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Honest question: How is this not basically a subsidy for the electronics sector? The news I'm hearing from the US all the time is how China, for example, is su

Honest question: How is this not basically a subsidy for the electronics sector? The news I'm hearing from the US all the time is how China, for example, is subsidizing it's production sector and that that creates unfair market competition. From Harvard Business Review, for example: "[...] its overarching policy of aggressively subsidizing targeted industries in order to dominate global markets" and "Government subsidies to produce technologically advanced products and undercut foreign manufacturers have buttressed China’s trade prowess" [1] The same can be said for the other technologies that were first financed by the government and then taken over by the private sector [2] [1] https://hbr.org/2013/04/how-chinese-subsidies-changed https://hbr.org/2013/04/how-chinese-subsidies-changed [2] https://www.youtube.com/watch?v=fUHrYJW-6MI https://www.youtube.com/watch?v=fUHrYJW-6MI

ggg9990 8y ago
It is. If we can’t stop China from subsidizing their tech we should subsidize our own.
- molteanu 8y ago
  Ok, so I'm not just imagining stuff. Thanks for the reply.
- pravda 8y ago
  The United States does plenty of subsidizing, through the "Pentagon System". https://www.youtube.com/watch?v=VSJjlaggbK0 https://www.youtube.com/watch?v=VSJjlaggbK0 http://www.thirdworldtraveler.com/Chomsky/PentagonSystem_Chom.html http://www.thirdworldtraveler.com/Chomsky/PentagonSystem_Cho...
- Matticus_Rex 8y ago
  That doesn't follow.
azinman2 8y ago
This is research. It's not directly subsidizing companies who want to build factories and products immediately.
- AndrewUnmuted 8y ago
  Nonetheless, research can be just as pricey. This is a subsidy.
  - azinman2 8y ago
    Not in the same sense, because none of it might pan out. It’s literally research grants, which might be called a subsidy because it’s for the common good, but it’s not about building expensive industries at a cheaper private cost. This is $1.5B. That’s nothing compared to what it costs to build a semi-conductor industry.
- ruskerdax 8y ago
  Right, it's less directly subsidizing companies who then use the advantages gained through those subsidies to build factories and products at a comparatively reduced cost. It's subsidy with extra steps.
zaphirplane 8y ago
I feel you are conflating two things intentions, one is a Government encouraging/forcing companies to make something (emission control/eu privacy laws/lower taxes on electric cars/develop a stealth paint) for the good of the country, with a country helping local companies achieve global dominance by funding them thru years of losses (who collects the profits when it succeeds?) Both have government money going to a company, both involve the good of the country. Idk one is to incentivise companies to make something you need, the other is to establish local capabilities that is self sustaining in the future. I guess some agricultural industries fall into that category in western countries

ggg9990 8y ago

It is. If we can’t stop China from subsidizing their tech we should subsidize our own.

molteanu 8y ago
Ok, so I'm not just imagining stuff. Thanks for the reply.
pravda 8y ago
The United States does plenty of subsidizing, through the "Pentagon System". https://www.youtube.com/watch?v=VSJjlaggbK0 https://www.youtube.com/watch?v=VSJjlaggbK0 http://www.thirdworldtraveler.com/Chomsky/PentagonSystem_Chom.html http://www.thirdworldtraveler.com/Chomsky/PentagonSystem_Cho...
Matticus_Rex 8y ago
That doesn't follow.

azinman2 8y ago

This is research. It's not directly subsidizing companies who want to build factories and products immediately.

AndrewUnmuted 8y ago
Nonetheless, research can be just as pricey. This is a subsidy.
- azinman2 8y ago
  Not in the same sense, because none of it might pan out. It’s literally research grants, which might be called a subsidy because it’s for the common good, but it’s not about building expensive industries at a cheaper private cost. This is $1.5B. That’s nothing compared to what it costs to build a semi-conductor industry.
ruskerdax 8y ago
Right, it's less directly subsidizing companies who then use the advantages gained through those subsidies to build factories and products at a comparatively reduced cost. It's subsidy with extra steps.

zaphirplane 8y ago

I feel you are conflating two things intentions, one is a Government encouraging/forcing companies to make something (emission control/eu privacy laws/lower taxes on electric cars/develop a stealth paint) for the good of the country, with a country helping local companies achieve global dominance by funding them thru years of losses (who collects the profits when it succeeds?) Both have government money going to a company, both involve the good of the country. Idk one is to incentivise companies to make something you need, the other is to establish local capabilities that is self sustaining in the future. I guess some agricultural industries fall into that category in western countries