Comment by throwaway4good

The San Francisco System is proving as strong as ever especially with recent deals inked between NATO members and US allies in APAC, wtf are you talking about?

Don't get your hopes up. Europe, Japan and S Korea are aging quicker and more countries are sympathetic to China than the US.

The time to clip China's wings was the late 90s, but we were too drunk on triumphalism and busy looting Russia.

nope. The difference is before, China might reach some product competitive parity with western products using western supply chains, but only in selective domains that have government tax dollars support. Tax dollars in China isn't limitless. Chinese government might give SMIC money to buy Western machines to build a 7nm fab line for a few years, but TSMC will move on to 5nm and all the users will switch, SMIC is losing money and relies on tax dollars to stay afloat. Then the west might go: hey, free trade, no subsidies, with some trade pressure on CN exports, CN government will be convinced to give up on supporting money losing endeavors.

Before USA's trade war, 99% of CN companies, even the state owned firms, believe in 造不如买make your own is not as good as buying. Most purchase decisions is based on market forces, better product, more reputation, competitive priced = deal. Its really hard for Chinese companies in chips, semi equipment, etc to break into the market. Say you want to compete with TI in microcontrollers, nobody wants to buy from you when they have mature products from TI.

Now, the USA with export bans and its own subsidies, single handedly destroyed the "make your own is not as good as buying" mentality. Every company in every sector now has to worry, if I buy a microcontroller from TI for my toaster, what if Washington have a mental break down tomorrow and decide to ban it with a stroke of pen. Even if my alternative isn't as good, I won't have a business. And as companies starting using alternatives, that product gets better with feedback loop and iteration. Rome isn't build in a day, but it's built by human hands. Once a product starts the commercial cycle, it improves. People believed that US sanctions only targets selected companies, then Oct 2023 GPU ban targets the entire country, every single company. Now even a game streaming company can't buy the GPU they want. What do you think companies with 10B dollars of revenue streaming video games are going to do? Invest in every single semi-conductor companies in the entire supply chain, from GPU, to EDA, to semi-tools. USA is attacking huge sectors of CN economy, sectors with revenues of hundreds of billions of dollars, making an enemy out of all them, what do you think they will respond? The demand is still there, people will still buy their toaster, watch livestreamed video games, companies will need to operate, and the supplies are needed. Whoever can fill that demand laughs to the bank.

The trade blockade strategy might work for smaller countries. But 1) China has always been many forms of trade blockade ever since the country is founded. See wassenaar arrangement. China can't get advanced machine tools, EDA, CAD, and many others. So there are many small companies, research labs, SOEs, universities that have been doing R&D on these tech for decades. The problem is products in these areas have very strong winner takes all effect, they don't have marketplace battle tested products. But the flip side is that they have talents, they have some IP, know how and tech. Chinese semi tools companies are rapidly advancing in the last 6 years, but they started 20 years ago because the west's sanctions on China. So when US wages the tech blockade, Chinese don't start from scratch, they take what they have in the lab, not mature, but have some value, and start putting it on production lines and iterate. 2) CN has a large internal market, and increasingly competitive in global markets for all kinds of goods, even if the entire western world stops buying from China, the rest of world + internal market is big enough for many products to be profitable and iterate. As long as there is demand, there will be people study and making it. 3) CN has surplus of university grads, many universities, etc, what if we find them some work to do?

Oh and the reason why CN has been doing self-sufficiency is because the country has always been sanctioned since its founding. And western decades of western sanctions have created CN's R&D industrial base in "hard tech", such as materials, automation, industrial software, optronics etc. I guess many policy experts forgot this fact and never bothered to study what really goes on in China. They forgot they have been sanctioning CN for decades and the Chinese have always thought they can't rely on others. Why do you think they can trust you when you sanction and attack them? The self-reliance mentality is created by western sanctions. The solution is always build trust and remove the rational that causes others to think a certain way.

Yes. I think in the US politics "blob" eg. the sanctions against Huawei are still seen as enormously succesful in the sense that they did huge economic damage on the company without China being able to retribute directly. However today Huawei mass-produces a modern high-end phone and if you open that phone, none of the components inside are produced by western companies, everything is Chinese. That is really remarkable. And it is not going to stop with a phone.

nope, the tech trade war has always been there since the country was founded in 1949, for tech such as semi conductors, machine tools, industrial software, etc. US just escalated it by placing more restrictions and targeted large swathe of the CN economy. But because of the decade of sanctions, the R&D industrial base for many of these tech is there, just very small, no market maturity, but there is human resources, there is IP and know how. Sanctions just give these actors a chance to really improve.