Comment by mitthrowaway2

The part I don't get is, why shouldn't Western companies be able to out-compete the Chinese state at mass-producing cars?

My whole life, I only heard about how much better private companies are than governments at making products. How could we be suddenly behind?

OK, Xiaomi and BYD are state-backed private companies. But what advantage does the state-backing get them, exactly? How is it better than the familiar state-backed advantages western companies have (like regulatory capture, tax breaks, tariffs, or TBTF bailouts)?

The Chinese government can subsidize them. But that's just moving zero-sum money around; it might give them a boost in cars, but it must come at a cost to semiconductors, robotics, solar energy, raw materials, defense, or other things like that.... in theory at least? So why does it feel like they're somehow subsidizing every sector at the same time?