just randomly making lists doesn't make a compelling argument.
> forcing players to export
Except what are most of the auto export? ICE vehicles, mostly from western manufactures with idle PRC capacity because PRC market not buying their ICE after shifting to EVs. Meanwhile PRC EVs selling abroad at reasonable markup, we're already seeing shifts in ASEAN against SKR/JP leaders. Where's the NEV excess capacity, oh right, it doesn't exist. Most % of NEV prorduced still absorbed by domestic market, less % export vs other automakers.
> consumption
Meanwhile I'm sure know the argument that PRC consumption about OECD average with proper accounting, that western wonks like to ignore to push the lack of consumption narrative. All the while disposable income according to states.gov.cn that you link frequently is growing at health clip YoY. And for whatever reason, you seem to enjoy obfuscating per capita to USD instead of PPP or local currency and use local prices for comparisons. Like it matters BYD dophin sells for 20k USD in malaysia but 10k USD in PRC. Lot's of shit just much cheaper in PRC since PRC producer. Like PRC doesnt magically overtake US on protein consumption because they spend all their money on protein (yes they love pork), but also because they consume a lot of stuff, most stuff just happens to be cheap.
Was First and Second Big Fund attrocious? It seemed so until export controls forced PRC semi to coordinate, and then they realize big funds built a shit load of pieces, but just never connected them. Dumping 500b into semi over ~10 years to setup conditions to move away from 300-400B PER year semi impmorts is fair deal, especially considering how PRC indigenous semi doing last post sanction compared to how CHIPs doing.
> or keep burning money subsidizing laggards while alienating foreign markets and partners.
Again is it burning? Again subsidies phasing out, and actually effective in driving down durable unit cost. Is it alientating foreign markets or partners? Seems like tike most are fine with following PRC JV path, taking PRC FDI, and so far seems like PRC is fine with that arrangment too. Except you know, US whose allergic to anything PRC. Are we also ignoring PRC exports still hitting/maintaining near record levels, including with India. Is it any worse than US spending 5%+ GDP than average healthcare spending for less life span, i.e. ~1.4T annually. Or the aforementioned 700b on fossil subsidies. Is PRC spending a 200B on NEV subsidies that will save trillions in keeping money into PRC compnaies and energy import costs in perpituity... burning money?
In similar lens, was First and Second Big Fund attrocious? It seemed so until export controls forced PRC semi to coordinate, and then they realize big funds built a shit load of pieces, but just never connected them. Dumping 500b into semi over ~10 years to setup conditions to move away from 300-400B PER year semi impmorts is fair deal, especially considering how PRC indigenous semi doing last post sanction compared to how CHIPs doing.
> neighbours
And does it matter if SKR/JP/TW/PH goes into US camp? The point is to bleed the first 3 that are high end export competitors. US security partner gotta US security hedge regardless. That's less an economic battle more a military force balance, one which PRC is increasing gap in theatre. Whose To Lam's first visitor? To PRC. I think blob wank thinks PRC is really interested in playing nice with US partners in region, when PRC see knos no amount of playing nice is going to get US security architecture out of east Asia short of force. In the meantime (peacetime) focus on eroding them as economic competitors. And we can all pretend PRC is making a folley not using carrots when the only real solution, is a much bigger stick.
It was always going to be this way, PRC was always going to move up value chain to compete with tier1 economies/exporters. PRC was always going to move up value chain, it was always going to take a swipe at leading incumbants, and at PRC scale, it's was always going to aim for her disproportionate share of pie. In a world where PRC is adding more skilled workforce than rest of the world combined + going for 11 on involution driven industrial output is also world where PRC is poised to win the arms race. She simply has too much people not to do all these things and still have 100ms farmers/informal economy. There was never going to be anything but (arguably zero sum) fight for many pies.
TLDR We've interrogated this before, I don't find you rehashing latest blob narratives on PRC behaviour compelling. I don't find their conclusions/analysis particularly sincere/unmotivated. Trade numbers seems to show PRC is building lots of economic partners AND winning the arms race. Meanwhile US security architecture straying further and further from what was deemed neccessary (AGILE, NGAD, lol missiles in vietname) while acquisitions/prepositions in theatre by US+co is being out paced by magnitudes by PRC. I sit any wonder defense blob last couple month started referencing PRC as no longer "pacing power" but "past pacing". That's what happens one PRC shipyard builds more than entire US shipbuilding combined.
> You guys
Again, I'm Canadian, like you. I'm just not (a presumably American related/adjacent) recovering policy wonk. Anyway feel free to have last word. You're still a very intelligent posters with IMO very obvious biases, as am I.
I tried to buy an electric golf cart which looked like a Hummer on Alibaba, but importing it (getting it past customs) was challenging. They had me at MP3 player!
If I could buy an EV for $3k, it would be worth the hassle with charging infrastructure and hiding an illegal vehicle from the coppers. </joke>
Stalin did start many wars, disastrous invasion of Finland, invasion of Poland, Molotov-Ribentrop pact with Germany and so on.
So how small a part of the total is the module cost? Even if you can only save 5% you still make more than 50% extra profit.
They should try to outsource to their colonies in Central Asia instead.
1) Consumption is "sluggish", i.e. it's small positive growth instead of large precovid positive growth. It's not negative decline let alone collapse. Get off the FLG. Employment rate steady, including new grads at 20% accounting for those in school and not looking for work (i.e. the Chinese tertiary way), 40%-50% for graduate cohorts who takes time job hunting / not ready to settle. Which they will, given broad unemployments is steady, i.e. new grads get job after 1+ year and roll into genpop employment stats. There's 1% drop in new salaries in some industries, people are staying in jobs longer. "New productive" industry jobs, i.e. the high value ones set to drive PRC economy including energy, semi etc experience continuous growth. In aggregate positive, not fantastic, but also opposite of collapse.
2) Exports stabilizing after record covid highs, still only ~20% of gdp, i.e. PRC hasn't been (barely) export dependant for 10+ years at high of ~35%. If you follow brad setser, he'll note PRC exports probably being massively/deliberately hidden/under reported because two way data suggest much higher. BTW export dependant countries regularly over 50-100% export to gdp. Entire overproduction/overexport narrative is retarded considering how little PRC exports as share of GDP.
3) Who said EV was suppose to rescue PRC economy? PRC too big for 1 sector/industry to make difference. Collection of New productive industry jobs doing their part, sure. But generally when you remove RE drama, which they deliberately crippled, you get current modest 5% growth instead of previous 7-8%. Settling to modest growth is expected sooner or later. Modest growth (~5%) is enough to increase GDP PPP gap vs US. Most of projections on PRC passing US GDP assumes eventual modest growth + FX movements i.e strength RMB. Which they strategically don't want to because right now it's all about pricing out incumbant competitors in new export categories. Like CCP can get easy propaganda win by moving RMB band 5-10% to entier per capita $14000 USD high income range, but they don't because modest growth works fine.
You mean that the wet rainy Seattle weather combined with jungle like south east make a bad moisture combo, right?
Also I forgot to add Mussolini and his designs on Greece, Balkans, North and the Horn of Africa.
Yes.
> (which by the way is only 600-700k)
700k was the official figure for 2022, which, besides the obvious reasons to be an outlier, is also skewed by the fact 300k more cars were imported as "used" to workaround stopping of the official deliveries. It was more than 1m new cars sold in 2023, now it's 700k just for the Jan-Jun 2024.
> then those Chinese players face secondary sanctions in most markets which settle trade in USD
Yet the reality shows they don't really care much. Why should they, though? The big ones have the leverage of controlling the access to the Chinese domestic market, which is too important for the Western manufacturers. And the small ones are already effectively excluded (by the tariffs and such) from the markets that can implement secondary sanctions.
> Which is dominated by a mix of American (GM) and South Korean (Hyundai) JVs with UzAutos
There is no economic reason why GM dominates that market. GM produces too little cars, of a questionable design age and quality. The day someone is able to talk local government into a deal with favorable tariff conditions (not circa 100% import tax that exists now), GM business in Central Asia is dead.
The cheapest EV in CN rn is around $9k.
Assuming you could even get a Wuling Mini road-cleared, you will need to pay out of your eyes in tarriffs and import taxes, making a used Tesla Model 3 roughly comparable price wise.
At a macro-level, Chinese federal statistics are decently trustworthy in the 2020s, and there is enough transnational trade and dealflow that egregious tampering can and would be caught, and is very damaging.
> China could collapse at any time
There is a difference between stagnant/slowing growth (which is what is happening) and "collapse" (nowhere near that level).
Nor would you want to wish a Chinese "collapse".
It's because of rhetoric like yours that other Chinese people automatically dismiss policymakers abroad who are trying to push for reforms for an economically stabler China - which itself requires healthy engagement with the world.
the gov is heavily investing & publicizing "New productive forces"[] that include "new energy vehicles"
[]: https://en.wikipedia.org/wiki/New_productive_forces
[]:https://www.miit.gov.cn/zwgk/zcwj/wjfb/yj/art/2024/art_ad15b...
Are we talking about good old U.S.A ?
China has been going the same way. They are now capable of making very high quality products. Taiwan went down the same route, South Korea too.
In the long term, it's not China that has a problem, it's complacent western manufacturing companies. It's not just a failure to innovate. Some have used their market power to exploit consumers such as the US vehicle manufacturers pushing people to 'trucks' because it served their own interests. They abandoned the small (read sensible) car market. Top selling car recently in Brazil was the BYD Seagull - knocking Ford off.
[1]
> In 2021, the economic mix of the Philippine economy was approximately 61% services, 17.6% manufacturing, and 10.1% agriculture. (https://www.trade.gov/country-commercial-guides/philippines-...)
[2] https://en.m.wikipedia.org/wiki/Call_center_industry_in_the_...
"How are China's 'new three' export pillars powering the economy?". https://news.cgtn.com/news/2024-03-07/How-are-China-s-new-th...
EV is literally one of the key pillars championed by the Chinese government as part of its 'new economy' initiative, straight from the horse's mouth.
BYD is building an EV plant in Turkye for $1bn.
https://electrek.co/2024/07/08/byd-building-huge-1-billion-e...
Some overly subsidized EV companies are going broke, and their inflated housing market crashes. Evergrande. Of course. That's a good thing.
Still stronger growth than everywhere else. And their chip industry will soon be independent. This US war backfired massively.
Considering the market situation and geopolitical factors, it is foreseeable that labor-intensive, low-value-added manufacturers are going bankrupt. Frankly, Europe and the US face similar situations.
Regarding Taiwan and the South China Sea, the distrust of the East among Chinese people is influenced by historical experiences with North Korea, Japan, and Vietnam. However, in today’s world, war is a significant and serious issue, and ordinary citizens do not want to face its bitter consequences. What confuses me is that Western media often portray China as a threat, while Chinese mainstream media exaggerate these reports, deepening mutual hatred.
P.S. I’m Chinese.
Xi Jinping is not stupid (quite the opposite), he knows that 52,000 companies never had a chance. So it is not the real economy we are talking about.
When Dutch people arrived in what is now Indonesia in the 16th century they ran into Chinese merchants- the only locals who could keep up their mercantile endeavours.
Ofcourse China is at its core only a symptom. The world economy- and everything that goes with it- is irrevocably shifting to Asia. It's kinda offensive to see Americans talk about Vietnam or India. They see them as vassals not independent nations with interests of their own.
You’d need to generalize the pop science to the British, French, Spanish and portugues empires then address the genocide of indigenous tribes by America, Canada and Australia
UzAvtosanoat (the Uzbek govt manufacturer) is the largest automotive manufacturer in Central Asia, and because every single Central Asian country has a FTA with Uzbekistan this puts them at a massive advantage.
It is UzAvtosanoat that manufactures GM, Hyundai, and other cars for the Central Asian market. Even BYD Central Asia has to partner and ToT IP to UzAvtosanoat for manufacturing and entry into the Central Asian market [0].
My point is that "Made in China" products are limited by export restrictions as every country has in place. What happens to the glut of cars "made in China" that cannot be sold abroad? This is the crux of the overproduction problem.
[0] - https://www.byd.com/eu/news-list/BYD_Signs_Investment_Agreem...
You read the article above right?
There is a mutual lack of trust and dialogue amongst Chinese and American decisonmakwrs - most of whom started their careers in the late 1980s/early 1990s and thus lack modern in-depth experience in the West or China respectively.
Both the Trump and Xi admins both bled competent advisers at the expense of populist and hawkish advisers, which degraded the ability for nuance in both the US and China's policymaking.
Imo, the biggest issues have been the MFA/State Dept and the CMC/DoD in China/US. Both had massive attrition of experienced policymakers in the 2016-19 period, which caused a game of economic brinkmanship.
The Nanyang community is not uniformly pro-PRC.
A massive portion of them have blood and political relations with HK and Taiwan, and the younger generations don't have the same level of attachment to China as older less educated Nanyang Chinese do.
You can see this in Singapore and Thailand, with Millenial/GenZ Nanyang Chinese who can't even speak Mandarin anymore and almost entirely consume Western media.
In Malaysia, PRC nationalism is stronger, but that's in reaction to horrid race relations between Chinese and Malays/Bumiputera due to policies like "Ketuanan Melayu", memories/experiences from the various race riots of the 1960s-70s, and also the insularness/otherness of the Chinese community compared to other communities in Malaysia.
That means for a 10kW system I'm looking at $20k USD in Canada vs. $6600 USD in Australia. That's such a huge difference that 5-10% cost reduction in Canada would barely make a difference at all. I have serious doubts that any Canadian household could recoup the cost of a big solar install over the lifetime of the panels vs simply investing that money in ETFs.
Perhaps the situation is different in the US?
Nope! I was speaking of offshoring mostly in the services industry, not the manufacturing industry[1]. Things like call centers (as you linked.) Chinese companies like BBK use Philippines call centres to serve customers in English-language markets. Which isn't at-all uncommon—the US does the same thing—but China hadn't been doing much offshoring of any kind until the last decade, and the little they have done has focused almost solely onto the Philippines.
There's also something that you might not exactly call "offshoring", but it's a related idea. It's a combination of "exclave-building" and "foreign investment": Chinese companies responding to increasing levels of Chinese tourism in the Philippines by buying up Filipino companies (most visibly in the hospitality industry, but also everywhere from construction to finance) and modifying those companies to cater more to Chinese-audience interests; then, within China, promoting tourism to the Philippines — and specifically to those cities they've built up a presence within — to increase ROI on those investments. From a Filipino perspective, this was kind of a virtuous cycle, as it resulted in a lot of money being pumped into their economy. But this too has now sharply declined.
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[1] But why hasn't China begun to outsource manufacturing yet?
AFAIK, it's because the Chinese manufacturing sector has so much inertia — so much built up talent, so much invested CapEx, so many local partner relationships, so many achieved efficiencies of scale — that even if domestic labor prices seriously rise within China, it'll take a long time before companies are willing to bite the bullet and invest in moving any of that.
And it's also a bit of a chicken-and-egg problem: if you first offshore some middle step of manufacturing, the rest of the manufacturing process would still be cheapest for you [with your existing China-based processes] to continue to do in China; so now you'll have to ship raw goods out to the offshoring country, and then bring processed goods back into China for finishing. And during that, you'll be in competition with "full-pipeline Chinese" companies that aren't bothering to do that.
IMHO I'd mostly only expect China to offshore steps that either exist at the beginning or end of a manufacturing process. Especially origination of raw goods, e.g. mining. Which would seemingly be the long-term goal of China's infrastructure investments in various African countries.
Also I doubt that you can compare Australian and Canadian installations that easily. Most of Australia is a lot closer to the equator meaning that the same panel will have a higher average output there than in Canada.
Anyway, I'm not in the US. My question was a general one about taking advantage of these economic troubles, treating them as an opportunity for someone to make a profit rather than simply regarding them as a problem for everyone.
The Canadian price seems a bit high, comparable with high cost Norway (where I live). The online calculator I have just checked is offering a 6.5 kWp system for about 10 kUSD, so your 20 kUSD would buy 13 kWp. I know why it's expensive in Norway, skilled manual labour costs are high, is that the same in Canada?
It's similarly difficult to justify though. At the sorts of electricity prices we had in Norway before 2022 it would take 20 years to pay back but if the trend to increasing rices continues that could fall to as little as 7 years.
The Phillippines has the opportunity to deal with their relationship with China themselves, or the US can whisper in the ears of its leaders to take certain actions, making promises to them that make the offer all but irresistible.
The way you framed your comment makes it seem like you think the Phillippines is what, too noble of a country to bend under US influence?
The costs I gave are for the ratings of the panels themselves. They don't include differences in production due to sunlight hours. If you include those I wouldn't be surprised if the Australian figures were closer to 10x better than Canada once you factor in the sunlight hours.
> who can bootstrap our manufacturing renaissance?
Look at SpaceX. You don’t need a great wizard of yore to teach you how to do things if you iterate and learn. They went from a joke 10 years ago to completely dominating and transforming the launch and LEO space industry.
Or, look at Boeing 70 years ago. They didn’t have a magic culture of excellence then either and it wasn’t bestowed on them by elders. They built it then and it can definitely be built again.
It was, actually. The machinists at Boeing 70 years ago were taught their craft. They didn't just figure it all out from scratch; some aspects of aeronautics were novel but shipbuilders were making propellers before William Boeing was even born.
> They built it then and it can definitely be built again.
I can't see why I should trust this line of reasoning. I baked a cake yesterday, so I should definitely be able to bake a cake today, right? But I ran out of flour and stores are closed.
Not to say that it can't be done, but in today's economy, with today's culture, it just isn't a sure thing.
The very last thing this was intended to do was be a corruption scheme. Why does everything have to be a conspiracy these days.
Let's not forget that some of China's isolation is self inflicted. China's nine dash line map, claiming 90% of the South China Sea, only drove their neighbors into the US's open arms.
This is absolutely incorrect. Most of the materials machining advancements to make light aircraft parts had to be done specifically for aircraft. Ship building is completely different and largely irrelevant.
> I can't see why I should trust this line of reasoning.
Because this wasn’t some long line of training from centuries of wizardry. Materials science was a joke 100 years ago. We can do what they did then to learn manufacturing but we can do it significantly faster because we have simulations and chemistry knowledge that wasn’t lost.
