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This has little to do with China and innovation. The problem is mostly economical. China probably wants Chinese clones, clones that are incredibly valuable and

This has little to do with China and innovation. The problem is mostly economical. China probably wants Chinese clones, clones that are incredibly valuable and based in China. All the wealth generated therefrom stays in China. That's it, it's likely an economical manipulation. And frankly, from an economical standpoint, well-played. (Hope I don't get downvoted to hell!)

alexbeloi 9y ago
Not far from mercantilism: https://en.wikipedia.org/wiki/Mercantilism https://en.wikipedia.org/wiki/Mercantilism
andy_ppp 9y ago
I don’t understand the lack of reciprocal tariffs introduced by the US or are there some I don’t know of? This is probably the economic equivalent of banning say mobile phones or some other large and important sector.
- westiseast 9y ago
  I think a lot of people feel the same way and it somewhat feeds into the Trump phenomenon. For years the thinking has been that China is liberalizing, and it will eventually open up and that reciprocal sanctions or tariffs will spark unnecessary protectionism and encourage China to reverse direction. A lot of people now, after 20-30 years of similar behaviour, believe that China was just gaming the system all along and had no plans to liberalize politically or allow fair competition from foreign business. Trump certainly tapped into that (although I think there's some consensus that punitive tariffs still won't be useful).
  - logfromblammo 9y ago
    Punitive import tariffs don't work as punishment. They convert a portion of the consumer benefit from trade into taxes, a portion into domestic producer benefit from trade, and throw the rest away as deadweight loss. The foreign producer-exporter is barely even scratched. It's just an excuse to grab money from domestic consumers using another country as the scapegoat.
    - y4mi 9y ago
      every tax ever conceived is ultimately always paid by the consumer, yes. The point of such a tariff is however to increase the price of the foreign product, essentially giving local competitors a price advantage.
      - nyxtom 9y ago
        This doesn't work so well when your entire manufacturing industry explicitly relies on chinese production. Everything from debt to infrastructure has some dependency rooted in China. This is the whole point. Increase reliance on china for just about everything and it makes the idea of counter tariffs next to impossible.
      - logfromblammo 9y ago
        Inaccurate. Taxes are usually shared between consumers and their trade partners, and the relative burden on each is determined largely by price elasticities in the supply and demand curves. Generally speaking, the more sensitive consumers are to changes in price, the more the tax burden is shifted to suppliers. In the case of an import tariff, it is paid entirely by consumers, and domestic suppliers get a windfall from it, rather than sharing the burden. That's because there are two supply curves in play, domestic and international, and only one demand curve, because consumers generally don't care where the goods come from, and the internal trade of foreign markets is ignored.
  - dreamfactored 9y ago
    I think it's a case of wage normalisation. The salary and cost of living differentials between the West and Asia are narrowing incredibly fast. That's going to cause a lot of dissent amongst Western populations, particularly as those downward wage pressures are creating the kind of insecurities and job competition that the wild east is long accustomed to. The real consequence of fluid global trade is a global normalisation of living standards - you could say the first world is finally sharing and taking a hit in return for smartphones and cheap clothing.
dreamfactored 9y ago
The clone theory was correct while China was a low wage economy. But it has ceased to be the case quite recently (obviously the future is not evenly distributed, particularly in such a diverse and rapidly expanding economy - so you will still see copying for years to come but this doesn't represent the strategic direction). As I've pointed out elsewhere, China in fact has no option but to compete via design and innovation, just as the US, Japan, and Korea have done during their economic developments. 'Made in Japan' for example used to be the signifier of a cheap shitty knockoff - that seems extraordinary to most millennials today.

alexbeloi 9y ago

Not far from mercantilism: https://en.wikipedia.org/wiki/Mercantilism https://en.wikipedia.org/wiki/Mercantilism

andy_ppp 9y ago

I don’t understand the lack of reciprocal tariffs introduced by the US or are there some I don’t know of? This is probably the economic equivalent of banning say mobile phones or some other large and important sector.

westiseast 9y ago
I think a lot of people feel the same way and it somewhat feeds into the Trump phenomenon. For years the thinking has been that China is liberalizing, and it will eventually open up and that reciprocal sanctions or tariffs will spark unnecessary protectionism and encourage China to reverse direction. A lot of people now, after 20-30 years of similar behaviour, believe that China was just gaming the system all along and had no plans to liberalize politically or allow fair competition from foreign business. Trump certainly tapped into that (although I think there's some consensus that punitive tariffs still won't be useful).
- logfromblammo 9y ago
  Punitive import tariffs don't work as punishment. They convert a portion of the consumer benefit from trade into taxes, a portion into domestic producer benefit from trade, and throw the rest away as deadweight loss. The foreign producer-exporter is barely even scratched. It's just an excuse to grab money from domestic consumers using another country as the scapegoat.
  - y4mi 9y ago
    every tax ever conceived is ultimately always paid by the consumer, yes. The point of such a tariff is however to increase the price of the foreign product, essentially giving local competitors a price advantage.
    - nyxtom 9y ago
      This doesn't work so well when your entire manufacturing industry explicitly relies on chinese production. Everything from debt to infrastructure has some dependency rooted in China. This is the whole point. Increase reliance on china for just about everything and it makes the idea of counter tariffs next to impossible.
    - logfromblammo 9y ago
      Inaccurate. Taxes are usually shared between consumers and their trade partners, and the relative burden on each is determined largely by price elasticities in the supply and demand curves. Generally speaking, the more sensitive consumers are to changes in price, the more the tax burden is shifted to suppliers. In the case of an import tariff, it is paid entirely by consumers, and domestic suppliers get a windfall from it, rather than sharing the burden. That's because there are two supply curves in play, domestic and international, and only one demand curve, because consumers generally don't care where the goods come from, and the internal trade of foreign markets is ignored.
- dreamfactored 9y ago
  I think it's a case of wage normalisation. The salary and cost of living differentials between the West and Asia are narrowing incredibly fast. That's going to cause a lot of dissent amongst Western populations, particularly as those downward wage pressures are creating the kind of insecurities and job competition that the wild east is long accustomed to. The real consequence of fluid global trade is a global normalisation of living standards - you could say the first world is finally sharing and taking a hit in return for smartphones and cheap clothing.

dreamfactored 9y ago

The clone theory was correct while China was a low wage economy. But it has ceased to be the case quite recently (obviously the future is not evenly distributed, particularly in such a diverse and rapidly expanding economy - so you will still see copying for years to come but this doesn't represent the strategic direction). As I've pointed out elsewhere, China in fact has no option but to compete via design and innovation, just as the US, Japan, and Korea have done during their economic developments. 'Made in Japan' for example used to be the signifier of a cheap shitty knockoff - that seems extraordinary to most millennials today.