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When you start an economic war you should make sure that you're not the one who's in the inferior position. When the US started the economic war with China aro
by simonblack 2y ago
When you start an economic war you should make sure that you're not the one who's in the inferior position.
When the US started the economic war with China around 2017 it shot itself in the foot. Banning whole companies like Huawei is almost like shooting yourself in the head.
American companies need Chinese companies more than Chinese companies need American companies.
The Chinese companies will win. (They produce more and they have bigger markets.)
- audunw 2y agoThat’s just categorically false. China needs US companies for their survival. They have neither food security nor energy independence, and the they’re critically dependent on American companies in several aspects of those areas. You can’t just look at market size, you have to look at margins, and for China they haven’t been able to build brands that can get great margins outside of some exceptions like DJI. In many cases China is massively subsidising these companies with cheap loans, hoping to build up a profitable industry in the long run. How long can this last? If you take shadow banking into account China has an insanely high debt to GDP ratio. China is also becoming an increasingly hostile place for investments, and bad for attracting talent over the long term. If you’re a world class talent in a field you can go to the US, become a citizen and build a life there. You can’t become a citizen in China and when you’re a resident you have very few rights.
- simonblack 2y agoChina needs US companies for their survival. OK, I'll bite. Give me four US companies that China can't survive without.
- mtcprodus 2y ago[flagged]