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Subsidies. Basically all savers in China that have money in the bank have to pay for development of what the central Government considers a priority, like steel

Subsidies. Basically all savers in China that have money in the bank have to pay for development of what the central Government considers a priority, like steel and aluminium production, solar panels or EV vehicles, or chip manufacturing. Aluminium and steel costs significantly less in China than the rest of the world, but they now face significant problems because of overcapacity. There are so much factories built and so small demand companies can not survive without help from the Government. They were build thanks to cheap loans from the Government. So the Government made an investment that is not making money, so basically is a transfer of wealth from bank savers account to industry. This is also applied in the US and EU, let's remember interest rates below inflation, "Quantitative Easing" and other transfers of wealth the central banks do in the West. Tesla was also subsidised.

fy20 2y ago
> There are so much factories built and so small demand companies can not survive without help from the Government. They were build thanks to cheap loans from the Government. It feels like this is true for any older Western country like Germany or the UK too. Why exactly have China been successful in reducing costs?
- michpoch 2y ago
  > Why exactly have China been successful in reducing costs? Reducing price != reducing cost
- insane_dreamer 2y ago
  The subsidies in China have been significantly larger. Besides that, EVs in the US are targeting a different market segment. It's for people who would be buying a $40K SUV, not those buying a $20K Corolla.
- ammo1662 2y ago
  Just check the comments here: https://news.ycombinator.com/item?id=42942405 https://news.ycombinator.com/item?id=42942405 China boasts a complete industrial chain and the best logistics infrastructure. If you want to engage in industrial production, you can find the most suppliers here, who can provide you with the parts you need at the fastest speed and lowest logistics cost. Not to mention the largest number of educated workers, who won't leave marijuana in the products you send to customers. These are all factors that can actually reduce costs, which cannot be achieved solely by subsidies.

fy20 2y ago

> There are so much factories built and so small demand companies can not survive without help from the Government. They were build thanks to cheap loans from the Government. It feels like this is true for any older Western country like Germany or the UK too. Why exactly have China been successful in reducing costs?

michpoch 2y ago
> Why exactly have China been successful in reducing costs? Reducing price != reducing cost
insane_dreamer 2y ago
The subsidies in China have been significantly larger. Besides that, EVs in the US are targeting a different market segment. It's for people who would be buying a $40K SUV, not those buying a $20K Corolla.
ammo1662 2y ago
Just check the comments here: https://news.ycombinator.com/item?id=42942405 https://news.ycombinator.com/item?id=42942405 China boasts a complete industrial chain and the best logistics infrastructure. If you want to engage in industrial production, you can find the most suppliers here, who can provide you with the parts you need at the fastest speed and lowest logistics cost. Not to mention the largest number of educated workers, who won't leave marijuana in the products you send to customers. These are all factors that can actually reduce costs, which cannot be achieved solely by subsidies.