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The CCP's current manufacturing policy is analogous to the modern venture capitalist approach of "subsidize the product until your competitors go broke, then re
by kibwen 2y ago
The CCP's current manufacturing policy is analogous to the modern venture capitalist approach of "subsidize the product until your competitors go broke, then reap the fruits of having a captive market by the balls", except the fruits have gone from "the power to set prices as a monopoly and extract a massive amount of profit" to "massive geopolitical leverage against countries that are dependent on your exports". It's a risky strategy because it's trivially countered by protectionist policies, but that depends on countries voluntarily refusing the free money that China is doing its best to shovel into your pockets. In other words, it's a bet that China's rivals cannot successfully resist short-term greed despite the huge and transparent long-term risks.
- Johanx64 2y ago> it's trivially countered by protectionist policies This assumes your local manufacturing and supply chains aren't completely demolished, expertise hasn't died out and been replaced and you can just restart it "trivially" overnight by slapping an import tariff
- klyrs 2y agoI would not say that this is trivially corrected. The latest news from Boeing is that American manufacturing has been obliterated. Rebuilding the skill and culture that has been lost is neither easy nor guaranteed.
- kortilla 2y agoNot a good example because Boeing didn’t outsource. China flies Boeing airframes made in the US and has for the last 50 years. Boeing is an example of financiers running the company from an ivory tower on the other side of the country.
- klyrs 2y ago> Not a good example because Boeing didn’t outsource. No, that's precisely my point actually. Boeing is one of the very few companies that maintained its local manufacturing capacity. (to say that they "didn't outsource" is not remotely accurate) Despite everything that was pointing in Boeing's favor -- culture, financials, market, reputation; it was taken over by the MBAs that put McDonnell-Douglas into a nosedive and now all of that is gone. So now, let's assume that Boeing sees the light and wants to rebuild their manufacturing chops. Who do they hire? Who can they hire, who has the manufacturing expertise? When I worked at Boeing 25 years ago, the old-timers were invaluable. Most of those folks are dead and gone; my generation should be graduating into old-timer-hood in the next couple of decades but Boeing hasn't invested in us. Wages have been stagnant, software is easier, tiktok is more exciting, and the young generation is used to being bossed around by MBAs who don't understand the work. If not Boeing, the once-shining-example of American manufacturing what didn't outsource, who can bootstrap our manufacturing renaissance?
- grogenaut 2y agoAah the McDonald excuse again. The favorite pivot of every boing apologist and conspiracy theorist. If only Mac, a completely successful defense contractor, hadn't somehow engineered a completely galaxy brained backdoor purchase of their largest competitor Boeing like a tapewirm because they needed cash after the f112 cancellation they never would have lost that engineering led spirit. Get over it. Boeing wasn't doing great and has always had struggles. They wanted to get further into defense and kill off a competitor. Also Wharton came for everyone in the 90s and 00s. If Boeing stayed seperate from the evil Mac they still would have been inmundated by best practice short term bean counters from every MBA school in the country. Also if you ask a machinist in Seattle or STL if Boeing outsources, they sure do, to those non-union untrained unqualified folks in the south. Nevermind all the moisture that gets into the plane when you wheel a 747 from an air-conditioned warehouse to the southeast sauna. Boeing has always fought with it's union so that wasn't the fault of the Boogeyman either.
- jncfhnb 2y agoIt’s even more than that. Chinese manufacturing is sort of a growth vehicle like real estate. They’ve pumped up manufacturing capacity far more than is necessary to undercut international competitors. These firms are dying in large part because there’s too many of them.
- namaria 2y agoTrade policymaking is anything but trivial.
- manuel_w 2y ago> It's a bet that China's rivals cannot successfully resist short-term greed despite the huge and transparent long-term risks. Seems they have correctly identified the western worlds weakness. Isn't it the same with climate warming? In the long run it would have been cheaper to prevent climate warning in it's early stages. Yet, we delayed (and are delaying) necessary actions as long as possible. In the end, the loss caused by climate change will by far outweigh the cost if we'd have taken measures early.
- kiba 2y agoIf your strategy is dependent on the enemy continuing to make the same mistake year after year, then it's a bad strategy. The enemy always get a vote after all. Now that said, assuming your enemy is competent can also lead to strategic miscalculation, such as Russia invading Ukraine when everybody but the US thought they would never be insane enough to do so. There's a difference between "what I would do if I were X" as opposed to "what would X really do?" That said, it's safer to assume that the adversary is intelligent but that isn't a substitute for actually understanding your enemy. Or perhaps, they don't have to be your enemy.