Comment by pjc50
12 days ago
> China generates over twice as much electricity per person today as the United States. Why?
This appears to be completely wrong? All the stats I can find say that the US has about 4x the per capita electricity generation of China.
Other than that it seems to be mostly good points, especially the overall one: you cannot do this overnight.
> If you’re building a new factory in the United States, your investment will alternate between maybe it will work, and catastrophic loss according to which way the tariffs and the wind blows. No one is building factories right now, and no one is renting them, because there is no certainty that any of these tariffs will last
Policy by amphetamine-driven tweeting is a disaster.
> 12. Enforcement of the tariffs will be uneven and manipulated
Yup. The 145% level seems designed to create smuggling, and the wild variations between countries to create re-labelling. It's chicken tax trucks all over again.
> This is probably the worst economic policy I’ve ever seen
Per Simpsons: this is the worst economic policy you've seen so far. The budget is yet to come.
> If American companies want to sell in China, they must incorporate there, register capital, and name a person to be a legal representative. To sell in Europe, we must register for their tax system and nominate a legal representative. For Europeans and Chinese to sell in the United States, none of this is needed, nor do federal taxes need to be paid.
This is .. not a bad idea, really. It would probably be annoying for small EU and UK exporters but less so than 10% tariffs and even less so than random day of the week tariffs. Maybe one day it could harmonise with the EU VAT system or something.
(also I think the author is imagining that sub-par workers, crime, and drugs don't exist in China, when they almost certainly do, but somewhere out of sight. Possibly due to the internal migration control of hukou combined with media control?)
> Other than that it seems to be mostly good points, especially the overall one: you cannot do this overnight.
It's annoying Americans were given only two choices - offshoring is great and let's keep doing it, and, as you say, the opposite, meth-fueled let's bring back manufacturing overnight. The kind of slow and steady protection and promotion of home-grown industry that China and most of Asia so successfully used to grow their economies was completely absent as even a talking point.
This is the part that is so frustrating to me, and not just with regards to tariffs. It's that I see the extremes being so laughably bad (though not necessarily equally - I'm not "both sides"-ing this), and more ludicrously bad is that I've seen positions that don't follow these extremes as being derided now as "centrism". E.g. before the administration's attack on higher education, I do believe a lot of elite universities had completely jumped the shark with their ideological purity tests like required DEI statements. And importantly, there were thoughtful, measured criticisms of these things, e.g. https://whyevolutionistrue.com/2024/02/10/jon-haidt-goes-aft....
But the administration attack is so ridiculously egregious and demands an even worse, government-imposed ideological alignment, that making logical arguments in this environment feels almost pointless.
> making logical arguments in this environment feels almost pointless.
Unfortunately this is the culmination of social media as a controversy machine, that promotes the worst arguments.
> ideological purity tests like required DEI statements
Example?
There's a controversy industry that cherry picks the worst examples of student-politics excess in these regards and then carefully conflates it with university policy.
As well as the sad truth that as soon as you take away "DEI" requirements the segregationists come back and purge the library, delete all the black Medal of Honor recipients from the website, etc.
40 replies →
Tangential comment, but I now see people adding disclaimers reiterating their political affiliation to their posts regularly and I want to say that you shouldn't have to justify bilateral criticism. It doesn't imply equal magnitude, and it's only taken that way by bullies in dogmatic bubbles.
5 replies →
I couldn't agree more and worry that even if the country makes it out of this period in one piece the well will have been poisoned on a lot of these topics. We should have big initiatives to make government more efficient, and reduce the national debt, and get back to merit-based processes. But after so much bloviating and fake initiatives that claim to do those things, but actually do the opposite, it's going to be a tough sell to make a real push in the foreseeable future.
You’ve been conned if you think overactive DEI was anything more than a minor annoyance in 99% of American universities. Did some people overdo it in a destructive way? Of course. But it wasn’t anything that was going to lead to major problems. The problems come from the folks who can’t just roll their eyes and move on but instead feel personally attacked and hold a permanent grudge instead of realizing that they themselves probably weren’t all that special.
4 replies →
> and more ludicrously bad is that I've seen positions that don't follow these extremes as being derided now as "centrism".
You can't stake out a position without getting called some name somebody invented to denigrate that position. Welcome to modern politics on the internet.
The weird part for me is this: While the economy was evolving, Production was offshored from US for cost-reasons, but also in part to focus on higher-skill labor in US, delegating the low-skill mass-production to China.
Over time, China also developed mid/high level skills, complemented their low-skill production offering with it and now competes in new industries, new tech, etc.
So...to compete with China, the country with 4x the US-population, the solution is that low-skill labor needs to return to US....?
Shouldn't instead the focus be to again foster mid/high-skill labor, moving the part that is offshored again towards low-skill labor...?
I think the mistake here is the model of low-skill/high-skill labor is not a useful distinction. Manufacturing is high skill period, however there are low-infrastructure and high-infrastructure products and factories. The labor wages themselves are a factor, but an increasingly minor factor in product costs. By bypassing investment in US manufacturing skills and infra, the US sat itself on the sidelines for the ability to build, staff, and supply modern low, medium and high infrastructure factories.
It's not impossible to build back, but it would require long term stable policies to favor it at more levels than just tariffs.
35 replies →
The problem is ecosystem effects. High-tech industries evolve from and depend on low-tech ones. There is a limit to how much they can be separated.
Moving the low-cost jobs offshore was fine until automation filled a lot of those jobs. Now the high skilled automation skills and infrastructure (production lines and robots) are also offshore. I have done my fair share of western factory tours and the number of people on the factory floor is soberingly low... they are simply not needed, as they line runs like a vast, complicated machine.
3 replies →
Trump et al. really run a motte-and-bailey argument here. They woo reasonable people who agree that critical industries: food, energy, defense-adjacent, metals, etc. - must have substantial capacity on-shore or at least very near. They then flip to what amounts to massive handouts for his rust belt base, basically saying we should make everything here.
The obvious answer is this:
1. it doesn't matter if our t-shirts are made in Bangladesh.
2. it does matter if our stuff is made in an enemy nation (china).
3. U.S. labor is too expensive to move back to mass manufacturing the way we used to do it, c.f. baumol's cost disease.
4. offshoring and illegal labor have suppressed investment in automation and manufacturing technology for decades, which will be painful to undo.
The sensible outcome of these facts is
1. Focus on moving everything out of china to other cheap countries with reasonable levels of human capital.
2. Focus on re-shoring critical industries.
3. Launch moonshot investments into robotics and automation. Bringing back a big chunk of manufacturing is sustainable; bringing back jobs is not.
4. Invest in large-scale roll-out of SMR energy so we have reliable power for this new industrial build.
8 replies →
[dead]
Thing is, manufacturing in America is up. The 2008 crises dealt a blow, but manufacturing has been building-back. I don't think people realize how many high-value items are made in the United States. Let the East Asians make our mass-consumer junk while we focus on the high-value stuff.
Just goes to show the administration isn't working with facts and doing the hard-nosed analysis required to drive effective policy.
https://fred.stlouisfed.org/tags/series?t=manufacturing%3Bou...
The administration is probably aware of this and doesn't care. A huge portion of his base were rust belt voters who want what are essentially handouts, which trump intends to achieve by forcing the American consumer to pay $30/hour for el cheapo goods that could be made elsewhere and have no tangible security impact.
You're mistaking the rhetoric he uses to sell this idiocy to the rest of the country for a good-faith argument.
4 replies →
> Thing is, manufacturing in America is up.
I'm looking at the first chart, "Manufacturing Sector: Real Sectoral Output for All Workers" [1]. It grew until Q2 2000, when it was at 97.2. In Q4 2024 it was at 98.6. And let's not ignore how almost all leading semiconductor manufacturing (which are in and required for nearly everything) has moved to East Asia.
[1] https://fred.stlouisfed.org/series/OUTMS
2 replies →
> we focus on the high-value stuff.
agreed but Trump just gutted the CHIPS act for no other reason than because it was enacted by Biden (the typical "undo everything the last prez did" just like Trump 1.0).
You can argue that Intel is a badly run company, not worth saving etc etc, but if want to save US manufacturing, then Intel, and its ecosystem, would be the first place to start. Otherwise, TSMC, Samsung and China (still playing second-fiddle but investing billions to catch up) will dominate. Certainly better than trying to keep coal plants open.
Ideology aside it's really hard to find _any_ rational thought behind these moves.
It turns out good policy takes a long time to play out and isn't well suited for the current destabilized US political system where nothing good gets done and the rare things that do get reversed within four years.
That IS what Biden was trying to do though with the CHIPS Incentive Act. He was trying to onshore production of semiconductors in a partnership with TSMC. Didn't do him any favors, and Harris lost the state of Arizona anyway. Americans had the choice between a party that was serious about trying to onshore some manufacturing and a party that wasn't, and it made the wrong choice because vibes, basically.
> because vibes, basically
This may be more accurate than you realize. Both Democrat and old Republican party rhetoric and policies were pro-globalization/offshoring, with the occasional exception such as CHIPS (and corn subsidies). It's not surprising nobody believed they were changing direction, if for every "we're bringing semiconductors back", they heard ten "your car is German your phone is Chinese your tacos are Mexican, how dare you interfere with glorious Free Trade!"
7 replies →
We were getting the slow and steady version at least for chip manufacturing with the CHIPS Act but Trump has a major need to get credit for everything so that's being torn apart too.
The US faces a much tougher hill to climb though in regards to bringing manufacturing back. China had it easy because they had most of what you could want; a huge labor force that could upskill to manufacturing (the rural poor population), cheap labor (kind of an extension to point 1 but also includes their lower COL and wage expectations over all), and low environmental barriers.
To bring manufacturing back to the US is a way harder lift; we have a lot tighter labor market, if we shift a lot of people to manufacturing someone needs to take the jobs they leave. We (well I at least don't enjoy the idea of going back to when rivers caught fire on the regular) don't want to strip environmental protections back to a level to make it cheap to dispose of waste. The best targets are low labor, high price, high skill goods, like, I don't know, chip manufacturing!
>The US faces a much tougher hill to climb though in regards to bringing manufacturing back.
I saw a headline yesterday that says there are more pets than children in Japan. How long until this is true in the US? The truth of the matter is that there is no workforce left in the United States, and will be less of one by the time manufacturing does spin up. In WWII, the Army was happy at how many of the young men there had come from farms and were familiar with using/driving heavy equipment, how many knew some welding, etc. Then after the war, that translated right back into mnufacturing there these now older men were familiar with "making things". They could do actual labor. How well will the part-time baristas and Uber Eats delivery drivers and Dollar General shelf stockers do on the assembly line?
>if we shift a lot of people to manufacturing someone needs to take the jobs they leave.
If we could bring back manufacturing, then we would need to restructure our society such that those jobs lesser/menial jobs could go undone (or be automated). But we can't really bring it back, and they will bring in others on any number of weird visas no one has really heard of to do the lesser/menial jobs which are the only ones left. The people who set this in motion aren't even just retired, they're already dead of old age and there's nothing anyone can do about what's coming.
2 replies →
> It's annoying Americans were given only two choices - offshoring is great and let's keep doing it, and, as you say, the opposite, meth-fueled let's bring back manufacturing overnight.
There were a lot of slower manufacturing on-shoring incentives during the Biden administration that would have presumably continued under the Harris administration. Mainly around green energy and electric vehicle manufacturing incentives - which have successfully resulted in new auto, battery, and supply chain factories being built mostly in red states - and semiconductor manufacturing. The Biden administration also maintained and increased tariffs on specific types of products coming from China including EVs.
So I don't think your categorization of the two choices Americans were given is quite accurate.
As someone watching EV & battery plants break ground in my state (GA), this is absolutely my take.
Biden's infrastructure and funding bills were basically doing exactly this, and their foreign policy largely aligned with this goal as well.
I was not a huge Biden fan early in his presidency (Breaking the rail union strike and the complete lackluster response to actually prosecuting criminality in the outgoing admin were not my desired policies - democrats are markedly too corporatist in general).
But his infrastructure bills were sorely needed practical steps to doing a lot of good for a lot of folks in the US. There's a reason so many politicians then tried to take credit for them (incl Trump).
Well, money talks and it's hard to choose the other option. On one hand bring manufacturing back to US and pay them higher, because otherwise the pay in McDonald's is better with a less demanding physical (cmiiw, don't live in US).
On the other hand, keep manufacturing outside of US for cheaper labor to keep price low and having bigger margin. It's an easy choice to make.
And again this is not a US specific problem, it's almost all of countries nowadays have a massive wealth gap that makes people racing to the bottom of living / working standard.
The thing is also that absolutely nothing about the overall situation changed meaningfully over the last 50 years or so.
People had the exact same concerns and fears when electronics manufacturing started shifting to Japan like 50 years ago-- they went in the same way up the value chain that China did, and they started losing a lot of the industry with rising wages, too, exactly like what we see with China => Vietnam/Indonesia/... nowadays.
I think 90% of the whole political debate about the economy is misplaced nostalgia combined with problematic local wealth inequality-- poor countries lifting themselves up by manufacturing stuff for low wages is how the whole system is actually supposed to work from my perspective; describing that as "ripping off the American people" is completely unhinged, misinformed self-delusion to me.
9 replies →
>It's annoying Americans were given only two choices - offshoring is great and let's keep doing it, and, as you say, the opposite, meth-fueled let's bring back manufacturing overnight.
Excuse me, but I am old enough to remember Biden's program such as CHIPS, a slow and steady protection and promotion of home-grown industry.
America had the choice. It chose wrong. Are Americans going to assume the consequences of their choices or are they going to lie to themselves they weren't given the choice? That last option would fit more with the "character" of the America nowadays, the one who voted Trump: make mistakes and blame someone else for it.
I don't think the Rust belt really gives a shit about high tech industry making chips.
I have seen this in my own country when mega corps build highly automated data centres that only employ a few local cleaners and security guards.
1 reply →
> The kind of slow and steady protection and promotion of home-grown industry that China and most of Asia so successfully used to grow their economies was completely absent as even a talking point
The slow and steady way that post-WW2 Korea and Japan did needs a unanimously agreed 10-20 year long game plan between industry and government, which is incompatible with democracies who change colors and strategies every 4 years where the new administration begins to tear down everything the previous administration did because they serve different voter bases and corporate lobby groups.
It is also incompatible with the US since a lot of corporations made bank due to offshoring and will fight it every way they can since they don't want to deal with costly US labor who can unionize or sue you for millions if they break a finger at work. Even TSMC Arizona had to bring half the workers from Taiwan, and it's not like they're making tchotchkes.
They were brought from Taiwan due to their expertise and familiarity with TSMC processes. America doesn’t have a glut of people with EUV fab experience — they all already work for Intel.
1 reply →
>The slow and steady way that post-WW2 Korea and Japan did needs a unanimously agreed 10-20 year long game plan between industry and government, which is incompatible with democracies who change colors and strategies every 4 years where the new administration begins to tear down everything the previous administration did because they serve different voter bases and corporate lobby groups.
The message of "we're gonna find some way to undo some of the damage of off shoring and find some way to put heavy industry back to work" has been included in one way or another in every presidential candidates platform at least as far back as Obama's first term.
The specifics change from party to party and candidate to candidate but this isn't a new thing. The common man has been clamoring for some sort of change from the status quo for the better part of a generation now. It's only recently that the situation has become such a priority that elections are won or lost on it.
I fully expect that whatever administration comes next will continue on the path of on-shoring, if perhaps in a more reasonable way.
>It is also incompatible with the US since a lot of corporations made bank due to offshoring and will fight it every way they can since they don't want to deal with costly US labor who can unionize or sue you for millions if they break a finger at work
The people who actually run manufacturing and heavy industry really resent the current off-shoring status quo. They only do it because the sum total of other policy pushed by short sighted wall street financiers and/or environmental/labor advocates makes it the only viable option. I think they'd be happy to come back if doing so was financially viable, they just want it to be predictable (something current policy making surely isn't, lol) so they can plan around it because investments in those industries are made on decades long timelines.
I think we're at the point now where there's the political will to let the punch press eat some fingers to keep the factory open.
There's various forms of democracy and many are not as chaotic as the US kind in regards to long term plans.
A good example is the general global approach to Net Zero. It's slow, methodical, science based, negotiated.
But if anyone brings up planning for 2050 it's usually in the context of "It's all bullshit, politicians are crap, they're just lying to you and kicking the can down the road till they retire" (and if you scratch the surface you'll have even chance that the person saying that has been radicalised into not even believing there's a problem to be solved).
But only the US is in and out of the Paris agreement etc.
3 replies →
> The kind of slow and steady protection and promotion of home-grown industry that China and most of Asia so successfully used to grow their economies was completely absent as even a talking point.
I think this is because China is an autocracy, so they can make long-term plans. Democracies that swing as wildly as the US currently does is no place for that, and that's not limited to the new administration.
Did America stop being a democracy under FDR? Conflating specific term limits with autocracy/democracy is a bit dramatic.
There isn't anything physically stopping America from doing what China is doing. We literally did it first (in modernity)! Albeit for too short a time before the robber barons and foreign interests retook control.
2 replies →
Was it absent? The "Green New Deal" was hitting on some of that. You can't beat "<Some other country> is going to pay for it" and "Coal jobs are going to come back", especially when there's no accountability or fact checking.
But Americans were given that choice? The chips act was an industrial policy play based on the industrial policy playbook of east asian countries like South Korea and Taiwan.
I'm not a fan of industrial policy or the chips act, but it seems to be just the choice you are asking for.
I find it annoying that you think the other choice was “offshoring is great.” Spending on US factory construction surged under Biden. This was largely due to stuff like the IRA and the CHIPS Act. If voters had made different choices in November 2024, in Congress as well as the Presidency, I think we could have had even more aggressive industrial policy — instead of this absolute shitshow that will permanently damage the US’s economic position.
On the other hand, I am a believer in the idea that voters get the government they deserve. So maybe we deserve this.
Largely due to government welfare, business is great!
2 replies →
The candidate who opposed Trump during the primaries would have done something very similar to what you said. But then she was born with ovaries so the Republican Party wanted nothing to do with her as the top boss.
Democrat voters didn’t want anything to do with her during the 2020 primaries and didn’t turn out as much for her in 2024 as they did for Biden in 2020, so who are the real misogynists here?
6 replies →
NO candidate should get a free pass. They should _all_ _always_ have to primary. That would have likely sorted out Biden earlier in the cycle and we might have had real choices other than Harris to replace the incumbent who flubbed that debate so badly that it was clear they were not going to get elected.
[dead]
> China generates over twice as much electricity per person today as the United States. Why? >> This appears to be completely wrong? All the stats I can find say that the US has about 4x the per capita electricity generation of China.
I believe the comparison is absolute production, not per person. Anything else would be odd. Considering China has 4x the capita of US it would mean that in absolute terms China is producing 8x the energy of the US. In reality it seems to be roughly 2x (although both sources are a bit outdated):
US 2023: 4.18 trillion kilowatt-hours (kWh) of electricity from utility-scale generators. Additionally, small-scale solar photovoltaic systems contributed around 73.62 billion kWh 1.
China 2021: 8.53 trillion kilowatt-hours (kWh) of electricity
--
But the staggering difference is how much of the electricity is attributed to the Industrial sector:
China: 70% (~6 trillion kWh)
US: 26% (~1 trillion kWh)
So overall China allocates 6x the electricity to production compared to US...
China electricity consumption is growing by 6-8% a year and is likely to hit 10500 trillion kilowatt-hours in 2025. Which at $0.10/kwh the avg is a $1 trillion dollars. Though from what I understand in China home users are charged about $0.07 and industry $0.08 so $7-800 billion a year on electricity alone.
They are rapidly moving to renewable with grid scale BESS auctions avg $66-68/kw they are likely to have electricity prices at $0.01-0.02 over the next few years. I think it will be extremely tough to compete with China in manufacturing unless there is huge investment in renewable and storage systems to keep electricity prices competitive with China who are going to move on from coal over the next decade.
Not only that. Renewable tech is also a major export sector for China. Most batteries and solar panels bought elsewhere are Chinese. And they are dominating EV manufacturing and manufacturing of pretty much everything else. China has invested and is now getting enormous returns on investment. The rest of the world has divested and is now missing out. Not investing enough was a mistake that needs to be corrected.
It used to be that the Chinese economy was based on just cheap labor. It's now increasingly based on cheap energy and automation. Replicating that elsewhere needs to start with modernizing energy infrastructure. Without that, there is no chance of competing. Manufacturing is energy intensive. So, cheap energy is indeed a key enabler.
The cost per kwh is a good one to call out. I think the medium term target for that should be < 1 cent per kwh. Effectively it trends to zero because there is very little marginal with solar, wind, and batteries other than the depreciation of infrastructure, equipment, etc. over time.
> I believe the comparison is absolute production, not per person
Original article definitely said "per person".
China allocates much more to industry and/because it allocates much less to personal consumption. Especially things like air conditioning. US per person consumption is still 2x that of EU average.
> Original article definitely said "per person".
Yes, not your fault, I believe the AUTHOR meant to compare absolute production.
> China allocates much more to industry and/because it allocates much less to personal consumption
Let's not fall into the same hole: In relative terms, US residential is more than 2x of China's residential power use, but that's relative to the much larger production use. In absolute terms their residential power-allocation is not that different actually:
CN: 15% (1.2 trillion kWh)
US: 35% (1.46 trillion kWh)
Now, on a per-capita basis the difference is staggering, as China consumes 20% less to serve 4x the population...
China is also more electrified generally than the US. They only just pulled ahead but the rate of change is startling.
Since 2000 they've gone from 10% of final energy being electricity to nearly 26% while the US has been basically flat around 23% and they are both predicted to grow (or not grow) at roughly the same in the next few years.
Well, they are making all the stuff for the rest of the world!
Despite all the hand wringing, heavy industry uses a lot more power than data centres.
I did some quick research on this. McKinsey has a pretty slick-looking web-facing report titled "Global Energy Perspective 2024" report [1] has a table [2] showing breakdowns by industry.
[1] https://www.mckinsey.com/industries/energy-and-materials/our...
[2] SVG...! https://www.mckinsey.com/~/media/mckinsey/industries/energy%...
Can someone explain to me why EU VAT is considered a tariff, while US sales taxes are not? They both seem a sale tax to me.
Because VAT is collected at the border on imports, some people (wrongly) consider VATs a tariff. Considering that VAT is rebated on exports, VATs are trade neutral.
Sales tax as implemented in the US is not as tax efficient as VAT due to the impact of sales taxation on intermediate transactions during manufacturing. VAT only taxes the incrementally the value added at each transaction) whereas sales tax applies to the entire value at each stage.
Hmm how is it different in the US do you not get back in the sales tax that you paid for your input. Here the middle man pay tax on the buying price and then collects on the sell price. Then has to pay the government minus what they paid as input sale tax. So all increments on the price gets taxed till the end user. But the tax itself is not taxed again.
Im fairly certain VAT is collected at point of sale in the EU.
Does the US charge sales tax on B2B transactions? Really? Well no wonder you have problems with domestic manufacturing.
4 replies →
Only people who are wrong consider VAT a tariff. Yes, importers have to pay it, but so do local manufacturers.
VAT has basically the same effect as sales taxes with a much more complicated tax incidence.
At an individual level, it’s not more complicated: it’s reimbursed instead of exempted. And if you’re charging it, it’s easier, since you simply always charge instead of maintaining your list of exceptions.
2 replies →
Really wondering about the same, since VAT is applied to everything too, not only imported products and services.
The answer is: rhetoric. It's a fake argument to justify US tariffs. It won't work for people like you and me, but Trump fans will love it.
They're not. Only disingenuous charlatans say they are.
On crime they most centrically do, watch the China Show (not the bloomberg one) on youtube. One example given on the show is that Once you go into northern villages and small towns you start seeing propganda posters on why you shouldn't take drugs. Homelessness is widespread and present too but you just wont see it in city centers more on the outstkirts.
Police in cities will beat homeless people and get them back on buses to where their hukou is, so the homeless that remain are very good at hiding. Hostile architecture is also very common in China. But there is a lot of sub quality housing (eg in sub-basements that lack windows or good ventilation) that allow much of the working poor to at least be technically housed even in expensive cities (many restaurants also provide housing for their staff in the dining area after closing, or did at least 20 years ago). The outskirts used to have more slums than they had today in Beijing, most of the slums have moved into sub-basements as far as I can tell (called the “ant tribe”).
Crime really is much lower than it was a decade ago. People have more money, societal trust is higher. Drug use in clubs has always been a thing, but China differs from the USA in that their is no social support at all for addicts (so they either get clean with help from their family or they die).
Do not watch it please unless you want to consume worldview-distoring propaganda and become more ignorant as a result. It's made by 2 American expats who gotten kicked out of China when visa-requirements were tightened, and no-skill immigrants were no longer welcome.
They've become anti-China youtubers serving the hungry China-hating audience on how China is bad and a paper tiger.
Instead watch this guy (https://www.youtube.com/@Awakening_Richard). I'm not saying he's unbiased, either, but he's thoughtful and I think he brings insight into how the Chinese intelligentsia thinks about how the world works.
But back to your point - it's oft repeated that Chinese population decline will destroy China in the long run and poverty in Chinese society.
He made a video on this exact issue.
https://www.youtube.com/watch?v=pdRH7aPWGGc
The TLDR version is that about half of the Chinese population lives in desperate poverty (and are economically invisible), and just a couple decades ago 90+% of Chinese lived like this. One cannot bring about a transformation into an industrialized wealthy lifestyle overnight, but coming from the experience of the past decades, the Chinese have been remarkably effective in this, and the following decades will see these people lifted up to modern societal standards as well.
By this alone, one can conservatively expect a doubling of Chinese GDP, as there will be twice as many consumers and laborers who consume and work at the level of the current workforce.
This also means that China has a huge and high marginal utility domestic demand for goods, and even if sanctioned, they wont run of people to sell to.
When I visited China, the expats told me that recreational drug supplychains were strictly compartmentalized. There was the supply of illicit drugs for Westerners (imported by the sons of Nigerian businessmen, the cliche went), the supply of illicit drugs for Chinese people (who only dealt with Chinese people), and then there were the vast array of drugs that are completely legal to get over the counter in China without a prescription (at a pharmacy or CTM shop) that would be controlled substances in a US pharmacy.
That the official line from the CCP was that China had no drug problems, no prostitution, a variety of other things†, and that there were no gay people in China; That these were all Western ailments.
Urban China is a panopticon state not only digitally, but culturally. Housing is much tighter than the US, walls thinner. Your underwear is hung out to dry in clear view. "Privacy" in terms of politeness norms mostly consists of pretending you don't see or hear a thing. Neighbors generally know a lot about what each other are doing. 7% of the population are Party members, and in Marxist-Leninist systems this connotes something closer to earning a military officer commission; The Party is not trivial to apply to, the Party is strictly regimented, Party rules are held above and before the civil law, Party members are expected to be informers and have a strict lawful-good orientation from the perspective of the regime. Penalties for commerce in illicit drugs are even more extreme than the US, and due process is not bound by the same presumptions.
There are lots of factors conspiring against the sort of informal US inner city street drug distribution being as big of a deal in China.
Disclaimer: All my information is more than a decade out of date, and was only ever a thin slice of opinions from mostly Westerners in some first tier cities.
† From an academic paper: "2 The Six Evils are prostitution, drugs, selling women and children, pornography, gambling, and feudal superstition. Criminal gangs, or triads, are often counted as a seventh evil. These vices represent impediments to modernization and throwbacks to social problems that were present prior to the Communist takeover. Elevation of a problem to an "evil" symbolizes that the Beijing regime will mount a "campaign" or "struggle" against it."
> hat the official line from the CCP was that China had no drug problems, no prostitution, a variety of other things
Reminds me of a book I read years ago about the Soviet Union. Officially prostitution didn't exist there either, so there were no laws on the books about it. Enforcement usually was around various "antisocial" laws and usually for the street-walkers. Crime in general was mostly fine, so long as it wasn't a threat to the state, against well-connected people, or otherwise visible.
No wonder Russia got so bad after the strong state dissipated.
> The Party is not trivial to apply to, the Party is strictly regimented, Party rules are held above and before the civil law, Party members are expected to be informers and have a strict lawful-good orientation from the perspective of the regime.
If only... (source: am Chinese)
That's an interesting subject. Are there any books about it?
Once again, want to point out how this is simply American leadership not wanting to accept their loss and move on. For the first time in the history they're not being perceived as the "global leader", and that's not acceptable from their POV. Now it's just freaking out and hoping that some extreme policy changes will change the course. From my personal experience, most people act this way when they're in distress and can't think ahead because of all the externalities.
This isn't just ego. This is an impending existential issue.
America needs to increase manufacturing capacity if it wants to maintain hegemony and possibly world peace.
China will soon have the ability to take Taiwan and Korea and Japan. If that happens it's game over for any American interests and perhaps democracy as a whole.
Wargames[0] paint a grim picture of an upcoming conflict between China and America over Taiwan with the US barely winning at a great cost including the loss of many ships, aircraft, and the depletion of missile stocks.
The Chinese have a naval production of 260 times that of America and account for an ungodly amount of global steel production so they'll be able to bounce back faster than the US can. With a lead time for producing American missiles measured in months and years it will be just a matter of time before they take the countries in the region that are critical to American manufacturing if they're so inclined.
[0] https://selectcommitteeontheccp.house.gov/sites/evo-subsites...
Do you think that global hegemony by force is long-term (centuries) sustainable at all?
What makes you confident that this could ever work on a longer term? The US is only ~5% of people globally, and I would expect any industrial/technological lead to melt over the years unless there is a monumental, continuous difference in spending (like what the US military did since WW2).
But I see no indication that you can keep that situation stable over the long term, and I honestly think that attempts like the current tariff approach don't help one bit in the long run while having massive harmful side effects (price inflation, loss of planning stability/soft power/productivity).
10 replies →
That is not an existential issue; many former hegemons, such as the United Kingdom, continue to exist. Coalitions exist to ward off hegemons.
22 replies →
Genuinely, USA as of now is threat to both peace and democracy - both at home and abroad. Whether it manages to bring back manufacturing is irrelevant to that.
> America needs to increase manufacturing capacity if it wants to maintain hegemony and possibly world peace.
This argument is based on experiences in WWII, i.e. the previous war. You need to be cautious about basing military doctrine on the previous war. I’m not sure the next war will be won by churning out aircraft carriers.
1 reply →
I don't know why people keep thinking that China will attack Taiwan. It took HK and Macao without a shot. I think China is following Sun Tzu.
"subduing the enemy without fighting," is the epitome of strategic thinking in his book, The Art of War. This means achieving victory through cunning, deception, and maneuvering, rather than through direct confrontation and bloodshed"
They are increasing their military knowing that US military costs 4+x as much. It might be 4x better so don't fight. Just bankrupt the US. Trump wants a $1T military budget next year.
Why would China want to conquer the West? Buying what it wants is cheaper than an uncertain military battle fought with Nukes.
10 replies →
Hello slippery slope how are you doing?
> For the first time in the history
I'll charitably assume you meant first time in post-war history.
USA as "The Global leader" didn't emerge until after Europe was ravaged first by The Great War and then WWII.
No-one was looking toward the USA for leadership during The Great Game. Even by the time of the outbreak of WW1, the size of the USA's army was very small, half the size of the British army, which was itself considered small compared to the French and German armies.
US foreign policy was still inward looking, protectionist and isolationist until it could no longer ignore the case for war.
The foreign power projection really didn't kick into gear until 1945 onward and the determination not to let too much of the world fall to communist ideas.
I was a few drinks in on a sunny Tokyo day when I wrote it, my bad. But yeah, sorry, that’s what I meant. Basically since gaining the “leadership”, which you’re completely right about.
https://en.wikipedia.org/wiki/Extinction_(psychology)#Burst
Regarding the potential to annoy small businesses, it’s actually pretty easy to hire a firm to represent you in the EU. You’ll need a lawyer at some point anyway so it’s often the same firm.
If we had the same requirements here in the US it would likely become the same.
Delaware / Ohio corporations? I think those already exist for 'business friendly' incorporation states. Might also be Nevada and Texas, though I'm more speculating there or recalling singular offhand cases I heard about.
That is really the big problem with the current policy in the US: it's completely unclear what the policy is and how long it will last. This is not a stable climate for investment. Would you invest in a country where the president plays Russian roulette with the economy?
Most corporations will wait it out. Corporations that have an established interest (like Big Tech) will bribe Trump to get the exemptions they need to continue their business. Everybody else will have to decide how much they will want to depend on such an openly corrupt system. There industries that see no problem in dealing with corrupt regimes.
I think they conflated electricity production growth with total output.
Output in the US has been flat for some time, while China has been on a steady rate of climb for several decades.
> To sell in Europe, we must register for their tax system and nominate a legal representative.
American companies? Register for EU tax system?
I can buy from anyone in the US and worldwide for that matter, and as long as they're willing to figure out shipping they don't need to register anywhere, I can handle taxes myself when receiving.
What "AI" did they use to write this?
You can’t handle VAT rebates on your own, but America lacking a VAT system itself can’t really take advantage of that.
What VAT rebates if i import something into the EU?
It says "to sell into Europe" not "to buy from Europe". In first case I, the EU buyer, owe VAT.
In second case whoever buys may be owed a VAT rebate. But it's not selling any more.
1 reply →
> You can’t handle VAT rebates on your own
Individuals (sole traders, contractors etc) can claim VAT rebates. You don’t have to have a lawyer or an accountant if you’re prepared to figure out the rules yourself.
Tl;Dr: The author makes a strong case for broader, higher tariffs but understands it is impossible to help American manufacturing knowing that the next administration will cave to China and Wall-street and immediately move to undo everything. The solution is to work together to make American protectionism work.
1. They are not high enough: Correct. Raise them more.
2. America's industrial supply chain is weak: That is why we need to bring the factories and resource extraction home.
3. We don't know how to make it: Perhaps we can steal the IP like China? We will figure it out.
4. The effective cost of labor in the US is higher than is looks: Then raise the tariffs higher.
5. We don't have the infrastructure to manufacture: You have to build it first, This will get cheaper and easier as we continue to bring industry home.
6. Made in America will take time: Blaming permitting time and Bureaucracy is a ridiculous excuse. The federal government can override all state and local requirements here. Its a choice to slow projects down.
7. Uncertainty and Complexity around tariffs: Democrats will have a hard time undoing progress if there is movement to reshore industry. War over Taiwan seems basically inevitable and this will harden resolve.
8. Most Americans are going to hate manufacturing: Most (well a very large and non-negligible percent of) Americans are going to loose their jobs because of AI. Most of us hate our jobs already, manufacturing will pay better. There are always endless service industries...like delivering food, if they do not like supervising a robotics controlled factory. It is disingenuous to imagine a return of American manufacturing without Huge AI and robotics investments. More factories will be lights out than the alternative. The jobs will be in servicing the robots, computer systems and quality control. We aren't talking Rosie the Riveter and the author must know it.
9. The labor does not exist to make good products: This is why there must be some discrimination over tariffs and why they should not be a simple even percentage. We can choose to bring back GPU manufacturing but pass on fast fashion. And during the process of negotiation we can give up those industries we do not want in exchange for support of a China embargo.
10. Automation will not save us: The author cannot imagine a world where manufacturing is not motivated by global trade. They fail to understand that it does not matter how much more productive China is when protectionist policies prevent trade. The goal is to get America to a place where it can manufacture everything it NEEDS on its own.
11. Americans file lawsuits: Good- this will increase the quality of goods we enjoy and we can get past the disposable foreign garbage that floods our markets. 12. enforcement will be uneven and manipulated: so get on board and help to improve it, stop undermining the attempt to help this country.
13. tariff policies structured in wrong way: Really not a terrible idea to have a disparity in tariff between input goods and finished goods but it is a half measure. We need the entire supply chain from resource harvesting, to tooling, to components to final finished manufacturing if we want to ensure national security in a world post-NATO.
14. Michael Jordan sucked at baseball: Was there serious consequence to MJ trying his hand at baseball? We got through COVID. We have survived massive supply disruptions and the market has been pumping as hard as ever. If you are not currently retired it is absurd to worry about fluctuations in the stock market. And if you are, you likely invested in companies that sold out America.
> The goal is to get America to a place where it can manufacture everything it NEEDS on its own.
That is just incredibly stupid. The only country that tries to do this is the hellhole known as North Korea and even they fail. No country is an island and doing this will just ensure America becomes a third world country or worse