9 ms·

It's amazing watching the Chinese Communist Party systematically target, succeed in, and gain dominance in these industries -- industries that any idiot can see

It's amazing watching the Chinese Communist Party systematically target, succeed in, and gain dominance in these industries -- industries that any idiot can see are going to be critical to the global economy within a couple of decades max. Meanwhile trillions of investment dollars available in the US are busy chasing Juiceros.

bluGill 7y ago
That is also the problem with Command economies: they do really well with some things the central planners see as useful, but miss tons of little things that are important but the central planners don't have time to think about. Juiceros is in fact an upside of not having a central plan: we are willing to try things of questionable benefit to see if they are really good even though they look stupid.
- rb808 7y ago
  Agreed - also the central planners products aren't that great, I'd dispute that China dominates anything except manufacturing. Juiceros are made in China and there are very few Chinese cars exported.
  - bluGill 7y ago
    Taiwan and Japan held the standard for the place to manufacture cheap junk 30 years ago. They dominated that market, but nobody expected good engineering. However as their country got richer they developed a reputation for better by doing. It takes time to develop engineering expertise, but China has some great engineers who are able to teach the younger generation thus building up a system of being great. I don't know if China is leveraging this internally, but that is lack of personal knowledge. I believe they are going to transform to be another place to get quality products in 20 years. My guess is India will mostly skip the cheap junk phase of manufacturing: we have been developing their engineering expertise more then their manufacturing.
    - oblio 7y ago
      It's hard to predict anything, but India, in my eyes, seems headed to a mix of manufacturing (smaller percentage) and services (much larger percentage). I see India leveraging its democracy and relative openness plus its large English speaking population to achieve this.
    - seanmcdirmid 7y ago
      There are two Indias: a middle class educated one that is already heavily into services, and a poorer less educated India that would have benefited more from lower skilled but still better paying than farm work manufacturing jobs. Right now, India is developing the former but not the latter, which is going to be huge problem down the line.
- deleted 7y ago
  [deleted]
- chvid 7y ago
  If you go back in the history of major car companies you will see plenty of government intervention. For China this is a part of a broader strategy to become less dependent on (imported) fossil fuels.
  - chvid 7y ago
    PS: If you wander around a Chinese city you will see plenty of products sold which seem more silly than a Juicero.
    - magduf 7y ago
      They probably didn't involve a huge amount of VC investment though.
      - AstralStorm 7y ago
        Indeed. These products need no R&D really and I consider VC funding them a variant scam, except with private funds. However, try to VC say a factory manufacturing metal parts or plastics, nobody will say yes... Heck, try making actual cars or even golf carts on VC money. VC funders are either interested in something completely not speculative and small (eg. EU VC scene) or total moonshots in badly understood markets where no actual R&D is required. If the thing is very speculative research, most VC aren't interested.
  - astazangasta 7y ago
    The idea of a clean separation between a "command economy" and whatever we have is a myth. The US obviously had a national strategy to encourage the growth of its auto industry, like building a national highway system. Similarly for semiconductor manufacturing, aerospace, oil and gas, etc. If you are spending $1.5 trillion a year in a $16 trillion economy you have a lot to say about its structure.
- sfifs 7y ago
  What makes you think China is a "Command" economy? USSR was a command economy. In China the Government funnels money into areas that are its priority but much of the economy runs on private innovation & fairly intense competition, especially the tech and software economy.
  - mensetmanusman 7y ago
    It has a large % that is command based. Evidence is in scrambling municipalities when their investments are dictated and end up going bad anyway. (Or they prop up performance numbers to not catch anyones attention, this is leading to massive shadow-banking activity).
  - newnewpdro 7y ago
    Maybe the article being discussed? "The towns are typical of China’s command-led approach to its economy."
ptah 7y ago
five year plan works better than a quarterly plan for some cases
dmix 7y ago
The US does all the innovation and R&D then China's manufacturing juggernauts do the building. This is an old pattern that's just getting more efficient and China's able to sell to it's own markets. Freeing up more human and financial capital for China to do their own R&D/entrepreneurship.
- StreamBright 7y ago
  China does R&D nowadays too. https://www.theguardian.com/business/economics-blog/2014/nov/12/china-surpass-united-states-r-and-d-spending-role-west https://www.theguardian.com/business/economics-blog/2014/nov...
  - dmix 7y ago
    Yep my comment mentions that.
- jbay808 7y ago
  How do people expect to maintain an advantage in design and engineering when they have outsourced production? Where are the younger generations going to learn the things they don't teach you in university? Isn't it a huge advantage for a designer when you are the one getting your prototypes from the factory down the street?
  - dmix 7y ago
    The issue is more about why not than why they should. The biggest reasons are the loss of domestic experience curves [1] to other countries when we shifted to a service based economy. The second is the hyper politicized process of even creating a factory, let alone operating one, even when you have the direct backing of the executive branch [2]. The other one (allegedly) is the idea that the local labor workforce won't want to do any of the hard/dirty jobs or can't do them cost effectively, often because 1 and 2 but other reasons. So there are higher initial costs for automation. But otherwise there are plenty of good reasons to operate production domestically once the technical and political environment supports such a thing. Which might happen in the future, although few mainstream parties seem to actually want that to happen without their idealized or prior worldview being appeased. [1] https://en.wikipedia.org/wiki/Experience_curve_effects https://en.wikipedia.org/wiki/Experience_curve_effects [2] https://www.bloomberg.com/news/features/2019-02-06/inside-wisconsin-s-disastrous-4-5-billion-deal-with-foxconn https://www.bloomberg.com/news/features/2019-02-06/inside-wi...
deleted 7y ago
[deleted]
sametmax 7y ago
It helps to be a dictatorship that can force anybody to do what they want, and send to camp people that don't. It also helps to have millions of cheap workers, and a gigantic, rich, soil. And it's easier if you not care about destroying everything in your way. Still. It's impressive for exactly the same reasons. It's hard to foster an intellectual elite in a dictatorship, to maintain motivation and cooperation across a gigantic country and 1.7B of people. Beside, we did the same: polluting, forcing population to work, etc, only 100 years before, but we attacked other countries while doing so. Which China haven't. And about this pollution thing, they seem to correct trajectory faster than we did, given their timeframe and inertia. It's amazing to watch.
- Cthulhu_ 7y ago
  > It helps to be a dictatorship that can force anybody to do what they want, and send to camp people that don't. It also helps to have millions of cheap workers, and a gigantic, rich, soil. And it's easier if you not care about destroying everything in your way. Is this about China or the US? I mean it's got prison / slave labor, cheap workers (minimum wage, what's that?), huge lands, etc. Don't think the US moved away from those practices a hundred years ago, they're still doing it, they're just calling it differently and it's coming from financial interests now instead of political ones (e.g. private prisons that make sure to keep their cells (over) full and their cheap labor supply up)
  - _iyig 7y ago
    EDIT: Seems I got baited. Removing my comment to bring things back on topic.
    - tntn 7y ago
      > lock up millions of people for purely ideological reasons No, just for being black.
    - otaviokz 7y ago
      It has the largest inmate population in the world, in total number, not %. Can you imagine if China locked up the same % of it's population?
StreamBright 7y ago
Europe is not much better. Key industries (for example Volvo) are sold to Chinese and lots of fake Chinese products are flooding the European markets (for example jams, honey). It would be trivial to fix these if the EU cared. They are busy chasing brexit and other very important things.
- raxxorrax 7y ago
  internet surveillance is one of their favorite things. After the critical success of article 13, they now plan to give foreign government agencies access to domestic corporate data. At this rate, we will arrive at a point were Brexiteers were correct on most important developments.
  - pjc50 7y ago
    > now plan to give foreign government agencies access to domestic corporate data. What does this refer to? The EU has generally been strong on privacy protection.
    - raxxorrax 7y ago
      https://www.ft.com/content/63a6105a-fa24-11e8-af46-2022a0b02a6c https://www.ft.com/content/63a6105a-fa24-11e8-af46-2022a0b02... This potentially could reduce privacy protection to the lowest standards of any member state. Terrorism and cyber crime are negligible threats to the EU. It has more of an existential crisis. These kind of laws that have invigorated us the last decades are going to be extended further. Because we seem to be governed by pathologically fearful, demented old... Additionally, the US will be involved for similar sharing of data in the future. Sorry for the rant, but it is what it is. Without any accountability whatsoever.
raxxorrax 7y ago
Just bad for the whole city if the strategy fails. And there is a single point of failure. What if someone acknowledges that battery powered cars cannot reach the utility of fossil cars or trucks even? What if somebody invents a safe hydrogen cell?
- jbay808 7y ago
  Is there something wrong with betting based on a calculated risk? VCs do it all the time, why can't a government do it?
  - raxxorrax 7y ago
    VCs are able to swallow the result of a failure. The government probably can too, but not the city itself. Not saying this strategy is bad, but it will inevitably end up like deserted coal cities if the industry is too mono-cultural.
nathan_long 7y ago
A dictatorship is just more extreme than a democracy because the whole society moves in sync by necessity - they do or die. Whether it's a smart industrial move or a dumb one, a benevolent program or a genocidal one, if the leaders call for it, it gets done. No single decision should be taken as proof that dictatorship is good.
Cthulhu_ 7y ago
Oh but the US has been doing the same, just in the military branch instead of technology. They also bailed out the car industry after the 2008 crisis.
adventured 7y ago
> Meanwhile trillions of investment dollars available in the US are busy chasing Juiceros. Amusing attempt. For one example, Silicon Valley is embarrassing most of the rest of the world when it comes to artificial intelligence and autonomous tech. China is at least five years behind on autonomous, by their own admission - which is why all of their tech giants had to set up shop in SV to work on autonomous. "The talent needed to give Chinese startups an edge in autonomous vehicles can’t be found in Beijing or Shanghai." https://www.bloomberg.com/news/articles/2018-09-24/to-find-china-s-best-driverless-technology-look-in-silicon-valley https://www.bloomberg.com/news/articles/2018-09-24/to-find-c... https://www.reuters.com/article/us-tencent-holdings-autonomous/chinas-tencent-builds-self-driving-car-team-in-silicon-valley-idUSKCN1NB2OU https://www.reuters.com/article/us-tencent-holdings-autonomo...
natechols 7y ago
Juicero went out of business quickly. The same tends not to happen to "strategic" state-owned enterprises that don't pull their weight.
ssnistfajen 7y ago
Planned economy works until they don't. For one it can only react to trends after they emerge by playing catch-up, instead of birthing run-away successes out of nowhere. I am against a completely unregulated free market in principle but that doesn't mean having to follow state-directed planning to the exact step.
- matthewdgreen 7y ago
  It's hard to look at the US's current minimal investment in renewable technologies as a rational response to current trends. It's obvious to anyone who pays attention to the science that electric transportation and renewables is going to be a huge business in the future. If our markets don't plan on a large enough time horizon, that's a huge disadvantage for our system.
rasz 7y ago
"National IC Investment Fund (called the "Big Fund") will mainly focus on three key sectors in the coming years, including memory, SiC/GaN compound semiconductor, and IC design with its application in IoT, 5G, AI, smart vehicles, etc." ~$75 billion by 2017 https://press.trendforce.com/node/view/3025.html https://press.trendforce.com/node/view/3025.html

bluGill 7y ago

That is also the problem with Command economies: they do really well with some things the central planners see as useful, but miss tons of little things that are important but the central planners don't have time to think about. Juiceros is in fact an upside of not having a central plan: we are willing to try things of questionable benefit to see if they are really good even though they look stupid.

rb808 7y ago
Agreed - also the central planners products aren't that great, I'd dispute that China dominates anything except manufacturing. Juiceros are made in China and there are very few Chinese cars exported.
- bluGill 7y ago
  Taiwan and Japan held the standard for the place to manufacture cheap junk 30 years ago. They dominated that market, but nobody expected good engineering. However as their country got richer they developed a reputation for better by doing. It takes time to develop engineering expertise, but China has some great engineers who are able to teach the younger generation thus building up a system of being great. I don't know if China is leveraging this internally, but that is lack of personal knowledge. I believe they are going to transform to be another place to get quality products in 20 years. My guess is India will mostly skip the cheap junk phase of manufacturing: we have been developing their engineering expertise more then their manufacturing.
  - oblio 7y ago
    It's hard to predict anything, but India, in my eyes, seems headed to a mix of manufacturing (smaller percentage) and services (much larger percentage). I see India leveraging its democracy and relative openness plus its large English speaking population to achieve this.
  - seanmcdirmid 7y ago
    There are two Indias: a middle class educated one that is already heavily into services, and a poorer less educated India that would have benefited more from lower skilled but still better paying than farm work manufacturing jobs. Right now, India is developing the former but not the latter, which is going to be huge problem down the line.
deleted 7y ago
[deleted]
chvid 7y ago
If you go back in the history of major car companies you will see plenty of government intervention. For China this is a part of a broader strategy to become less dependent on (imported) fossil fuels.
- chvid 7y ago
  PS: If you wander around a Chinese city you will see plenty of products sold which seem more silly than a Juicero.
  - magduf 7y ago
    They probably didn't involve a huge amount of VC investment though.
    - AstralStorm 7y ago
      Indeed. These products need no R&D really and I consider VC funding them a variant scam, except with private funds. However, try to VC say a factory manufacturing metal parts or plastics, nobody will say yes... Heck, try making actual cars or even golf carts on VC money. VC funders are either interested in something completely not speculative and small (eg. EU VC scene) or total moonshots in badly understood markets where no actual R&D is required. If the thing is very speculative research, most VC aren't interested.
- astazangasta 7y ago
  The idea of a clean separation between a "command economy" and whatever we have is a myth. The US obviously had a national strategy to encourage the growth of its auto industry, like building a national highway system. Similarly for semiconductor manufacturing, aerospace, oil and gas, etc. If you are spending $1.5 trillion a year in a $16 trillion economy you have a lot to say about its structure.
sfifs 7y ago
What makes you think China is a "Command" economy? USSR was a command economy. In China the Government funnels money into areas that are its priority but much of the economy runs on private innovation & fairly intense competition, especially the tech and software economy.
- mensetmanusman 7y ago
  It has a large % that is command based. Evidence is in scrambling municipalities when their investments are dictated and end up going bad anyway. (Or they prop up performance numbers to not catch anyones attention, this is leading to massive shadow-banking activity).
- newnewpdro 7y ago
  Maybe the article being discussed? "The towns are typical of China’s command-led approach to its economy."

ptah 7y ago

five year plan works better than a quarterly plan for some cases

dmix 7y ago

The US does all the innovation and R&D then China's manufacturing juggernauts do the building. This is an old pattern that's just getting more efficient and China's able to sell to it's own markets. Freeing up more human and financial capital for China to do their own R&D/entrepreneurship.

StreamBright 7y ago
China does R&D nowadays too. https://www.theguardian.com/business/economics-blog/2014/nov/12/china-surpass-united-states-r-and-d-spending-role-west https://www.theguardian.com/business/economics-blog/2014/nov...
- dmix 7y ago
  Yep my comment mentions that.
jbay808 7y ago
How do people expect to maintain an advantage in design and engineering when they have outsourced production? Where are the younger generations going to learn the things they don't teach you in university? Isn't it a huge advantage for a designer when you are the one getting your prototypes from the factory down the street?
- dmix 7y ago
  The issue is more about why not than why they should. The biggest reasons are the loss of domestic experience curves [1] to other countries when we shifted to a service based economy. The second is the hyper politicized process of even creating a factory, let alone operating one, even when you have the direct backing of the executive branch [2]. The other one (allegedly) is the idea that the local labor workforce won't want to do any of the hard/dirty jobs or can't do them cost effectively, often because 1 and 2 but other reasons. So there are higher initial costs for automation. But otherwise there are plenty of good reasons to operate production domestically once the technical and political environment supports such a thing. Which might happen in the future, although few mainstream parties seem to actually want that to happen without their idealized or prior worldview being appeased. [1] https://en.wikipedia.org/wiki/Experience_curve_effects https://en.wikipedia.org/wiki/Experience_curve_effects [2] https://www.bloomberg.com/news/features/2019-02-06/inside-wisconsin-s-disastrous-4-5-billion-deal-with-foxconn https://www.bloomberg.com/news/features/2019-02-06/inside-wi...

deleted 7y ago

[deleted]

sametmax 7y ago

It helps to be a dictatorship that can force anybody to do what they want, and send to camp people that don't. It also helps to have millions of cheap workers, and a gigantic, rich, soil. And it's easier if you not care about destroying everything in your way. Still. It's impressive for exactly the same reasons. It's hard to foster an intellectual elite in a dictatorship, to maintain motivation and cooperation across a gigantic country and 1.7B of people. Beside, we did the same: polluting, forcing population to work, etc, only 100 years before, but we attacked other countries while doing so. Which China haven't. And about this pollution thing, they seem to correct trajectory faster than we did, given their timeframe and inertia. It's amazing to watch.

Cthulhu_ 7y ago
> It helps to be a dictatorship that can force anybody to do what they want, and send to camp people that don't. It also helps to have millions of cheap workers, and a gigantic, rich, soil. And it's easier if you not care about destroying everything in your way. Is this about China or the US? I mean it's got prison / slave labor, cheap workers (minimum wage, what's that?), huge lands, etc. Don't think the US moved away from those practices a hundred years ago, they're still doing it, they're just calling it differently and it's coming from financial interests now instead of political ones (e.g. private prisons that make sure to keep their cells (over) full and their cheap labor supply up)
- _iyig 7y ago
  EDIT: Seems I got baited. Removing my comment to bring things back on topic.
  - tntn 7y ago
    > lock up millions of people for purely ideological reasons No, just for being black.
  - otaviokz 7y ago
    It has the largest inmate population in the world, in total number, not %. Can you imagine if China locked up the same % of it's population?

StreamBright 7y ago

Europe is not much better. Key industries (for example Volvo) are sold to Chinese and lots of fake Chinese products are flooding the European markets (for example jams, honey). It would be trivial to fix these if the EU cared. They are busy chasing brexit and other very important things.

raxxorrax 7y ago
internet surveillance is one of their favorite things. After the critical success of article 13, they now plan to give foreign government agencies access to domestic corporate data. At this rate, we will arrive at a point were Brexiteers were correct on most important developments.
- pjc50 7y ago
  > now plan to give foreign government agencies access to domestic corporate data. What does this refer to? The EU has generally been strong on privacy protection.
  - raxxorrax 7y ago
    https://www.ft.com/content/63a6105a-fa24-11e8-af46-2022a0b02a6c https://www.ft.com/content/63a6105a-fa24-11e8-af46-2022a0b02... This potentially could reduce privacy protection to the lowest standards of any member state. Terrorism and cyber crime are negligible threats to the EU. It has more of an existential crisis. These kind of laws that have invigorated us the last decades are going to be extended further. Because we seem to be governed by pathologically fearful, demented old... Additionally, the US will be involved for similar sharing of data in the future. Sorry for the rant, but it is what it is. Without any accountability whatsoever.

raxxorrax 7y ago

Just bad for the whole city if the strategy fails. And there is a single point of failure. What if someone acknowledges that battery powered cars cannot reach the utility of fossil cars or trucks even? What if somebody invents a safe hydrogen cell?

jbay808 7y ago
Is there something wrong with betting based on a calculated risk? VCs do it all the time, why can't a government do it?
- raxxorrax 7y ago
  VCs are able to swallow the result of a failure. The government probably can too, but not the city itself. Not saying this strategy is bad, but it will inevitably end up like deserted coal cities if the industry is too mono-cultural.

nathan_long 7y ago

A dictatorship is just more extreme than a democracy because the whole society moves in sync by necessity - they do or die. Whether it's a smart industrial move or a dumb one, a benevolent program or a genocidal one, if the leaders call for it, it gets done. No single decision should be taken as proof that dictatorship is good.

Cthulhu_ 7y ago

Oh but the US has been doing the same, just in the military branch instead of technology. They also bailed out the car industry after the 2008 crisis.

adventured 7y ago

> Meanwhile trillions of investment dollars available in the US are busy chasing Juiceros. Amusing attempt. For one example, Silicon Valley is embarrassing most of the rest of the world when it comes to artificial intelligence and autonomous tech. China is at least five years behind on autonomous, by their own admission - which is why all of their tech giants had to set up shop in SV to work on autonomous. "The talent needed to give Chinese startups an edge in autonomous vehicles can’t be found in Beijing or Shanghai." https://www.bloomberg.com/news/articles/2018-09-24/to-find-china-s-best-driverless-technology-look-in-silicon-valley https://www.bloomberg.com/news/articles/2018-09-24/to-find-c... https://www.reuters.com/article/us-tencent-holdings-autonomous/chinas-tencent-builds-self-driving-car-team-in-silicon-valley-idUSKCN1NB2OU https://www.reuters.com/article/us-tencent-holdings-autonomo...

natechols 7y ago

Juicero went out of business quickly. The same tends not to happen to "strategic" state-owned enterprises that don't pull their weight.

ssnistfajen 7y ago

Planned economy works until they don't. For one it can only react to trends after they emerge by playing catch-up, instead of birthing run-away successes out of nowhere. I am against a completely unregulated free market in principle but that doesn't mean having to follow state-directed planning to the exact step.

matthewdgreen 7y ago
It's hard to look at the US's current minimal investment in renewable technologies as a rational response to current trends. It's obvious to anyone who pays attention to the science that electric transportation and renewables is going to be a huge business in the future. If our markets don't plan on a large enough time horizon, that's a huge disadvantage for our system.

rasz 7y ago

"National IC Investment Fund (called the "Big Fund") will mainly focus on three key sectors in the coming years, including memory, SiC/GaN compound semiconductor, and IC design with its application in IoT, 5G, AI, smart vehicles, etc." ~$75 billion by 2017 https://press.trendforce.com/node/view/3025.html https://press.trendforce.com/node/view/3025.html