7 ms·

It's really hard to find any constructive discussion around Chinese companies here. Anybody willing to share facts about subsidies, state control or anything t

by mtrovo 3y ago

It's really hard to find any constructive discussion around Chinese companies here. Anybody willing to share facts about subsidies, state control or anything that would justify believing that BYD success here is not justified? For me the whole story of vertical integration of a battery manufacturer company that decided to make EV cars makes a lot of sense.

late2part 3y ago
We have always been at war with Oceania.
h0l0cube 3y ago
Another narrative that’s missing is ‘Discretionary government intervention can be good for the market actually’, and if the Chinese administration is making big bets on an emerging high value market (batteries and EVs), maybe the traditionally laissez-faire US should take note. That does rely on the notion that China is actively subsidizing and enabling BYD more than the US is for Tesla, and leaving aside their efforts on battery R&D, vertical integration, leveraging lower labor costs etc. as you say
- AnthonyMouse 3y ago
  > Discretionary government intervention can be good for the market actually This is more like "government intervention can give domestic companies an unfair advantage in global markets", which isn't actually a good thing, but also isn't something you can just ignore without a response. In this case you might like it because what they're subsidizing helps with climate change, but this is mainly because we don't price carbon (pricing major externalities is one of the things governments actually have to do), not because having governments subsidize businesses is a net positive in general.
  - ZeroGravitas 3y ago
    Note that China does price carbon, which the USA does not (though some states do).
    - AnthonyMouse 3y ago
      China is building more new coal-fired power plants than anyone else. Whatever they're doing on paper, they're not doing it in practice.
      - h0l0cube 3y ago
        China is building the more solar capacity than the US[0] and more nuclear capacity[1] than anyone else. Coal as a percentage of their energy mix has been markedly decreasing since 2014 [2] [0] https://ourworldindata.org/grapher/share-electricity-solar?tab=chart&country=CHN~USA~OWID_EUR https://ourworldindata.org/grapher/share-electricity-solar?t... [1] https://ourworldindata.org/grapher/nuclear-energy-generation?tab=chart&country=OWID_WRL~CHN~OWID_EUR~USA https://ourworldindata.org/grapher/nuclear-energy-generation... [2] https://ourworldindata.org/grapher/share-elec-by-source?country=~CHN https://ourworldindata.org/grapher/share-elec-by-source?coun...
        ZeroGravitas 3y ago
        And their carbon price has played a role in that: https://www.sciencedirect.com/science/article/abs/pii/S030142152300109X https://www.sciencedirect.com/science/article/abs/pii/S03014... > How carbon emission prices accelerate net zero: Evidence from China's coal-fired power plants
        AnthonyMouse 3y ago
        This is just trying to write on both sides of the ledger. If you tax carbon but then have other policies that encourage the construction of coal-fired power plants, they might only cancel out and at worst the price is doing less than the counter-incentives. You can try to claim that it would be even worse without it, but the real metric is, are you shutting down the existing coal-fired power plants or are you building more?
        ZeroGravitas 3y ago
        No, the real metric is carbon, not the number of coal plants. "China is building more coal plants but might burn less coal" https://www.sustainabilitybynumbers.com/p/china-coal-plants https://www.sustainabilitybynumbers.com/p/china-coal-plants
  - h0l0cube 3y ago
    Just curious why it’s not a ‘good thing’? The only thing I can think of is it would be bad in the situation of a monopoly, but that’s not the current situation. Otherwise, it seems like an emergent market is being accelerated, and I, the consumer, can benefit from cheaper and better products and the attendant competition spurred by government finance of sorts. Historically it’s been seen as governments are uniformly terrible at allocating capital, but if subsidies really are the dominant factor here—still not sure that’s true—then BYD seems to be in contradiction to that theory.
    - AnthonyMouse 3y ago
      > Otherwise, it seems like an emergent market is being accelerated TANSTAAFL. The money from the subsidy came from something else, which you had to pay for. Often it comes from some industry where that country already has a dominant position and therefore can charge you higher prices without you having a choice to switch to something else. Which is, moreover, the problem with this: > I, the consumer, can benefit from cheaper and better products and the attendant competition spurred by government finance of sorts. The country doing the subsidizing thereby destroys their competitors in other countries who don't receive it, and then once they have a large enough lead they can raise prices and you have no alternative.
      - h0l0cube 3y ago
        > The country doing the subsidizing thereby destroys their competitors in other countries who don't receive it, Meh. The governments in this case become very powerful investors, and not just to a specific company, but to an entire industry, more like a sector fund. The US government is more than capable of matching China here—once again—if subsidies are what's propelling BYD, but judging by the top comment[0] it's probably just good old-fashioned capitalism favoring the best player > and then once they have a large enough lead they can raise prices and you have no alternative. I think the fears of a monopolized automotive industry are alarmist. China isn't the country with the most capital, and rather than being sore loser about it with sanctions, the US can invest in its own market just as hard. (Edit: Worth noting that this is nothing new. Countries around the world have been subsidizing automotive companies for a long time. There's some gestalt benefit here for governments in specialized training, advanced manufacturing, employment etc.) If anything with so many directions to be taken in battery chemistry and the reduction in complexity of drive train (and supply chain), more companies can enter the fray. There's plenty of room for competition. [0] https://news.ycombinator.com/item?id=39425092 https://news.ycombinator.com/item?id=39425092
  - tqi 3y ago
    > which isn't actually a good thing Maybe not for competitors but seems like a pretty good thing for the country doing the subsidizing?
    - AnthonyMouse 3y ago
      Which is why other countries would be wise to provide a disincentive for engaging in that behavior.
rodgerd 3y ago
> subsidies Given the repeated bail-outs of US carmakers, and the way Tesla have leveraged government carbon trading schemes over the years, plus the 20 year rule on importing cars, the chicken tax and so on, it would certainly be extremely rich for anyone based in the US to cast aspersions on government support for car manufacturers.
octodog 3y ago
Yeah I don't see the issue here. Why should we care if the Chinese government is subsidising the Western middle class to de-carbonised? That's a great outcome!
- infotainment 3y ago
  Same reason why "dumping" product below cost is generally considered bad in markets with a high barrier to entry -- it tends to destroy the competition, and, once the competition is destroyed, the dumper can then jack up all their prices sky-high.
2OEH8eoCRo0 3y ago
The CCP's national security laws casts a pall over the whole affair. I feel similarly about Russia. Huge countries full of great people and culture that we could learn a great deal from and grow together- if only our governments could trust each other. It makes me sad imagining other timelines.

by mtrovo 3y ago

late2part 3y ago

We have always been at war with Oceania.

h0l0cube 3y ago

Another narrative that’s missing is ‘Discretionary government intervention can be good for the market actually’, and if the Chinese administration is making big bets on an emerging high value market (batteries and EVs), maybe the traditionally laissez-faire US should take note. That does rely on the notion that China is actively subsidizing and enabling BYD more than the US is for Tesla, and leaving aside their efforts on battery R&D, vertical integration, leveraging lower labor costs etc. as you say

AnthonyMouse 3y ago
> Discretionary government intervention can be good for the market actually This is more like "government intervention can give domestic companies an unfair advantage in global markets", which isn't actually a good thing, but also isn't something you can just ignore without a response. In this case you might like it because what they're subsidizing helps with climate change, but this is mainly because we don't price carbon (pricing major externalities is one of the things governments actually have to do), not because having governments subsidize businesses is a net positive in general.
- ZeroGravitas 3y ago
  Note that China does price carbon, which the USA does not (though some states do).
  - AnthonyMouse 3y ago
    China is building more new coal-fired power plants than anyone else. Whatever they're doing on paper, they're not doing it in practice.
    - h0l0cube 3y ago
      China is building the more solar capacity than the US[0] and more nuclear capacity[1] than anyone else. Coal as a percentage of their energy mix has been markedly decreasing since 2014 [2] [0] https://ourworldindata.org/grapher/share-electricity-solar?tab=chart&country=CHN~USA~OWID_EUR https://ourworldindata.org/grapher/share-electricity-solar?t... [1] https://ourworldindata.org/grapher/nuclear-energy-generation?tab=chart&country=OWID_WRL~CHN~OWID_EUR~USA https://ourworldindata.org/grapher/nuclear-energy-generation... [2] https://ourworldindata.org/grapher/share-elec-by-source?country=~CHN https://ourworldindata.org/grapher/share-elec-by-source?coun...
      - ZeroGravitas 3y ago
        And their carbon price has played a role in that: https://www.sciencedirect.com/science/article/abs/pii/S030142152300109X https://www.sciencedirect.com/science/article/abs/pii/S03014... > How carbon emission prices accelerate net zero: Evidence from China's coal-fired power plants
        AnthonyMouse 3y ago
        This is just trying to write on both sides of the ledger. If you tax carbon but then have other policies that encourage the construction of coal-fired power plants, they might only cancel out and at worst the price is doing less than the counter-incentives. You can try to claim that it would be even worse without it, but the real metric is, are you shutting down the existing coal-fired power plants or are you building more?
        ZeroGravitas 3y ago
        No, the real metric is carbon, not the number of coal plants. "China is building more coal plants but might burn less coal" https://www.sustainabilitybynumbers.com/p/china-coal-plants https://www.sustainabilitybynumbers.com/p/china-coal-plants
- h0l0cube 3y ago
  Just curious why it’s not a ‘good thing’? The only thing I can think of is it would be bad in the situation of a monopoly, but that’s not the current situation. Otherwise, it seems like an emergent market is being accelerated, and I, the consumer, can benefit from cheaper and better products and the attendant competition spurred by government finance of sorts. Historically it’s been seen as governments are uniformly terrible at allocating capital, but if subsidies really are the dominant factor here—still not sure that’s true—then BYD seems to be in contradiction to that theory.
  - AnthonyMouse 3y ago
    > Otherwise, it seems like an emergent market is being accelerated TANSTAAFL. The money from the subsidy came from something else, which you had to pay for. Often it comes from some industry where that country already has a dominant position and therefore can charge you higher prices without you having a choice to switch to something else. Which is, moreover, the problem with this: > I, the consumer, can benefit from cheaper and better products and the attendant competition spurred by government finance of sorts. The country doing the subsidizing thereby destroys their competitors in other countries who don't receive it, and then once they have a large enough lead they can raise prices and you have no alternative.
    - h0l0cube 3y ago
      > The country doing the subsidizing thereby destroys their competitors in other countries who don't receive it, Meh. The governments in this case become very powerful investors, and not just to a specific company, but to an entire industry, more like a sector fund. The US government is more than capable of matching China here—once again—if subsidies are what's propelling BYD, but judging by the top comment[0] it's probably just good old-fashioned capitalism favoring the best player > and then once they have a large enough lead they can raise prices and you have no alternative. I think the fears of a monopolized automotive industry are alarmist. China isn't the country with the most capital, and rather than being sore loser about it with sanctions, the US can invest in its own market just as hard. (Edit: Worth noting that this is nothing new. Countries around the world have been subsidizing automotive companies for a long time. There's some gestalt benefit here for governments in specialized training, advanced manufacturing, employment etc.) If anything with so many directions to be taken in battery chemistry and the reduction in complexity of drive train (and supply chain), more companies can enter the fray. There's plenty of room for competition. [0] https://news.ycombinator.com/item?id=39425092 https://news.ycombinator.com/item?id=39425092
- tqi 3y ago
  > which isn't actually a good thing Maybe not for competitors but seems like a pretty good thing for the country doing the subsidizing?
  - AnthonyMouse 3y ago
    Which is why other countries would be wise to provide a disincentive for engaging in that behavior.

rodgerd 3y ago

> subsidies Given the repeated bail-outs of US carmakers, and the way Tesla have leveraged government carbon trading schemes over the years, plus the 20 year rule on importing cars, the chicken tax and so on, it would certainly be extremely rich for anyone based in the US to cast aspersions on government support for car manufacturers.

octodog 3y ago

Yeah I don't see the issue here. Why should we care if the Chinese government is subsidising the Western middle class to de-carbonised? That's a great outcome!

infotainment 3y ago
Same reason why "dumping" product below cost is generally considered bad in markets with a high barrier to entry -- it tends to destroy the competition, and, once the competition is destroyed, the dumper can then jack up all their prices sky-high.

2OEH8eoCRo0 3y ago

The CCP's national security laws casts a pall over the whole affair. I feel similarly about Russia. Huge countries full of great people and culture that we could learn a great deal from and grow together- if only our governments could trust each other. It makes me sad imagining other timelines.