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Comment by seanmcdirmid

2 months ago

Low yields means their production can cost more than they sell it for, which is not sustainable. They have to have yields good enough that they can make money, otherwise the government is just subsidizing a give away, which is fine if they don’t export them but wouldn’t make sense if they do.

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seanmcdirmid

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alexgieg  2 months ago

Chinese planning revolves around mastering a technology no matter the cost, then monopolozing the global market no matter the cost, then bankrupting existing foreigner competitors or entirely preventing them from arising in the first place no matter the cost, to only then caring about costs and to start profiting from it all.

  • seanmcdirmid  2 months ago

    Chinese strategy of monopolizing markets via low prices is strange, it has no moat, they win simply because they provide the best value. I mean, its great for us, I’m all for it, but it doesn’t have an end game where they can actually ever set prices.

    • ethbr1  2 months ago

      They win because it leverages their strategic asset: a vast labor pool.

      Right now they're trying to avoid the other side of that coin (low value trap) by integrating vertically.

piva00  2 months ago

That's where capitalism-with-Chinese-characteristics comes into play, since the CCP knows it's a capacity they want to get some independence from the government creates incentives to develop it until it becomes self-sustainable.

They have a strategic goal which the government will support while at the same time letting competition do its thing, it's a step above from what other governments used to do with government-backed R&D that would eventually be developed by the private sector into products.

Not sure why other countries aren't adopting this model adapted to their own needs, seems very effective so far. Well, I'm not sure but have a big hunch it's the usual big business blocking it since it'd create more competition in a more level playing field.