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The Chinese government attempting to pick winners is the best hope the chip embargo has; Xi Jinping is ironically the person best placed to cause it to succeed.

by roenxi 3y ago

The Chinese government attempting to pick winners is the best hope the chip embargo has; Xi Jinping is ironically the person best placed to cause it to succeed. The issue is that a Manhattan projet styled effort followed up by turning technology over to private industry is something that China could very well do and would probably be effective. Let alone the silly idea of challenging multiple countries simultaneously as was proposed at the thread root. China tried that with rare earths and failed about as quickly as could be expected; as I recall they lost a quarter of the market in short order and backed off.

wslh 3y ago
I would just emphasize something obvious about different cultures. Culturally, China is really long term while the West culture is anxious (not bad, just different) and looking for short term results. China does not have problems embracing challenging and strategic endeavours knowing that the result will come out eventually.
- roenxi 3y ago
  People say stuff like that all the time, then the most free market economy does well in the long term. Culture is important, but mainly as far as it permits people to freely help themselves prosper. The West is made up of countries that often have 40%+ of their economy made up by government spending, ie, spending that wouldn't happen under a free market. That is far more a problem as far as raw economic outcomes than long- or short- term cultures. China will collapse if someone high up in the government attempts a 2nd Leap Forward, culture matters a lot in whether they tolerate a bureaucracy with that sort of power (history hint - don't tolerate that sort of power in the bureaucracy).
  - wslh 3y ago
    > China will collapse if someone high up in the government attempts a 2nd Leap Forward... China has collapsed before and here it is. My observation was about time perception in different cultures not a pro-China anti-West rant. The perception of time can play in favor or against you but it is an important factor to take into account. For example, the canonical startup culture is about scaling scaling scaling and exit in a short term while business cultures in China or Japan are different.
  - throwaway2037 3y ago
    > The West is made up of countries that often have 40%+ of their economy made up by government spending, ie, spending that wouldn't happen under a free market. How about Japan, Korea, Taiwan, and Chile? What what is the "correct" percent to spend? And, what non-microstate countries do you consider "free market"? By the time you include: military, education, health, and infrastructure, it is very hard to be less than 25% for any highly developed nation.
    - roenxi 3y ago
      > What what is the "correct" percent to spend? Quite an interesting question - theories range from 0% to 100% and everywhere in between. Empirical evidence seems to be that >60% causes a collapse of some sort [3] since nobody serious is doing that. And probably a floor of 20% since Singapore operates at 15% but doesn't really try to field a military and is a micronation. Anywhere at 40%+ seems to have problems with industrial production and innovation. I'd suggest there is a sweet spot at 20-30% spending on uneconomic projects, although obviously if that number can be reduced then more spending on uneconomic things means more stuff for everyone. If we look at the countries you suggest, we see 44% (Japan), 27% (South Korea), 16% (Taiwan), 26% (Chile). We see that GDP per capita improvement is worst in Japan [1, 2]. There is a bit of a link between high growth and low government spending. Of course, if a country is growing quickly and the government isn't spending much then government expenditure will appear low so we can't be certain it is causal - but we would suspect that fast growth isn't led by government spending. My personal theory is we see economies grow, then people kill the growth and coast. The high-taxing economies are lovely places to live for a while, but are getting crushed industrially and have generally managed to get themselves into an energy crisis which is starting to have an impact on living standards. Coasting is a bad long term plan. Until someone comes up with a number, we should at least experiment with zones of as close to 0% taxation and spending as can be managed without compromising the consensus essential services. That is the sort of thing China looked to be doing in Shenzhen and it worked wonders. [0] https://en.wikipedia.org/wiki/List_of_countries_by_government_spending_as_percentage_of_GDP https://en.wikipedia.org/wiki/List_of_countries_by_governmen... [1] https://ourworldindata.org/grapher/gdp-per-capita-worldbank?tab=chart&country=JPN~CHL~KOR https://ourworldindata.org/grapher/gdp-per-capita-worldbank?... [2] https://www.ceicdata.com/en/indicator/taiwan/gdp-per-capita https://www.ceicdata.com/en/indicator/taiwan/gdp-per-capita [3] My guess is if we look at return on capital that is around the point where depreciation starts to overtake investment. And the symptoms of wastefulness go from sluggish--or-arrested-growth to now-obviously-shrinking-rapidly.
- melagonster 3y ago
  and don't forget defeating western world is a common dream of all Chinese people. they are fighting for this prospect until it comes true. this is helpful for encouraging people.
  - corimaith 3y ago
    Pretty sure the average guy in China has more pressing issues than thinking about "defeating" some abstract concept thousands of miles away.
    - melagonster 3y ago
      Normal nationalist propaganda can work well.

by roenxi 3y ago

wslh 3y ago

I would just emphasize something obvious about different cultures. Culturally, China is really long term while the West culture is anxious (not bad, just different) and looking for short term results. China does not have problems embracing challenging and strategic endeavours knowing that the result will come out eventually.

roenxi 3y ago
People say stuff like that all the time, then the most free market economy does well in the long term. Culture is important, but mainly as far as it permits people to freely help themselves prosper. The West is made up of countries that often have 40%+ of their economy made up by government spending, ie, spending that wouldn't happen under a free market. That is far more a problem as far as raw economic outcomes than long- or short- term cultures. China will collapse if someone high up in the government attempts a 2nd Leap Forward, culture matters a lot in whether they tolerate a bureaucracy with that sort of power (history hint - don't tolerate that sort of power in the bureaucracy).
- wslh 3y ago
  > China will collapse if someone high up in the government attempts a 2nd Leap Forward... China has collapsed before and here it is. My observation was about time perception in different cultures not a pro-China anti-West rant. The perception of time can play in favor or against you but it is an important factor to take into account. For example, the canonical startup culture is about scaling scaling scaling and exit in a short term while business cultures in China or Japan are different.
- throwaway2037 3y ago
  > The West is made up of countries that often have 40%+ of their economy made up by government spending, ie, spending that wouldn't happen under a free market. How about Japan, Korea, Taiwan, and Chile? What what is the "correct" percent to spend? And, what non-microstate countries do you consider "free market"? By the time you include: military, education, health, and infrastructure, it is very hard to be less than 25% for any highly developed nation.
  - roenxi 3y ago
    > What what is the "correct" percent to spend? Quite an interesting question - theories range from 0% to 100% and everywhere in between. Empirical evidence seems to be that >60% causes a collapse of some sort [3] since nobody serious is doing that. And probably a floor of 20% since Singapore operates at 15% but doesn't really try to field a military and is a micronation. Anywhere at 40%+ seems to have problems with industrial production and innovation. I'd suggest there is a sweet spot at 20-30% spending on uneconomic projects, although obviously if that number can be reduced then more spending on uneconomic things means more stuff for everyone. If we look at the countries you suggest, we see 44% (Japan), 27% (South Korea), 16% (Taiwan), 26% (Chile). We see that GDP per capita improvement is worst in Japan [1, 2]. There is a bit of a link between high growth and low government spending. Of course, if a country is growing quickly and the government isn't spending much then government expenditure will appear low so we can't be certain it is causal - but we would suspect that fast growth isn't led by government spending. My personal theory is we see economies grow, then people kill the growth and coast. The high-taxing economies are lovely places to live for a while, but are getting crushed industrially and have generally managed to get themselves into an energy crisis which is starting to have an impact on living standards. Coasting is a bad long term plan. Until someone comes up with a number, we should at least experiment with zones of as close to 0% taxation and spending as can be managed without compromising the consensus essential services. That is the sort of thing China looked to be doing in Shenzhen and it worked wonders. [0] https://en.wikipedia.org/wiki/List_of_countries_by_government_spending_as_percentage_of_GDP https://en.wikipedia.org/wiki/List_of_countries_by_governmen... [1] https://ourworldindata.org/grapher/gdp-per-capita-worldbank?tab=chart&country=JPN~CHL~KOR https://ourworldindata.org/grapher/gdp-per-capita-worldbank?... [2] https://www.ceicdata.com/en/indicator/taiwan/gdp-per-capita https://www.ceicdata.com/en/indicator/taiwan/gdp-per-capita [3] My guess is if we look at return on capital that is around the point where depreciation starts to overtake investment. And the symptoms of wastefulness go from sluggish--or-arrested-growth to now-obviously-shrinking-rapidly.
melagonster 3y ago
and don't forget defeating western world is a common dream of all Chinese people. they are fighting for this prospect until it comes true. this is helpful for encouraging people.
- corimaith 3y ago
  Pretty sure the average guy in China has more pressing issues than thinking about "defeating" some abstract concept thousands of miles away.
  - melagonster 3y ago
    Normal nationalist propaganda can work well.