5 ms·

Are you saying that the Chinese government is subsidizing the entire semiconductor industry to drive US companies out of business?

AnthonyMouse 6y ago
Are you saying that the Chinese government is not subsidizing the entire semiconductor industry in China to drive companies outside of China out of business? They have a documented history of doing this in multiple industries over the course of many years. Notice how substantially all of the consumer electronics devices that used to be made in the US or Japan or Korea or Germany are now made in China.
- scott_codie 6y ago
  That would be great if they were as it would make Chinese silicon cheaper for the US since they are trading partners.
  - AnthonyMouse 6y ago
    Review the part where they only do this until the competitors are out of business. It's called predatory pricing and is an antitrust violation when companies do it.
- FooBarWidget 6y ago
  I'd like to see this documented history. You mentioned electronics, but have they raised prices?
  - AnthonyMouse 6y ago
    The trend in electronics prices is to decline over time, so you get the same result by not reducing prices as much as the ongoing reductions in cost. Check how much a piece of consumer electronics costs in China vs. the US. They could charge the same amount.
    - FooBarWidget 6y ago
      Are you saying that western electronics companies could theoretically produce at a price lower than what Chinese companies charge today, if only those western companies didn't get killed off? Proof?
    - CyanBird 6y ago
      > They could charge the same amount. Go tell apple this, they would be very happy to be able to be able to charge even more for what they produce from China, they would be quite pissed to know that someone along the production chain is making too much money where it could be them instead The only difference between let's say Xiaomi or US located electronics is that the US ones are very, very happy to pricegauge the hell out of their customers, that's why so many are happy to buy in alibaba rather than let's say Amazon or eBay
  - ycombinete 6y ago
    They’ve done it in the security industry. Look at Hikvision for an example, who have recieved billions of USD in direct loans, and even more billions of USD in credit from the Chinese government.
    - FooBarWidget 6y ago
      Loans... credit... meaning that they have to pay it back some day. How is this different from any other company in any other country lending money to grow? The original claim was an unlimited pumping of state money, which never has to be paid back, with the purpose of killing the competition. And now that HKVision has 'won', have they raised prices and are they extorting the market, as the original claim said?
- FooBarWidget 6y ago
  There's a big difference between receiving an amount of government subsidy, and the government funding almost everything with nearly no budget limits. The former is definitely true, though China is not the only country engaging in such a practice. The latter claim needs sources to back up. If you look at the Chinese chip industry, then you see that a lot of money comes from the private sector. Huawei, Xiaomi, etc are investing a ton of money in semiconductor companies. SMIC got a lot of funds through a stock market IPO. Clearly it's not all government money. There's also a big difference between investing in an industry with the goal of dominating the world and eliminating competition, vs the goal of becoming a sovereign equal. Why is it necessarily the former, and not the latter? The reason why the Chinese government invests in many sectors, is because they want to be independent instead of being at the mercy of foreign sanctions. If it weren't for that, they'd happily buy from foreign suppliers because that's cheaper than developing the technology themselves. There is another documented history: that of the US sanctioning China, preventing China from accessing all sorts of western technology. For example, the US denied China of space technology. So now, China has wholly self-developed space technology. China isn't selling space technology below production costs to kill competitors. China invested in this sector in order to safeguard their access to space. https://www.businessinsider.com/nasa-china-collaboration-illegal-2015-10 https://www.businessinsider.com/nasa-china-collaboration-ill... The US forced TSMC to not supply to many Chinese companies, and TSMC isn't even a US company. The US is trying to kill the Chinese semiconductor industry, making it wholly reliant on foreign suppliers. For years, Chinese companies have bought from foreign semiconductor suppliers because those are better. But the US has now turned this matter into an existential crisis, a matter of survival. Is it then any wonder that China, both public and private actors, are now pouring billions into the domestic semiconductor industry?
  - fock 6y ago
    > If you look at the Chinese chip industry, then you see that a lot of money comes from the private sector. Huawei, Xiaomi, etc are investing a ton of money in semiconductor companies. A private sector which got so successful not least because government systematically robbed IP from competitors (Nortel...). Yes, western politics also messed this up, but no these are not "private" sector operations in the same way Tesla is.
- deleted 6y ago
  [deleted]
- flamble 6y ago
  The offshoring of the production of consumer electronics devices is mostly the result of the free-trade policies of said countries, coupled with market forces. The growth centred around manufacturing has been the basis of Chinese prosperity and requires no speculating about devious motives to account for. As for the Chinese government's massive spending and subsidization of key industries, it's largely due to being free of the particular ideological constraints which force the US government to entrust everything to the market (except the military industry) which has predictably led to brittleness and vulnerability. The American approach does resemble the Chinese one in a sense. Whereas the Chinese government prefers to directly subsidize e.g. semiconductors, the US government pours unfathomable quantities of capital into a military capable of dissuading any country from capitalizing on the US's dependency on any of their industries. When this approach breaks down, as in the case of China, things tend to get very dicey.
  - AnthonyMouse 6y ago
    > The offshoring of the production of consumer electronics devices is mostly the result of the free-trade policies of said countries, coupled with market forces. This fails to explain why everything moved to China and not Mexico or Brazil or India. > As for the Chinese government's massive spending and subsidization of key industries, it's largely due to being free of the particular ideological constraints which force the US government to entrust everything to the market (except the military industry) which has predictably led to brittleness and vulnerability. Entrusting everything to the market works great when it's a level playing field. When a country is doing things that would be an antitrust violation if done by a company, that requires another country to stop them. Typically through the use of trade sanctions, i.e. tariffs. > The American approach does resemble the Chinese one in a sense. Whereas the Chinese government prefers to directly subsidize e.g. semiconductors, the US government pours unfathomable quantities of capital into a military capable of dissuading any country from capitalizing on the US's dependency on any of their industries. In other words it's completely different?
    - flamble 6y ago
      I understand now. Unfettered market freedom is the best way to organize things and at the same time, large-scale government intervention is an unfair competitive advantage. > This fails to explain why everything moved to China and not Mexico or Brazil or India. Of course, no industries moved from the US to Mexico, Brazil or India over the same period as China's rise. > In other words it's completely different? Yes, in the sense that a portion of massive Chinese government spending goes directly into producing things that people need, and almost all of massive US government spending goes into funding imperialist violence.

AnthonyMouse 6y ago

Are you saying that the Chinese government is not subsidizing the entire semiconductor industry in China to drive companies outside of China out of business? They have a documented history of doing this in multiple industries over the course of many years. Notice how substantially all of the consumer electronics devices that used to be made in the US or Japan or Korea or Germany are now made in China.

scott_codie 6y ago
That would be great if they were as it would make Chinese silicon cheaper for the US since they are trading partners.
- AnthonyMouse 6y ago
  Review the part where they only do this until the competitors are out of business. It's called predatory pricing and is an antitrust violation when companies do it.
FooBarWidget 6y ago
I'd like to see this documented history. You mentioned electronics, but have they raised prices?
- AnthonyMouse 6y ago
  The trend in electronics prices is to decline over time, so you get the same result by not reducing prices as much as the ongoing reductions in cost. Check how much a piece of consumer electronics costs in China vs. the US. They could charge the same amount.
  - FooBarWidget 6y ago
    Are you saying that western electronics companies could theoretically produce at a price lower than what Chinese companies charge today, if only those western companies didn't get killed off? Proof?
  - CyanBird 6y ago
    > They could charge the same amount. Go tell apple this, they would be very happy to be able to be able to charge even more for what they produce from China, they would be quite pissed to know that someone along the production chain is making too much money where it could be them instead The only difference between let's say Xiaomi or US located electronics is that the US ones are very, very happy to pricegauge the hell out of their customers, that's why so many are happy to buy in alibaba rather than let's say Amazon or eBay
- ycombinete 6y ago
  They’ve done it in the security industry. Look at Hikvision for an example, who have recieved billions of USD in direct loans, and even more billions of USD in credit from the Chinese government.
  - FooBarWidget 6y ago
    Loans... credit... meaning that they have to pay it back some day. How is this different from any other company in any other country lending money to grow? The original claim was an unlimited pumping of state money, which never has to be paid back, with the purpose of killing the competition. And now that HKVision has 'won', have they raised prices and are they extorting the market, as the original claim said?
FooBarWidget 6y ago
There's a big difference between receiving an amount of government subsidy, and the government funding almost everything with nearly no budget limits. The former is definitely true, though China is not the only country engaging in such a practice. The latter claim needs sources to back up. If you look at the Chinese chip industry, then you see that a lot of money comes from the private sector. Huawei, Xiaomi, etc are investing a ton of money in semiconductor companies. SMIC got a lot of funds through a stock market IPO. Clearly it's not all government money. There's also a big difference between investing in an industry with the goal of dominating the world and eliminating competition, vs the goal of becoming a sovereign equal. Why is it necessarily the former, and not the latter? The reason why the Chinese government invests in many sectors, is because they want to be independent instead of being at the mercy of foreign sanctions. If it weren't for that, they'd happily buy from foreign suppliers because that's cheaper than developing the technology themselves. There is another documented history: that of the US sanctioning China, preventing China from accessing all sorts of western technology. For example, the US denied China of space technology. So now, China has wholly self-developed space technology. China isn't selling space technology below production costs to kill competitors. China invested in this sector in order to safeguard their access to space. https://www.businessinsider.com/nasa-china-collaboration-illegal-2015-10 https://www.businessinsider.com/nasa-china-collaboration-ill... The US forced TSMC to not supply to many Chinese companies, and TSMC isn't even a US company. The US is trying to kill the Chinese semiconductor industry, making it wholly reliant on foreign suppliers. For years, Chinese companies have bought from foreign semiconductor suppliers because those are better. But the US has now turned this matter into an existential crisis, a matter of survival. Is it then any wonder that China, both public and private actors, are now pouring billions into the domestic semiconductor industry?
- fock 6y ago
  > If you look at the Chinese chip industry, then you see that a lot of money comes from the private sector. Huawei, Xiaomi, etc are investing a ton of money in semiconductor companies. A private sector which got so successful not least because government systematically robbed IP from competitors (Nortel...). Yes, western politics also messed this up, but no these are not "private" sector operations in the same way Tesla is.
deleted 6y ago
[deleted]
flamble 6y ago
The offshoring of the production of consumer electronics devices is mostly the result of the free-trade policies of said countries, coupled with market forces. The growth centred around manufacturing has been the basis of Chinese prosperity and requires no speculating about devious motives to account for. As for the Chinese government's massive spending and subsidization of key industries, it's largely due to being free of the particular ideological constraints which force the US government to entrust everything to the market (except the military industry) which has predictably led to brittleness and vulnerability. The American approach does resemble the Chinese one in a sense. Whereas the Chinese government prefers to directly subsidize e.g. semiconductors, the US government pours unfathomable quantities of capital into a military capable of dissuading any country from capitalizing on the US's dependency on any of their industries. When this approach breaks down, as in the case of China, things tend to get very dicey.
- AnthonyMouse 6y ago
  > The offshoring of the production of consumer electronics devices is mostly the result of the free-trade policies of said countries, coupled with market forces. This fails to explain why everything moved to China and not Mexico or Brazil or India. > As for the Chinese government's massive spending and subsidization of key industries, it's largely due to being free of the particular ideological constraints which force the US government to entrust everything to the market (except the military industry) which has predictably led to brittleness and vulnerability. Entrusting everything to the market works great when it's a level playing field. When a country is doing things that would be an antitrust violation if done by a company, that requires another country to stop them. Typically through the use of trade sanctions, i.e. tariffs. > The American approach does resemble the Chinese one in a sense. Whereas the Chinese government prefers to directly subsidize e.g. semiconductors, the US government pours unfathomable quantities of capital into a military capable of dissuading any country from capitalizing on the US's dependency on any of their industries. In other words it's completely different?
  - flamble 6y ago
    I understand now. Unfettered market freedom is the best way to organize things and at the same time, large-scale government intervention is an unfair competitive advantage. > This fails to explain why everything moved to China and not Mexico or Brazil or India. Of course, no industries moved from the US to Mexico, Brazil or India over the same period as China's rise. > In other words it's completely different? Yes, in the sense that a portion of massive Chinese government spending goes directly into producing things that people need, and almost all of massive US government spending goes into funding imperialist violence.