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> “The U.S. government’s campaign against Huawei is inadvertently bolstering the company’s resilience, echoing the age-old adage that what doesn’t kill you make

> “The U.S. government’s campaign against Huawei is inadvertently bolstering the company’s resilience, echoing the age-old adage that what doesn’t kill you makes you stronger,” Then in the _very next_ paragraphs: > State money was critical. [...] billions of dollars flowed from the Chinese government to Huawei through preferential buying contracts and subsidies So what does the "age old adage" have to do with anything? It doesn't matter what US policy is if China has decided to make you a defacto state run company. This is a bizarre and meandering analysis that doesn't convey anything useful.

woooooo 2y ago
It's state policy on both sides. Cutting China and particularly Huawei off from access to our tech has forced them to develop capacity domestically, at a state and corporate level. Good for tech in an abstract space race kind of way, but pretty debatable as a geopolitical move.
- onepointsixC 2y ago
  It didn't force them to forced them to develop capacity domestically. They always wanted to do that and have been spending princely sums yearly to try to get there. It removed the ability to have a cheap and gradual transition from foreign ones to domestic ones.
  - elcritch 2y ago
    Turns out that if the US Govt really wanted to hobble Huawei long term then it should have “given” them upper management from Boeing, Intel, and a few others instead. Maybe even subsidize some McKenzie consultants for them!
Dalewyn 2y ago
>So what does the "age old adage" have to do with anything? China is succeeding at securing their industry and supply chains despite (or because of) our Cold War II efforts. Meanwhile, if Intel is any indication we are consistently failing to secure our industry and supply chains and China hasn't even had to do anything besides just exist.
- onepointsixC 2y ago
  It’s not just existing, the Chinese give an order of magnitude more subsidies. The CHIPS act was always been too little. If it at least matched that of China, without considering how much more their subsides pays for in China in PPP terms, then we’d be in decent shape.
  - Rinzler89 2y ago
    >It’s not just existing, the Chinese give an order of magnitude more subsidies. Are they really? Are they giving more than what state subsidies Silicon Valley companies received from the WW2 radar/radio era, from Shockley semiconductors, to the Traitorous eight[1], to the present day? To me it seems China is only spending so much because they need to speedrun in a couple of decades what the US achieved in 3 times that, but it also did that with a lot of state subsidies, let's not kid ourselves. For example, EUV lithography exists because the US state sponsored Sandia Labs for the research, but we're supposed to think "China bad" when the CCP does the same? Same with other SV tech that came out of defense or state sponsored projects. Also, the way the financial system is set up in the US and they way the VC sector works, is also somewhat of form of state subsidies in disguise since the US gov just prints loads of cheap money, investors would dump it on 100 companies, one would boom to become the world dominator, the other 99 would flop, and get written as a tax write-off, and presto, you have a VC sector that no other country can replicate because they don't own the money printer to the world's reserve currency. [1] https://en.wikipedia.org/wiki/Traitorous_eight https://en.wikipedia.org/wiki/Traitorous_eight
    - cyberax 2y ago
      > For example, EUV lithography exists because the US state sponsored Sandia Labs for the research That's a stretch. EUV lithography was developed by multiple private companies over about two decades. The idea of using EUV for lithography was straightforward, but technical implementation was anything but.
throw310822 2y ago
Money can only get you so far; government money often even less. Yes of course, Huawei and the whole high tech IT hardware sector is strategic, and this is both why the US government tried to kneecap China and why the Chinese government intervened to save its companies. But money doesn't turn by itself in technological progress and most other countries wouldn't have managed, even with the same amount of money.
- maxglute 2y ago
  >most other countries wouldn't have managed This is really the crux. I don't think any hightech company from any other country could have survived Huawei tier sanctions US imposed, much less come back from it within a few years. Apart from sacrificing some of mobile/honor/consumer global footprint, HW's telco/ICT still has global market share except in a few countries US is pressing hard to get HW ban. Even then I wonder for how long/durable, half the reason countries including FVEY conceded to banning HW (after fairly prolonged negotiation/hesitation) was because US made decision for them via sanctions that made HW's ability to build gear/honor long term contract uncertain. While no US partners going to reverse position to piss off US, but they may just take sweet time/find excuses not to stripout./replace HW gear scheduled for next few years. Would not be surprised if they start asking for exemptions now that HW increasingly able to service gear without US inputs. Even US still has 20k+ pieces of HW + ZTE kit in domestic networks.
- ein0p 2y ago
  > government money often even less Not if you get shot for fraud. If that’s the case, government money can get you very far indeed.
onepointsixC 2y ago
There's so much poor analysis on the subject which pretends that Beijing hasn't been dumping orders of magnitude more subsidies into Chip companies. Yes Huawei is still around, China wasn't going to let it fail no matter what. It was worth doing because without US withholding western technology the plan was to gradually replace piece by piece of the supply chain with domestic ones. Instead Chinese companies must do a lot more at once which comes at a greater costs.
awinter-py 2y ago
the classic kelly clarkson single about using industrial policy to stay afloat when a revenue source goes away
walterbell 2y ago
https://ecipe.org/wp-content/uploads/2024/02/ECI_24_PolicyBrief_03-2024_LY02.pdf https://ecipe.org/wp-content/uploads/2024/02/ECI_24_PolicyBr... > It is tempting to assume that Huawei’s survival is solely attributable to massive state subsidies. However, the reality is more nuanced with fiscal policy complemented by research, development, and diversification, as well as the indecisive application of US sanctions.. US export controls affected the device business – which is an unprofitable side business – rather than its core business in carrier equipment.. With limited access to Taiwanese and Korean foundries, Huawei has retained the same baseband card for nearly four years – a design built around Balong 5000 chipset, a 7 nm [2019] ASIC.. Huawei is packing more chips onto each card to keep pace on mMIMOs. Its power performance is suffering, but Huawei offset these gaps by adjusting its prices to compensate for the higher electricity bills for its customers, thereby keeping [TCO] constant.. The shift in US strategy – from promoting “trusted vendors” to trying to spawn a US alternative – only resulted in eroded profitability.. or market shares swapping hands among Western vendors.. in December 2023, AT&T took the decision to replace its brand-new Nokia 5G equipment with an O-RAN-compliant network delivered by Ericsson.
A_D_E_P_T 2y ago
> So what does the "age old adage" have to do with anything? It doesn't matter what US policy is if China has decided to make you a defacto state run company. It's not a complete non sequitur if China's additional support of Huawei can be attributed to the US's campaign against the company. Put the shoe on the other foot: Imagine China sanctions Intel with the intent of driving them out of key markets. Hostile foreign government action. It would surprise nobody if, in response, the US government then took steps to shore up Intel's position. Domestic government reaction. ...US consumers would also be drawn to Intel, in this scenario, as an icon of American industry bravely resisting foreign interference. So the situation with Huawei is by no means surprising.
- Rinzler89 2y ago
  >...US consumers would also be drawn to Intel I take it you aren't following the latest news. Intel of today is more like Boeing. Uncle Sam will keep it afloat due to nationals security, but its performance is weaning enough that consumers are voting with their wallets against it.
  - A_D_E_P_T 2y ago
    It's a thought experiment. They would be drawn to Intel under that set of circumstances. (Intel being singled out by a China for punitive sanctions.)
- alephnerd 2y ago
  > Imagine China sanctions Intel with the intent of driving them out of key markets China increasingly is in the consumer market (where the 28nm nodes Chinese players can domestically produce are competitive). Chinese state agencies are phasing out Intel processors for domestic processors [0] and amendments to the CHIPS act increasingly restrict Intel and other grantees from purchasing Chinese intermediate parts [1], and Intel anyhow has export controls placed on it to prevent sales to Huawei and other controlled organizations [2] In return, the US is helping subsidize Intel in building our High NA EUV capabilities (a major reason for the Intel layoffs this week) as well as Secure Enclave related R&D The whole idea of the Sullivan Principle is to force Chinese players to spend more and more money but remaining the same distance apart (2 gen) [3]. The idea is Chinese players keep burning money building capacity, yet lagging behind relatively speaking, and that money could have been used for better applications by China. Already China's GDP per Capita has remained stagnant since COVID began [4] and those tens of billions spent on building capacity could have been better applied building a more robust domestic economy, yet median per capita household incomes are stuck at around $4.6k/yr with a massive urban-rural gap (approx $7k urban, $2.9k rural) [5]. Without a robust domestic economy, and increased limits on export markets, this only leads to overproduction and deflation. [0] - https://www.ft.com/content/7bf0f79b-dea7-49fa-8253-f678d5acd64a https://www.ft.com/content/7bf0f79b-dea7-49fa-8253-f678d5acd... [1] - https://www.bloomberg.com/news/articles/2024-06-18/lawmakers-look-to-bar-chips-act-winners-from-using-chinese-tools https://www.bloomberg.com/news/articles/2024-06-18/lawmakers... [2] - https://www.reuters.com/technology/us-revoked-some-export-licenses-chinas-huawei-2024-05-07/ https://www.reuters.com/technology/us-revoked-some-export-li... [3] - https://www.belfercenter.org/event/competition-without-catastrophe-how-america-can-both-challenge-and-coexist-china-belfer https://www.belfercenter.org/event/competition-without-catas... [4] - https://data.worldbank.org/indicator/NY.GDP.PCAP.CD?locations=CN https://data.worldbank.org/indicator/NY.GDP.PCAP.CD?location... [5] - https://www.stats.gov.cn/english/PressRelease/202402/t20240201_1947120.html https://www.stats.gov.cn/english/PressRelease/202402/t202402...
aragonite 2y ago
If a foreign state launches a similar campaign against a US company, and the US government responds with industrial policy support for that company, the foreign state would have little ground to cry foul about the US company receiving state subsidies. And if the US company survives or even prospers, it's not out of the question that this could be viewed as evidence of its resilience, assuming state support isn't solely responsible for its survival/prospering.
wongarsu 2y ago
Isn't that just Chinese policy cancelling out American policy. China prevented sanctions from killing Huawei by subsidizing them. But often those kinds of subsidies make companies weaker and less competitive in the long run. There are plenty of examples of that in the US. So if Huawei did get stronger and more resilient that is noteworthy. But it's probably too early too tell.
- alephnerd 2y ago
  > Isn't that just Chinese policy cancelling out American policy Pretty much. And that's the point from the US side (http://industrialpolicy.us/resources/SpecificIndustries/IT/final-memo-china-strategy-group-axios-1.pdf http://industrialpolicy.us/resources/SpecificIndustries/IT/f...) The whole idea of the Sullivan Principle is to force Chinese players to spend more and more money but remaining the same distance apart (2 gen) [0]. The idea is Chinese players keep burning money building capacity, yet lagging behind relatively speaking, and that money could have been used for better applications by China. Already China's GDP per Capita has remained stagnant since COVID began [1] and those tens of billions spent on building capacity could have been better applied building a more robust domestic economy, yet median per capita household incomes are stuck at around $4.6k/yr with a massive urban-rural gap (approx $7k urban, $2.9k rural) [2]. Without a robust domestic economy, and increased limits on export markets, this only leads to overproduction and deflation. Edit: can't reply, so replying in here. Const 2015 dollars is still an approximation of production, and even then absolute household disposable income is low. It doesn't matter what GDP per Capita you have if the delta between that and median household income remains so large. All this implies is that the majority of revenue from production is captured by a minority. This is extremely rickety, and leads to long term economic malaise. And it's not like you are paying in 2015 dollars in 2024 - absolute cost of inputs still change, and these kinds of transformations don't mean much when looked at holistically with other metrics like median household disposable income and nominal GDP per Capita. Reply 2: Yet 50% of Chinese households still have a disposable income of well below $5k/yr. You can argue PPP all you want (it isn't even the correct application when discussing median incomes) yet inputs and all trade abroad continues to be executed at nominal rates. Only 13% of per capita household income per quarter is spent on transportation and telecom (ie. ~$50/mo per Chinese household), and much of that is spent on existing products not new products. Sure you have overproduction today, but what about 5 years from now? With absolute growth decreasing how are median household incomes expected to increase? And even the Chinese government has a finite amount of money - and instead of giving it to consumers to allow them to build a domestic economy it's only going to a handful of businesses that themselves are heavily automated and gatekept due to skilling requirements [0] - https://www.belfercenter.org/event/competition-without-catastrophe-how-america-can-both-challenge-and-coexist-china-belfer https://www.belfercenter.org/event/competition-without-catas... [1] - https://data.worldbank.org/indicator/NY.GDP.PCAP.CD?locations=CN https://data.worldbank.org/indicator/NY.GDP.PCAP.CD?location... [2] - https://www.stats.gov.cn/english/PressRelease/202402/t20240201_1947120.html https://www.stats.gov.cn/english/PressRelease/202402/t202402...
lnxg33k1 2y ago
It’s not that money is everything, otherwise Boeing would be perfect , you also need talent and vision
elfbargpt 2y ago
I'm not seeing what the contradiction is. The US made a bet that Huawei couldn't survive without foreign help, and they seemingly lost that bet. Every country subsidizes private industry to varying degrees (CHIPS act, etc...) See this NY Fed analysis of how export controls have worked out so far: https://www.newyorkfed.org/research/staff_reports/sr1096 https://www.newyorkfed.org/research/staff_reports/sr1096
- The_Colonel 2y ago
  > I'm not seeing what the contradiction is. The US made a bet that Huawei couldn't survive without foreign help That looks like a strawman, especially the "foreign" part. Sanctions often boil down to the goal of incurring costs. Huawei went from a money making to a money losing machine. China may very well cover the bill in this case, but that money will be missed elsewhere.
  - elfbargpt 2y ago
    Based on my understanding, the goal of kneecapping Huawei goes far beyond hurting the company’s P/L or market share. This is a geopolitics issue—-centered around slowing the advance of China’s technology sector related to chips / compute / etc. The capabilities of the nation as a whole is what both parties are primarily concerned with. The US wanted China dependent on the west for high end smart phones and chips. The way it’s turned out, China would have been more dependent if the US just left Huawei alone to begin with
    - The_Colonel 2y ago
      > Based on my understanding, the goal of kneecapping Huawei goes far beyond hurting the company’s P/L or market share. Hurting Huawei financially also hurts China's economy, since the government faces a difficult choice of letting it fall or footing the bill (incurring opportunity cost). > The US wanted China dependent on the west for high end smart phones and chips. That again seems like a strawman. What US appears to be doing is it tries to stifle China's development geopolitically, economically, militarily. That's the high-level goal. Reducing access to high-end chips is just a mean to do it, not the goal itself.

woooooo 2y ago

It's state policy on both sides. Cutting China and particularly Huawei off from access to our tech has forced them to develop capacity domestically, at a state and corporate level. Good for tech in an abstract space race kind of way, but pretty debatable as a geopolitical move.

onepointsixC 2y ago
It didn't force them to forced them to develop capacity domestically. They always wanted to do that and have been spending princely sums yearly to try to get there. It removed the ability to have a cheap and gradual transition from foreign ones to domestic ones.
- elcritch 2y ago
  Turns out that if the US Govt really wanted to hobble Huawei long term then it should have “given” them upper management from Boeing, Intel, and a few others instead. Maybe even subsidize some McKenzie consultants for them!

Dalewyn 2y ago

>So what does the "age old adage" have to do with anything? China is succeeding at securing their industry and supply chains despite (or because of) our Cold War II efforts. Meanwhile, if Intel is any indication we are consistently failing to secure our industry and supply chains and China hasn't even had to do anything besides just exist.

onepointsixC 2y ago
It’s not just existing, the Chinese give an order of magnitude more subsidies. The CHIPS act was always been too little. If it at least matched that of China, without considering how much more their subsides pays for in China in PPP terms, then we’d be in decent shape.
- Rinzler89 2y ago
  >It’s not just existing, the Chinese give an order of magnitude more subsidies. Are they really? Are they giving more than what state subsidies Silicon Valley companies received from the WW2 radar/radio era, from Shockley semiconductors, to the Traitorous eight[1], to the present day? To me it seems China is only spending so much because they need to speedrun in a couple of decades what the US achieved in 3 times that, but it also did that with a lot of state subsidies, let's not kid ourselves. For example, EUV lithography exists because the US state sponsored Sandia Labs for the research, but we're supposed to think "China bad" when the CCP does the same? Same with other SV tech that came out of defense or state sponsored projects. Also, the way the financial system is set up in the US and they way the VC sector works, is also somewhat of form of state subsidies in disguise since the US gov just prints loads of cheap money, investors would dump it on 100 companies, one would boom to become the world dominator, the other 99 would flop, and get written as a tax write-off, and presto, you have a VC sector that no other country can replicate because they don't own the money printer to the world's reserve currency. [1] https://en.wikipedia.org/wiki/Traitorous_eight https://en.wikipedia.org/wiki/Traitorous_eight
  - cyberax 2y ago
    > For example, EUV lithography exists because the US state sponsored Sandia Labs for the research That's a stretch. EUV lithography was developed by multiple private companies over about two decades. The idea of using EUV for lithography was straightforward, but technical implementation was anything but.

throw310822 2y ago

Money can only get you so far; government money often even less. Yes of course, Huawei and the whole high tech IT hardware sector is strategic, and this is both why the US government tried to kneecap China and why the Chinese government intervened to save its companies. But money doesn't turn by itself in technological progress and most other countries wouldn't have managed, even with the same amount of money.

maxglute 2y ago
>most other countries wouldn't have managed This is really the crux. I don't think any hightech company from any other country could have survived Huawei tier sanctions US imposed, much less come back from it within a few years. Apart from sacrificing some of mobile/honor/consumer global footprint, HW's telco/ICT still has global market share except in a few countries US is pressing hard to get HW ban. Even then I wonder for how long/durable, half the reason countries including FVEY conceded to banning HW (after fairly prolonged negotiation/hesitation) was because US made decision for them via sanctions that made HW's ability to build gear/honor long term contract uncertain. While no US partners going to reverse position to piss off US, but they may just take sweet time/find excuses not to stripout./replace HW gear scheduled for next few years. Would not be surprised if they start asking for exemptions now that HW increasingly able to service gear without US inputs. Even US still has 20k+ pieces of HW + ZTE kit in domestic networks.
ein0p 2y ago
> government money often even less Not if you get shot for fraud. If that’s the case, government money can get you very far indeed.

onepointsixC 2y ago

There's so much poor analysis on the subject which pretends that Beijing hasn't been dumping orders of magnitude more subsidies into Chip companies. Yes Huawei is still around, China wasn't going to let it fail no matter what. It was worth doing because without US withholding western technology the plan was to gradually replace piece by piece of the supply chain with domestic ones. Instead Chinese companies must do a lot more at once which comes at a greater costs.

awinter-py 2y ago

the classic kelly clarkson single about using industrial policy to stay afloat when a revenue source goes away

walterbell 2y ago

https://ecipe.org/wp-content/uploads/2024/02/ECI_24_PolicyBrief_03-2024_LY02.pdf https://ecipe.org/wp-content/uploads/2024/02/ECI_24_PolicyBr... > It is tempting to assume that Huawei’s survival is solely attributable to massive state subsidies. However, the reality is more nuanced with fiscal policy complemented by research, development, and diversification, as well as the indecisive application of US sanctions.. US export controls affected the device business – which is an unprofitable side business – rather than its core business in carrier equipment.. With limited access to Taiwanese and Korean foundries, Huawei has retained the same baseband card for nearly four years – a design built around Balong 5000 chipset, a 7 nm [2019] ASIC.. Huawei is packing more chips onto each card to keep pace on mMIMOs. Its power performance is suffering, but Huawei offset these gaps by adjusting its prices to compensate for the higher electricity bills for its customers, thereby keeping [TCO] constant.. The shift in US strategy – from promoting “trusted vendors” to trying to spawn a US alternative – only resulted in eroded profitability.. or market shares swapping hands among Western vendors.. in December 2023, AT&T took the decision to replace its brand-new Nokia 5G equipment with an O-RAN-compliant network delivered by Ericsson.

A_D_E_P_T 2y ago

> So what does the "age old adage" have to do with anything? It doesn't matter what US policy is if China has decided to make you a defacto state run company. It's not a complete non sequitur if China's additional support of Huawei can be attributed to the US's campaign against the company. Put the shoe on the other foot: Imagine China sanctions Intel with the intent of driving them out of key markets. Hostile foreign government action. It would surprise nobody if, in response, the US government then took steps to shore up Intel's position. Domestic government reaction. ...US consumers would also be drawn to Intel, in this scenario, as an icon of American industry bravely resisting foreign interference. So the situation with Huawei is by no means surprising.

Rinzler89 2y ago
>...US consumers would also be drawn to Intel I take it you aren't following the latest news. Intel of today is more like Boeing. Uncle Sam will keep it afloat due to nationals security, but its performance is weaning enough that consumers are voting with their wallets against it.
- A_D_E_P_T 2y ago
  It's a thought experiment. They would be drawn to Intel under that set of circumstances. (Intel being singled out by a China for punitive sanctions.)
alephnerd 2y ago
> Imagine China sanctions Intel with the intent of driving them out of key markets China increasingly is in the consumer market (where the 28nm nodes Chinese players can domestically produce are competitive). Chinese state agencies are phasing out Intel processors for domestic processors [0] and amendments to the CHIPS act increasingly restrict Intel and other grantees from purchasing Chinese intermediate parts [1], and Intel anyhow has export controls placed on it to prevent sales to Huawei and other controlled organizations [2] In return, the US is helping subsidize Intel in building our High NA EUV capabilities (a major reason for the Intel layoffs this week) as well as Secure Enclave related R&D The whole idea of the Sullivan Principle is to force Chinese players to spend more and more money but remaining the same distance apart (2 gen) [3]. The idea is Chinese players keep burning money building capacity, yet lagging behind relatively speaking, and that money could have been used for better applications by China. Already China's GDP per Capita has remained stagnant since COVID began [4] and those tens of billions spent on building capacity could have been better applied building a more robust domestic economy, yet median per capita household incomes are stuck at around $4.6k/yr with a massive urban-rural gap (approx $7k urban, $2.9k rural) [5]. Without a robust domestic economy, and increased limits on export markets, this only leads to overproduction and deflation. [0] - https://www.ft.com/content/7bf0f79b-dea7-49fa-8253-f678d5acd64a https://www.ft.com/content/7bf0f79b-dea7-49fa-8253-f678d5acd... [1] - https://www.bloomberg.com/news/articles/2024-06-18/lawmakers-look-to-bar-chips-act-winners-from-using-chinese-tools https://www.bloomberg.com/news/articles/2024-06-18/lawmakers... [2] - https://www.reuters.com/technology/us-revoked-some-export-licenses-chinas-huawei-2024-05-07/ https://www.reuters.com/technology/us-revoked-some-export-li... [3] - https://www.belfercenter.org/event/competition-without-catastrophe-how-america-can-both-challenge-and-coexist-china-belfer https://www.belfercenter.org/event/competition-without-catas... [4] - https://data.worldbank.org/indicator/NY.GDP.PCAP.CD?locations=CN https://data.worldbank.org/indicator/NY.GDP.PCAP.CD?location... [5] - https://www.stats.gov.cn/english/PressRelease/202402/t20240201_1947120.html https://www.stats.gov.cn/english/PressRelease/202402/t202402...

aragonite 2y ago

If a foreign state launches a similar campaign against a US company, and the US government responds with industrial policy support for that company, the foreign state would have little ground to cry foul about the US company receiving state subsidies. And if the US company survives or even prospers, it's not out of the question that this could be viewed as evidence of its resilience, assuming state support isn't solely responsible for its survival/prospering.

wongarsu 2y ago

Isn't that just Chinese policy cancelling out American policy. China prevented sanctions from killing Huawei by subsidizing them. But often those kinds of subsidies make companies weaker and less competitive in the long run. There are plenty of examples of that in the US. So if Huawei did get stronger and more resilient that is noteworthy. But it's probably too early too tell.

alephnerd 2y ago
> Isn't that just Chinese policy cancelling out American policy Pretty much. And that's the point from the US side (http://industrialpolicy.us/resources/SpecificIndustries/IT/final-memo-china-strategy-group-axios-1.pdf http://industrialpolicy.us/resources/SpecificIndustries/IT/f...) The whole idea of the Sullivan Principle is to force Chinese players to spend more and more money but remaining the same distance apart (2 gen) [0]. The idea is Chinese players keep burning money building capacity, yet lagging behind relatively speaking, and that money could have been used for better applications by China. Already China's GDP per Capita has remained stagnant since COVID began [1] and those tens of billions spent on building capacity could have been better applied building a more robust domestic economy, yet median per capita household incomes are stuck at around $4.6k/yr with a massive urban-rural gap (approx $7k urban, $2.9k rural) [2]. Without a robust domestic economy, and increased limits on export markets, this only leads to overproduction and deflation. Edit: can't reply, so replying in here. Const 2015 dollars is still an approximation of production, and even then absolute household disposable income is low. It doesn't matter what GDP per Capita you have if the delta between that and median household income remains so large. All this implies is that the majority of revenue from production is captured by a minority. This is extremely rickety, and leads to long term economic malaise. And it's not like you are paying in 2015 dollars in 2024 - absolute cost of inputs still change, and these kinds of transformations don't mean much when looked at holistically with other metrics like median household disposable income and nominal GDP per Capita. Reply 2: Yet 50% of Chinese households still have a disposable income of well below $5k/yr. You can argue PPP all you want (it isn't even the correct application when discussing median incomes) yet inputs and all trade abroad continues to be executed at nominal rates. Only 13% of per capita household income per quarter is spent on transportation and telecom (ie. ~$50/mo per Chinese household), and much of that is spent on existing products not new products. Sure you have overproduction today, but what about 5 years from now? With absolute growth decreasing how are median household incomes expected to increase? And even the Chinese government has a finite amount of money - and instead of giving it to consumers to allow them to build a domestic economy it's only going to a handful of businesses that themselves are heavily automated and gatekept due to skilling requirements [0] - https://www.belfercenter.org/event/competition-without-catastrophe-how-america-can-both-challenge-and-coexist-china-belfer https://www.belfercenter.org/event/competition-without-catas... [1] - https://data.worldbank.org/indicator/NY.GDP.PCAP.CD?locations=CN https://data.worldbank.org/indicator/NY.GDP.PCAP.CD?location... [2] - https://www.stats.gov.cn/english/PressRelease/202402/t20240201_1947120.html https://www.stats.gov.cn/english/PressRelease/202402/t202402...

lnxg33k1 2y ago

It’s not that money is everything, otherwise Boeing would be perfect , you also need talent and vision

elfbargpt 2y ago

I'm not seeing what the contradiction is. The US made a bet that Huawei couldn't survive without foreign help, and they seemingly lost that bet. Every country subsidizes private industry to varying degrees (CHIPS act, etc...) See this NY Fed analysis of how export controls have worked out so far: https://www.newyorkfed.org/research/staff_reports/sr1096 https://www.newyorkfed.org/research/staff_reports/sr1096

The_Colonel 2y ago
> I'm not seeing what the contradiction is. The US made a bet that Huawei couldn't survive without foreign help That looks like a strawman, especially the "foreign" part. Sanctions often boil down to the goal of incurring costs. Huawei went from a money making to a money losing machine. China may very well cover the bill in this case, but that money will be missed elsewhere.
- elfbargpt 2y ago
  Based on my understanding, the goal of kneecapping Huawei goes far beyond hurting the company’s P/L or market share. This is a geopolitics issue—-centered around slowing the advance of China’s technology sector related to chips / compute / etc. The capabilities of the nation as a whole is what both parties are primarily concerned with. The US wanted China dependent on the west for high end smart phones and chips. The way it’s turned out, China would have been more dependent if the US just left Huawei alone to begin with
  - The_Colonel 2y ago
    > Based on my understanding, the goal of kneecapping Huawei goes far beyond hurting the company’s P/L or market share. Hurting Huawei financially also hurts China's economy, since the government faces a difficult choice of letting it fall or footing the bill (incurring opportunity cost). > The US wanted China dependent on the west for high end smart phones and chips. That again seems like a strawman. What US appears to be doing is it tries to stifle China's development geopolitically, economically, militarily. That's the high-level goal. Reducing access to high-end chips is just a mean to do it, not the goal itself.