One thing people are not aware of and am curious of how big it really is: China manufacturing laundry. Essentially, goods are manufactured in China, then laundered to a third-party country and then exported to the US/EU. This come in two flavors, legal laundry where the local manufacturer satisfies the conditions; and illegal one where bribes are paid to pass goods.
> https://antidumping.vn/eu-chinabike-duty-hits-indonesia-mala...
I come from a country that does this. Massive deficit with China vs. an equivalent surplus with the EU. Weak manufacturing base that essentially import Chinese, does some packaging and then export it back.
One example is what you seem to refer to; a solar panel reading made in Vietnam - assembled in Vietnam but by a Chinese owned company with all Chinese components.
Another example is the iPhone reading made in China with a dollar value of 400 but the true value add in China is much lower as all the IP, profit margins, and high value components belong somewhere else.
This means that even though these numbers look very unbalanced it is still Western companies that make biggest part of the profit. (At least so far though things are clearly changing with Chinese companies are climbing up the value chain.)
iPhone chips are made in Taiwan. The displays are certainly not made in the US although the glass might be.
iPhone displays are most definitely made in South Korea. Some of the components are made in Japan as well, not much is made in the USA beyond the software stack (which you are also most definitely paying for since SWEs aren’t cheap!). Also iPhones are made in SEZs (none of the components are tariffed in these zones), so they are tariffed when imported into China.
I doubt Trump tariffs will be based on value add. It would be a logistical nightmare, and he doesn’t strike me as someone who thinks too deeply about these things.
People buy iPhones for their software, which is all made here. Otherwise all phones are black rectangles. The hardware isn’t that important.
it's the opposite. People buy iPhones and Apple products for the quality of their hardware and the cost of the devices themselves reflects this. Apple is one of the least software focused tech companies in the world. Everyone except for American teens obsessed with the colors of their chat bubbles uses WhatsApp, Telegram or FB Messenger and other completely platform independent apps. Nobody's ever bought an iphone for Apple Maps, everyone runs around with Google software on their phone.
This comment completely misunderstands why Apple software is important.
To be clear, as an f’ing Linux user, the things that make Apple software good, which is consistency, lots of hand holding, and making it really hard to break things badly, are irrelevant to me.
But it’s highly relevant to the vast majority of iPhone users in the world.
> Nobody's ever bought an iphone for Apple Maps, everyone runs around with Google software on their phone.
It is still running on Apple platform. I'm buying an iPhone, because I know that I'll get consistent Apple experience that is same across all of my devices, unlike zoo of Android + Windows/Linux.
> that I'll get consistent Apple experience that is same across all of my devices.
a buggy shitty mess? count me in!
Things aren't even consistent across mac os updates. I think it's much preferable to keep a phone a phone, and the computer a computer.
I only want a macbook because of the hardware. I'd give anything for them to fix the software. but it is what it is.
What does that mean? There's no consistent Apple experience across Spotify, Venmo, TikTok and Facebook. There's pretty consistent experiences within these apps across devices, which is what people care about. Nobody cares about their operating system except for that one middle aged developer who loves that his apps look native on his macbook. But that's not why people buy phones.
Not the opposite. If Verizon had Apple hardware we would have a software nightmare.
The hardware is extremely important…
cool, so no other country except US should buy that crap
There's not too much fake origin stuff from Vietnam to US, which is the largest SEA country exporting to US.
"However, new research from Harvard Business School and Duke University paints a more nuanced picture — rerouting appears to be lower than is imagined.
While trade rerouting through Vietnam does occur, its scale appears far smaller than previously thought. The study found that in 2021, about 16.1 per cent of Vietnamese exports to the US — roughly US$15.5 billion — could be classified as potential rerouting when analysed at the product level. But when the researchers examined individual firms — tracking specific products flowing from China through Vietnam to the US — the figure fell to just 1.8 per cent, or US$1.7 billion."
https://fulcrum.sg/vietnam-china-and-rerouting-when-percepti...
What I wonder is:
Of the items that are rerouted, does Vietnam (or other similar countries) tend to move up the value chain over time? Or do the supply chains just stay as they are.
I suspect, possibly hopefully, that over time the "rerouting" countries would evolve from simple assembly/repackaging to sourcing more granular pieces of the manufacturing process from within their own borders. How fast that might happen is another question.
If anyone has any sources on this I would love to read more about it, I'm just not sure how to find them.
My EU member country assembled chineese cars for a while. I was joking that it came in two parts - the car and the badge and they just glued them together here. From what I understood later it was close to the truth.
> One thing people are not aware of and am curious of how big it really is: China manufacturing laundry. Essentially, goods are manufactured in China, then laundered to a third-party country and then exported to the US/EU.
IIRC, a lot of stuff that's labeled "Made in Singapore" is/was basically that.
As a Singaporean, I have not seen this. Do you have any proof?
Look around from a rooftop, do you see many factories with smoke coming out of chimneys?
Yes: https://maps.app.goo.gl/1ZDRiQdhr3Ngf5qP6
I'd not be surprised if this activity is quite limited in Singapore given that they have been under a tight microscope lately. Money laundering used to be their business but now they are rich and make money "legitimately" and within the "international" framework.
To be fair, having an industrial district doesn't preclude tariff laundering either. If you're trying to pass chinese goods as singaporean, you'd want your address to be a factory, rather than an office in a business park somewhere. Even if that wasn't a consideration, at the very least you'd need warehouse space to repackage/reship goods, so you'd need to rent out a warehouse/factory anyways.
Most factoies don't have a chimney. electric powers them.
You'd be surprised. Look up Jurong Island.
frankly i don’t really see many things at all that say “made in singapore”
It is not much different from all the European, US and Japan car companies do in Brazil. Brazil has high tariffs (for pretty much everything imported) so companies set up local factories to make the goods. Thing is those factories are not factories, they are assembly lines, minimal amount of engineering or even manufacturing happens there. The only big difference is that those goods are kept internally in the Brazilian market, they are not re-exported out as far as I am aware.
Apple also has a factory in Brazil that makes most (all?) of iphones and ipads sold in Brazil. Most appliances companies (Bosch, Eletrolux, etc) in the local market also do the same.
Both Canada and Mexico are guilty of this. For years they would import products and do some light assembly and label it as Made in Canada or Mexico. Since Canada gives China Most Favored Nation status, importers can avoid duties and export into the USA since there is a Free Trade Agreement(NAFTA). It took a while for US Customs to crack down on this but it finally did and they now pay very close attention to where the origin of the item was. Unfortunately it went on long enough to destroy many American industries. Canada and Mexico made 100's of billions of these schemes at the USA's expense.
Is the problem Canada and Mexico, or is it corporations and business elites exploiting loopholes and abusing the system? Manufacturing in Canada was destroyed by competition in China.
The root issue is the unchecked market power of businesses and the complete lack of repercussions for corporations and business elites that destroy industries, social systems, and deplete natural resources—without accountability for long-term consequences.
You could also make the opposite argument. If you want to manufacture things in the US, the real estate costs too much because of artificial housing scarcity, the tax system favors international supply chains over domestic ones, the regulatory environment favors large incumbents over small/new companies, etc. And if you make it disfavorable to manufacture things in the US, you create the incentive for corporations to do whatever they have to do to manufacture it somewhere else.
Don't think of corporations as having agency. Think of them like beasts that have to be herded into the field where you want them. If all your cows are in the neighbor's field, it's not the cows that you should blame and yelling at the cows is not going to help you.
You're speaking my language. Incentive-based programming of behavior drives optimization for rewards. For example, giant anticompetitive firms dominating our economies create corporate environments that shape executives to prioritize short-term profits by exploiting their undue influence to inflate their own compensation. This behavior depletes natural wealth, sacrifices long-term opportunities to more competitive firms abroad, and even jeopardizes their companies’ sustainability. Boeing and Intel are prime examples of how executives optimizing for short-term gains leave behind destructive long-term legacies.
Governments, too, create regulatory, taxation, and broader economic frameworks that influence incentives and shape behavior.
I feel like the biggest problems are legislative incompetence and corruption. You have people proposing laws without considering how people will respond to them, or choosing a "compromise" authored by the perpetrators of the original offense.
People say things like "corporate profits are too high, we need to tax them more" but the actual reasons corporate profits are high are lax antitrust enforcement and regulatory capture and the proposed tax increase would apply predominantly to domestic businesses, increase the incentives for offshoring and create even more advantage for large international corporations. But tax increases are popular in Washington because then they get more money to transfer to cronies, so it keeps getting proposed as a "solution" instead of solving the actual problems.
the real problem is this poorly planned effort to make the US a manufacturing nation via political fiat in the face of all reason rather than accepting economic realities about comparative advantage in manufacturing
The US was once a manufacturing powerhouse and, in theory, could become one again. Working-class people understandably want their jobs back, and you can’t blame them for being taken in by false promises to bring those jobs back.
But the harsh reality is that creating a regulatory, taxation, and broader economic landscape attractive to manufacturing would inevitably threaten elites and firms at the top of the economic hierarchy. While there’s nothing wrong with that -- in fact, it’s likely healthy for the economy -- it won’t happen[1]. Those elites and anticompetitive firms abuse their undue influence to subvert democracy and shape laws in order to further entrench their market power.
[1] Or more precisely, it won't happen soon. It's pretty clear that the era we're in is coming to an end but change will likely be slow unless there's a surprise shock to the system.
CKD/SKD is the legal version of this tactic. It's not new. It's a great way to get around tariffs though!
This way of working is marketed as such by Chinese manufacturers. They will refer to it as something along the lines of: Made in South East Asia. Sometimes they produce the products in (e.g.) Vietnam, but more often than not, everything is done in China, then shipped to Vietnam for packaging or adding a "Made in Vietnam" label, and shipped out from there. Thailand is another upcoming player in this scheme.
Large companies are well aware of this and happily use their existing Chinese suppliers' SEA entity to avoid sanctions and tarrifs, or to show that they are moving away from having everything Made in China.
To be fair, only gullible or naive people could truly believe that products coming from any part of Asia are not made, controlled, or otherwise influcnced by the Chinese.
Do you work in manufacturing?
In my experience, no, companies are generally not aware and not accepting of this and brands/licensing requirements ensure that's the case. For sure in regards to valuable trademarks.
A manufacturer would absolutely not want to risk their entire business. And that's all it takes for a brand to pull your license. Now what? Everyone is fired and a $120M contact is lost over a few cents per unit.
It's possible that it happens as Chinese factories skirt the rules and make false presentation, but manufacturers spend a lot of money to send someone to many countries and factories to trial and vet them over the course of years to meet brand requirements for licensure before they begin manufacturing with them and often through repeat checks during the manufacturing process. But I'd say that's rare, again, in regards to branded goods of valuable trademarks.
"or otherwise influcnced by the Chinese"
That last statement makes it almost meaningless. Then you can also say, no product on this world was made without US influence. Otherwise all those countries like Vietnam do have a agency of their own (Vietnam for example even succesfully fought china before with military)
And south korea and Japan (and Taiwan) also are somewhat out of the direct control of china.
The country am from is neither in Asia nor influenced by China. People do it because there is money in doing it, simple as that. Chinese accept it (they sell low what other people sell high) because regulation/tariffs put them at a disadvantage and they just have to suck it up.
Huh. For all the claims that US manufacturing is down, it does seem that if we adjusted per-capita it's on par with China based on the figures presented here, which I really didn't expect to see
I'm no expert and of course I have no clue if it even makes sense to measure per-capita manufacturing share, and also assume a lot of other factors matter here - what kinds of things we're manufacturing, how much those products serve domestic versus export markets, etc - but it's still surprising
You might be surprised to learn that manufacturing is larger industry in the US than our tech industry, or that our domestic oil industry is even larger. America produces more oil than any other country.
America was the world's factory for over a century. This dominance only ended around 2010, when China took the lead. It was our advantage to lose, and it was the result of deliberate political action. We offshored manufacturing, and treated China as a good faith trading partner, waiting decades for a cooperative international trade diplomacy that has not materialized to this day. All the while Beijing did everything in its power to enrich the Chinese worker, no matter the cost to outsiders. The results speak for themselves.
> All the while Beijing did everything in its power to enrich the Chinese worker, no matter the cost to outsiders. The results speak for themselves.
In fairness, during this period, the US did everything it could to suppress the wages and benefits of its own manufacturing workers.
Recall that the first rounds of manufacturing outsourcing were to US states with non-existent labor protections, mostly in the South.
The only way to protect wages in the face of competition that works for 1/10 to 1/3 the rate is to institute protectionist policies. That has also been unpopular because there's money to be made in offshoring as well. Americans are getting the worst at both ends, and only experiencing short-term benefits of having cheaper goods.
Some people don't like protectionism because in the long term it's worse for both countries. You have a short term benefit of protecting a handful of jobs in exchange for vastly more expensive goods for everyone as well as more expensive inputs to your other products undercutting other local industries. Protectionism is popular because the benifits for the few are visible while the downsides are diffuse but add up. And in the end your business ends up going out of business anyway like the Soviet factories
> Some people don't like protectionism because in the long term it's worse for both countries.
I keep seeing these statements on here and they're utterly misleading. Protectionism is a spectrum. It is practiced by every single country. It's a very bold assumption to make that if every country would completely eliminate everything resembling it, this would benefit everyone. The opposite is very likely. There are numerous cases of protectionist policies where the country instituting them very clearly benefited from them, even in the long run. I have spent more than a decade in two countries, each having been on a different part of the protectionist spectrum since many decades ago. It is clear as day that the more protectionist one has, throughout, continuing to this day, seen very large benefits from this policy, larger than the benefits from the less protectionist country.
We really need to stop propagating this myth among the educated in the West, it's just as harmful as "trickle-down economics" used to be before it became common knowledge that it's a fairy tale.
> Some people don't like protectionism because in the long term it's worse for both countries.
That is a good argument from a purely economic perspective, but the ability of a country to manufacture things on their own is a long-term benefit to the country from a security and sovereignty perspective. It's hard to prevail in a war if a potential enemy is making all your stuff for you.
China understands this very well, which is why they spend an enormous amount of effort and resources building up domestic alternatives to manufactured products they still rely on non-Chinese sources for. Comac may or may not become globally competitive with Boeing or Airbus, but that's not really the point of the venture. China wants domestic aircraft expertise and capacity because it's critical to have and they don't want to be reliant on the US or Europe for it.
> Some people don't like protectionism because in the long term it's worse for both countries. You have a short term benefit of protecting a handful of jobs in exchange for vastly more expensive goods for everyone as well as more expensive inputs to your other products undercutting other local industries
Expensive goods only result from half-assed protectionism. When governments go the whole nine yards, such as with China's PV and EV industries, or the US with agricultural subsidies, it results in very cheap products and inputs to other products. Corn syrup is an ingredient to a lot of American food items because it's a cheap sweetener due to all the subsidies as the government decided, many decades ago, that American farmers should be shielded from competition. Some decisions make sense in the realm of national strategy and geopolitics, and not pure economics. The US would be very different if it had started to import the bulk of it's corn from Ukraine in the late 1990s
It depends. We can say that China’s industrial policies are a kind of protectionism as well in that they are willing to pay for extra cost for domestic “national red supply chain independence” rather than relying on the “comparatively advantageous” western vendors. And they did get excellent results. Note that industrial independence is exactly the opposite of free trade and that has been a long sought national goal by China.
Regarding tariffs on China exports, the relatively fortunate position for the US is that the biggest components in consumer inflation index such as food, housing and energy are all either largely domestic produced or not dominated by China, which gives more room for the US to react. But the tariff could still harm the gross margin of the international enterprises and even SMBs, who are facing the immediate pressure of adjustment during the trade war.
What the heck? When did this sort of economically irresponsible thinking become so mainstream?
The benefits of protectionism are what are short-term, but they leave both us and China materially poorer in the long term. Life today is better than it was in the 1950s — and a large part of that is knowing our comparative advantage and leaning into it, not trying to restore long-dead industries by political fiat and throwing trillions in good resources after bad initiatives.
If we want to help workers who are struggling - then tax more and redistribute more. Don’t throw a wrench into mutually beneficial trade (and completely sabotage our critical climate goals while we are at it, it makes no sense that we treat BYD the way we do).
>The benefits of protectionism are what are short-term, but they leave both us and China materially poorer in the long term
The horror of one's main geopolitical rival being poor and technologically behind.
>What the heck? When did this sort of economically irresponsible thinking become so mainstream?
It's not "irresponsible" to deny the existence of some utopia where everyone's interests align. It's not worth competing with virtual slave labor. A perpetual race to the bottom is not what we should be striving for. With our current standard of living, or even half of it, we don't make anything that is going to be economical to export in the long run.
>The benefits of protectionism are what are short-term, but they leave both us and China materially poorer in the long term.
You're not entirely wrong. There is a cost to duplicating effort. What is the cost of not being independent? Your country's sovereignty and maybe your life. Let us take care of ourselves as best we can and import only a small amount of stuff.
>Life today is better than it was in the 1950s — and a large part of that is knowing our comparative advantage and leaning into it, not trying to restore long-dead industries by political fiat and throwing trillions in good resources after bad initiatives.
I think many would argue that life is worse today than it was in the 50s. Sure we have more consumer goods, but housing is unaffordable and many people are working well beneath their capacity at meaningless make-work jobs in the service industry. The "long-dead industries" you speak of are alive and well, just not HERE. Not because others are necessarily doing those things better either. It is all about labor costs and regulations in conjunction with international competition.
>If we want to help workers who are struggling - then tax more and redistribute more.
First of all, many aren't working at all because there are no good jobs for them. Second of all, what exactly are we going to tax if everything is offshored consistent with the current trend? What are we going to buy our imports with, the land under our feet (which is finite and also our home)? Increasingly worthless paper, promises to drop bombs or not drop bombs somewhere, etc.?
>If we want to help workers who are struggling - then tax more and redistribute more. Don’t throw a wrench into mutually beneficial trade (and completely sabotage our critical climate goals while we are at it, it makes no sense that we treat BYD the way we do).
Oh yes, nothing more critical to cutting pollution than shipping giant logs to China to be turned into toothpicks. Give me a break. It makes total sense that we treat BYD the way we do. It is unfair competition that would destroy one of the few industries we have left, and China isn't exactly eager to buy cars from us (nevermind that they cost too much for the Chinese anyway). We might all be better off if every country produced what it could. It may lead to new discoveries in design and production methods. And if international trade was not an issue, countries could freely copy each other's IP for domestic use. That last part might be too optimistic but monopolies create stagnation.
> All the while Beijing did everything in its power to enrich the Chinese worker
i am not sure that the CCP is doing anything to enrich the average worker, and in fact, is probably doing the very opposite - making sure the chinese currency is constantly and artificially debased to make export more competitive. This results in lower wages for the workers. It is why there's low demand for goods/services in china.
The money being earned by these exports is kept mostly by the gov't - to be spent on whatever they think has priority, which mostly have been on infrastructure, supporting industry the party deems important etc.
The average income in China has doubled over the last decade.
Much of China's exports comes from private companies, so no, the government does not keep the money. Even state-owned enterprises have their own balance sheets and don't just transfer everything to the government.
And finally, China's currency has actually been overvalued at various points. The central bank has intervened in both directions, not just to suppress the value of the currency.
> You might be surprised to learn that manufacturing is larger industry in the US than our tech industry, or that our domestic oil industry is even larger
US oil and gas industry has $240bn in annual revenues. This is about comparable to how much Americans spend at Apple (almost $200bn)
The number you quoted for oil and gas revenue is quite low.
ExxonMobil alone made $300 billion in revenue in 2023.
Even if you look at oil majors that only operate in the US - Marathon had $170 billion in revenue in 2023.
I don’t think that you’re correct about US O&G revenue.
The US produces 13M barrels of crude and condensate per day: https://www.eia.gov/todayinenergy/detail.php?id=61545
The lowest recent spot price is $69.5: https://www.eia.gov/dnav/pet/PET_PRI_SPT_S1_D.htm
This tells you that annual production of just crude oil is > $300B/yr. The US also has plenty of downstream processing after production (https://www.eia.gov/dnav/pet/pet_pnp_unc_dcu_nus_m.htm), which means that total annual revenue must be significantly greater than this.
The oil industry is not larger. I believe oil and gas is not even a separately measured category so the numbers you're getting are probably including many sectors across the board and are quoted by some vested interest like the American Petroleum Institute.
Point of Order: there was very little in good faith with the offshoring of manufacturing either in the domestic propaganda produced to drum up support for the initiative or the intention to dominate Chinese society with western consumerism.
> It was our advantage to lose
That's bullshit. China is more than 5 time larger than the US, so you really expect them to build fewer things than you forever?
If you think that autocratic regimes enrich the common workers, I have a bridge to sell to you.
> it does seem that if we adjusted per-capita it's on par with China based on the figures presented here
Ironically this will make Taiwan the manufacturing superpower if it is calculated per-capita. Which is the other china (I am just referring to the history of both PRC and Taiwan claiming to be the historical China successor).
And the claims that US manifacruting is down is correct because it used to be much higher percentage wise from the world total manifacruting power. China was only about 3% when people who are now 30yrs were born. That's massive increase in manifacturing share. There is a discussion about domestic vs export in the study too that you might find interesting..
> (I am just referring to the history of both RPC and Taiwan claiming to be the historical China successor).
Semantics, but the ROC (Republic of China) claims Taiwan, along with the mainland and Outer Mongolia. It isn’t the case that Taiwan claims the ROC (although if the in power DPP decided not to be the ROC anymore, the PRC would probably invade since declaring independence from the ROC would be the same as refuting one China).
When the ROC/KMT retook Taiwan in 1946, they weren’t exactly seen as liberators. And when the KMT and a bunch of rich mainlanders relocated there in 1949, there were protests, genocide, and so on.
Some manufacturing is down. Look at the state of sophisticated shipbuilding.
The US Navy has stated numerous times that the US essentially has minimal capacity. Maintenance and construction are years behind schedule. It isn't about funding. 40% of attack submarines aren't fit for service or deployable. The new Columbia class submarine will use a new steam turbine. Northrup Grumman was selected for the manufacture of the steam turbine in 2014. It isn't ready yet.
Sophisticated manufacturing is in crisis in the US. It's the reason that the US bigfooted France in the AUKUS submarine deal. To revive a failing industry.
These are interesting tests due to there are restrictions on sourcing of parts and personnel for a project.
https://news.usni.org/2024/04/10/late-turbines-have-major-im...
https://news.usni.org/2024/04/10/late-turbines-have-major-im...
There is also the USS Zumwalt type problem.
We spent $22.5 billion to get two active.
Imagine what $22.5 billion USD buys in Chinese manufacturing capacity.
$22.5 billion would be 2 million Teslas Y, but from BYD.
Gross production is sales $$$, it's not actual output of widgets. I imagine if measure gross production by some units of stuff made, PRC would be far ahead.
Yes, but $$$ is the currently the most accurate metric of "units of stuff" by their usefulness. At least there's no other widely used metric. So $$$ is the most correct way to measure the output.
I think it's just the simplest (also default*) way of measuring, which doesn't mean it most correct or accurate. If PRC makes 5 cars @10k for every 1 US car @50k , and each PRC car is 80% as good, which metric do you use to measure gross manufacturing. Most people would say the guy that makes 5 cars. They might say the guy that makes 1 car if the 5 car guy's cars were 10% as good. What if its 3 cars that is just as good as 1 car charged at 3x. Across the board you have made in America stuff that's a little to a lot better (or worse) than PRC stuff, but cost 2-5x more.
* by default I mean, these metrics/calculations are downstream of national accounting methods, i.e. most of world standardized on UN SNA which measures "value" as in $$$ vs something like (deprecated) soviet material production system (MPS) that measures physical material widgets produced.
One proxy metric is PRC container throughput of her ports last year was ~300 million TEU vs US is about ~60 million TEU (with slightly higher ratio of empty containers).
The price (that consumers are willing to pay) is the only decent proxy for quality we have. Quality, of course, includes consumers’ preferences.
If the one car sells at a market price of 1/5 of another, then the only reasonable conclusion is that, as judged by consumers, one car is worth 5x as much as the other, and therefore is 5x better.
That’s what market prices are: the collective valuation of goods/services and their alternatives. Of course, the market clears at a price that is a combination (you can think of “average”, but that arithmetic is not the process by which prices are discovered) of the preferences of all consumers in the market.
If you have a preference that goes counter to the market, e.g., if you do not think those two cars are 5x different in quality, then there is a great deal for you!
If you think the worse car is only 2/5 the quality (rather than 1/5), then you can get something for half the price you’d be willing to pay if the rest of the market agreed with your preference.
If, on the other hand, you think the better car is 10x the quality of the worse car, then the same “deal” is true for you. You’d be willing to pay 10x the cost, but you only have to pay 5x the cost.
There are plenty of good macro and micro econ courses available for free if you’d like to dig into this sort of thing more.
If that was true USA would export its industry produces, but the rest of the world mostly don't want what USA makes, meaning it isn't actually worth that much.
Maybe true. But how do you get quality into the equation.
Is all the garbage on temu/shein also part of the gross production KPI? I couldn’t care less about these cheap plastic widgets.
Some don't, but many do. Does a 600k NVIDIA AI rack provide as much value as 600k worth of commodity solar panels, or 10,000 entry level mopeds? Most of the world (developing) benefits more from commodity widgets.
Fair. But isn’t that exactly what money is there for?
You can objectively compare the value (to the world in this case) of two very different set of items.
1.) The article is from January 2024.
2.) Some of the data that it's based on is up to 2023. And some are up to 2020
3.) There has been massive movement of manufacturing out of China between 2020 and 2024. I won't provide the references here, as there are too many to mention, from Japanese/Taiwanese/South Korean/European/American companies. They are easily chatgpted/googled. Also the reason why Shenzhen and Guangzhou has suffered deeper drop of real estate price and employment.
4.) In 2024, Mexico was the biggest exporter to US. United States was the biggest exporter to Europe. US was the largest export destination of Japan.
5.) Trump's 60%-100% tariff on China will accelerate the exodus of manufacturing
Again, I really don't feel qualified to weigh in on most of these matters, though I will say that I generally do prefer direct citations if you'd like me to take the epistemic credibility of a claim more seriously than any other thing someone on the internet said (in other words, saying "go look it up" provides no more additional credibility than simply making the statement, and is thus kind of pointless, and in fact you take a not insignificant epistemic credibility hit for my purposes by suggesting that asking an LLM for factual information should be taken as a reliable source)
That said, it's interesting to see how the supply shocks of a global pandemic can shift these kinds of relationships. It doesn't surprise me that Mexico, being a huge source of food for the US, is the largest exporter to it. What I do wonder is how much exports pertain to manufacturing relationships. Like in the case of Mexico -> US, I think we wouldn't count e.g. stuff we buy for the produce section to be manufactured goods, but that would still count toward import/export numbers. Does this apply to other things too? Do things like IP count?
Very comprehensive list of how China has lost export power to US over the years. Remember that US has the largest consumer market in the world, more than double the second place, EU. https://en.wikipedia.org/wiki/List_of_largest_consumer_marke...
https://www.forbes.com/sites/kenroberts/2024/06/25/us-import...
- Chinese imports into the United States are down 19.78% from April of 2018 — when Trump first started imposing tariffs — to today, or $31.88 billion.
- Cell phones: Big winner is India. China has gone from a market share of 63.59% in 2018 to a still strong 42.14%. That’s a decline of 33.73%.
- Computers: Big winners are Taiwan, Vietnam. China has gone from a market share from 53.45% in the first four months of 2018 to 28.11%, a decline of 47.40%.
- Furniture: Big winner is Vietnam. China, meanwhile, accounted for 23.55% this year, down from 48.54% in 2018, a decline of 51.49% compared to a gain of 88.67% for Vietnam.
- TVs and monitors: Big winner is Vietnam. Mexico overtook China as the import leader in this category just before the pandemic and has remained on top. It gained market share from China, which fell from 53.68% in 2018, when it was No. 1, to 33.64%, a 37.32% decline.
- Digital storage devices: Big winners are Korea, Vietnam. China accounted for 39.50% of those imports in 2018, more than double that of any other nation. In 2024, its percentage is 4.23% and it ranks No. 9.
- Digital cameras: Yep, Vietnam again. China, meanwhile, has seen its share go from a majority, at 50.09%, to 17.57%, a decline of 64.92%.
> TVs and monitors: Big winner is Vietnam. Mexico overtook China as the import leader
This doesn't make sense to me, do they do some high level assembly of components? I think China took over global market of TV panels manufacturing for example:
With this transaction, Chinese manufacturers’ market share of the LCD panels used in TVs will increase from 66% to 72%, with nearly 100% share in ultra-large 90 – 115 inch screens.
The market share of Chinese OLED panel manufacturers is forecasted to increase from 47.9% this year to 50.2% next year, surpassing the OLED shipment share of Korean companies.
https://www.forbes.com/sites/willyshih/2024/10/13/chinese-ma...
It sounds like it could be that China losing in cheap assembling tasks, but significantly gaining in high tech manufacturing.
That sense to be possible thesis esp given a comment earlier about china effectively laundering some goods to countries with deficits to china
As with anything it’s useful in context, but it does discount the labor force advantage China has in pure population numbers.
this is amazing and filled with facts that i wish everyone arguing the point that china cant overtake U.S. in economy or world superpowers would read. The facts are there, there is not much hiding around the corner, all of the true indication is in front of us. Yes. the article states U.S. still holds the title for world superpower by military size and capabilities. That's not to say that china cant catch up in no time with U.S. military. That's if they decide to do so. i would ask does the Chinese republic need to invest heavy in this sector in order to grow? Clearly not from the facts. in fact that's the very same thing we should have been doing all along.The U.S. has spent enormous amount of capital to fund wars and foreign relational activities.
China has a great way going about this. making friends with less developed countries that U.S. overlooked. China is looking for something specific. Just as U.S. is looking for something specific as well. To be totally honest I am not entirely sure what the U.S. is looking for when engaging with other countries, other than the same narrative for the fear of not having safety blah blah. This time that was spent on these adventures the U.S. cannot get back, while also injuring foreign relations.
there is a clear sign that the U.S. government is confused and has a gun with no-where to aim. All the policies and efforts are accelerating the U.S. into deterioration. The U.S. has some strong sector for the sake of this reply i will mainly say that attacking the top tech firms and industries with regulation will only push them out to more favorable grounds give new room for industries to form in more favorable grounds other than U.S.. the solution must solve the problem that brought the solution to existence.
I don’t think it’s necessarily so clear that Chinese foreign policy has really paid off yet.
Chinese loanmaking to foreign countries has mostly gone bust, with many loans basically in default. While it’s true that Western development agencies were not lending to these projects, they mostly weren’t doing so because they were doubtful of the business cases of said projects and the likelihood that the government could actually pay off the loan, and so now China is dealing with that.
One of the most direct Chinese relationships is with Myanmar, which has not only gone to hell in a handbasket but now is a hotbed of criminal activity by Chinese organized crime abducting Chinese nationals to work in Myanmar. So that’s not great either.
> Chinese loanmaking to foreign countries has mostly gone bust, with many loans basically in default.
As America (or the world bank/imf as a proxy for american capital) can attest, calling in these loans is a great way to make a lot of enemies.
The problem in China's case, is that there's a lot of evidence that China doesn't even care whether or not it's paid back. One, the loans were given often in dollars. Which China found itself with a surplus of the past few decades. With no convenient way of ridding themselves of those dollars without significant pain, Chinese strategists hit on the brilliant plan of "loans". Two, and more importantly, the loans were used to finance Chinese influenced infrastructure projects.
So for instance, most of the African loans financed things like ports, and roads, and bridges, and trains, etc. Well when you look at the map of the "where" and the "what", it's easy to see the "why". All these bridges, roads and trains lead to the ports. Sure, this allows African countries to move their resources, and sometimes even finished products manufactured in these nations, to ports for delivery to "international clients". (Read, "China"). But tell me this, will the Africans own the freighters? No. The Africans will move massive amounts of products and resources to their ports, likely in the EAC, then China will pick up all that bounty and move it to China.
Sounds a lot like "harvesting" doesn't it?
There's one case where the Chinese definitely don't care whether the loan is repaid or not. They only care that all the bridges, roads and trains financed by the loan go to the ports. In fact, I don't know if the Africans realize it, but they'll be paying the Chinese more than the value of the loan just by using the rail and roads. The entire infrastructure system they've built only facilitates one thing, moving resources and products to the ports.
Is it good for Africans? Absolutely. A much better deal than they used to get when the West and Russia used assassinations and proxy wars to ravage the place. But let's not pretend it's about helping Africa. It's, at root, about an extremely low risk method of helping China by "loaning" money to others.
This would have been my response to the this ^ reply. They have capital to spare and also, what they're gaining from these countries in return more than justifies there loss in capital. the gain exclusive rights to ports and military presence. recently they made a an effort to include African countries as their allies. Concluding that they will allow African countries to retain control over there capital wand profits while allowing china to export their natural resources. this is attractive for African nations.
It’s worth noting that while some of the dud Chinese loans are for resources and whatever there are also plenty of nonperforming loans for projects that couldn’t possibly be useful to China, like the Montenegrin highway to nowhere: https://www.rferl.org/a/montenegro-billion-dollar-chinese-hi...
One other interesting note is that the way the financing is structured, the loans are not coming from the Chinese state but state owned banks, which seems like a mostly pedantic distinction, except the state owned banks also do much of the normal lending activity within China itself. Those banks now face the double whammy of dud property loans domestically and these dud loans to other countries, which is not helping the Chinese economic slowdown.
roads and bridges to ports are exactly what imf and world bank loan do too, for obvious reasons
frankly this whole comment reads as historically less informed
most countries want to feel respected and included in the world. They don't just want you to take their resources and leave them in the dust. Even if the thought is " hey we'll fix your stuff in return then so be it". U.S. lets you know that the moment you don't go as planned and disagree with their view then bye bye to all of he efforts your country put in and momentum. Lets not forget economical momentum is just the thing a less developed country needs. One strategy doesn't work for all. This is clear from whats happening right now before us. Brics initiative, Brics plus and so on. you literally have the worlds biggest countries aligned for a parallel agenda. Brazil, Russia, India, China, and South Africa and even more are joining like turkey and some European countries. This is not small matter to overlook and be arrogant about.
And how many world bank loans are given to, well, let’s call them “less than stellar” African governments?
All the Chinese needed for the infra loan projects to work were nations who couldn’t access financing via other means. Now they’ve been doing it a while, even the nations that can access the financing have been dipping into that well. Sometimes it’s just better terms.
The World Bank and IMF generally don't (and can't) call in loans so I don't know what you're trying to say there. Sometimes what happens is shithole countries default on their debts and then whine about injustice when lenders refuse to extend the terms.
It is injustice. Loans are not just social mechanisms to begin with. There's nothing "just" about the west's domination of the globe; and in fact, justice would look like the west paying out to the rest of the world and expecting nothing back.
Not that the west ever gave a fuck about justice beyond intraclass squabbling
It's been argued that if you observe actions and not words, default has always been the point of IMF loans. Have you read Confessions of an Economic Hitman?
The IMF is by definition the lender of last resort, when banks and investors find a country so fiscally irresponsible that they cannot access reasonable funding. It is not exactly surprising that those kinds of basket case economies also fail when given IMF loans given that people predicted they were going to do that and stopped lending.
I think that generally if you read the internal documents, most of the people behind IMF and other global development loans are operating in good faith and not simply puppets of the political agenda of the west. I think they showed clear overconfidence in their policy prescriptions, but not out of malice
If you can't tell Confessions of an Economic Hitman is a work of fiction I don't know what to tell you.
You don't need to read the book to see the role the world bank plays in preserving worldwide power structures. The entire world can talk to each other outside the american media sphere, you know!
Also don't forget U.S. debt to China. the picture is painted clear of who depends on who.
China has $774B of US debt. The US total debt is $36T. 2% is not control of anything. That is smaller than the daily trading volume. China used to hold more but sold it recently.
My apologies I meant the other way. like what you said.
Yes, China engages diplomatically and financially with countries that the U.S. fought and then leaves. Since the withdrawal from Afghanistan of course China appeared instantly:
https://www.wilsoncenter.org/blog-post/mining-influence-chin...
Now the U.S. is fighting for minerals in Ukraine. Rare moment of truth by Senator Graham:
https://responsiblestatecraft.org/lindsey-graham-ukraine/
This of course could have been achieved diplomatically by cooling down the NATO tensions. But no, another proxy war must be fought that likely will be lost like Korea, Vietnam, Afghanistan, etc. The Chinese do not fight and profit from all of this.
Pretty sure the parent is talking about overlooked nations. Nations no one even fights a war over. Probably referring to things like China going "all in" on under-developed African nations.
It's a very "Eastern" strategy. Avoidance and Trade.
Korea is not the best example to prove your point. SK is per capita equivalent to Japan[1]. The Korean War was a tie and in the long run it’s clear which side is better off.
[1] https://www.economist.com/graphic-detail/2022/02/01/by-one-m...
and now Russia (Russia takes step towards recognizing Afghanistan's Taliban government) https://www.reuters.com/world/russia-takes-step-towards-reco...
China had everything going for it for couple of decades. Other countries were happy to outsource manufacturing and invest for the sake of access to the the Chinese market and under the assumption that great power conflict with China was very unlikely. None of those things, broadly is true any more.
China has more than 3X the population of the US, so it only needs a bit over 1/3 the GDP per capita to overtake the US. I can’t imagine that not happening unless China really screws up.
Overtaking the US on GDP per capita is much further away.
> everyone arguing the point that china cant overtake U.S. in economy
Surely nobody halfway serious is arguing that. The faction about to take power in the USA is tilting at the "woke ideology" windmill, talks openly of deporting a big chunk of the workforce and does not seem to understand how tariffs work.
Even if you ignore all that, China has 4-5x the population (for now!) and is by all measures has a highly developed, productive and growing economy. What argument can there possibly be in favour of China falling back, other than maybe the aforementioned demographic issues.
The demographic issue is the big one.
But there are several others that show up in serious financial circles. Particularly the domestic fiscal policy around debt and investment, currency liberalization and entrepreneurial risk vs reward.
The Chinese government is walking a very fine line with their private enterprise policies and it’s not one that is well understood. But there is quite a bit of concern that if China gets more autocratic it may hinder further productivity and growth (right as the demographic issue hits in earnest).
Chinas total population isn’t really that relevant for what their economy will end up looking like. China is essentially a handful of moderately wealthy coastal areas (perhaps comparable to USA in population but still far behind in GDP/capita) and a huge inland area of very poor people. There’s not much reason to think all those 100s of millions of people will become as wealthy as the average American or European any time soon. It’s not just demographics. Geography is a huge challenge as well. I don’t know if China will “fall back”. But stagnation seems very likely. If they backslide it’ll probably be due to some political turmoil, like what happened in when the Soviet Union collapsed. Nearly impossible to predict. If you look at what’s happening with regular people inside China, there does seem to be a sense that things are getting worse, not better. I have friends with family in China that said exactly that this New Year’s Eve.. There’s a lot of incidents with people driving their cars into crowds of people as a revenge against society, and other similarly worrying signs. Many factories are being moved out of China. It might not be enough to show up on statistics yet, but it’s a process that has undeniably started and will probably accelerate. China has a huge bet on batteries, EVs and solar panels to make up for what they’re loosing. That’s going really well right now. But I don’t think it’s a winning strategy long term. USA and EU seems to be wanting to protect their industries and on-shore or near-shore a lot of that stuff. The manufacturing of those things are highly automated. Eventually most of the materials will come from local recycling. China could get a very strong and balanced economy if they had a good strategy based on self sustainable local consumption, rather can just export. But I just don’t see that they’re taking that seriously. Most of the policies are still geared towards supporting/subsidising higher exports.
This will balance its self out. One thing they have we don't is monopoly control they allow you to have monopoly if it serves well. we have that but we turn on monopolies when they get too big, they were already too big when they attached the name monopoly to the big players. i suspect if we look at data going back thirty years you will see the gap far bigger and now the gap is rather widening or growing with each end of the gap getting thicker. what i mean is, the poor were really really poor and now we can look at data and say that they are just poor with avenues of fixing that issues. They do have the economies within their country to fix poverty as its far more fruitful versus the U.S.. you either work in fast food or have a masters degree making $70,000. this isn't great considering the U.S. is a rich country
I don't understand those that argue this point. What are the facts you have and evidence that U.S. has the capabilities to match growth that of China. Its so beyond explaining that i would just agree and walk away. China is a modern marvel the growth within thirties to date is remarkable does not matter if you don't agree with their government. They mean business right now!!
This so much. If America was serious about fighting China they would be signing free trade agreements with Asian countries and investing money into Africa.
Instead Trump is angrily tweeting about how he's going to make everyone pay. The racist isolationists are back in the halls of power.
Trump reminds me of a Star Wars quote
"The more you tighten your grip, Tarkin, the more star systems will slip through your fingers"
The reality is that China will not magically disappear and they have integrated themselves into the world economy.
What do you mean, Chinese foreign policy is an utter train wreck. All of their neighbors hate them.
>attacking the top tech firms and industries with regulation will only push them out to more favorable grounds give new room for industries to form in more favorable grounds other than U.S
Let them go, someone else will step in. Yes it will be inefficient as someone else ramps up, but companies that are only here to repeatedly hold the country hostage to get out of sensible regulations are a threat to the population's security. China will eventually abuse its population to the breaking point.
You're showcasing the "false equivalence" fallacy - you're comparing apples to oranges.
1) Autocracies are fundamentally unstable and need extreme violence to prevent dissent and dissolution. Autocrats basically steal from people at the bottom who in turn are less incentivized to give their best performance. Democracies are much more stable due to acceptance by most people who live in them and much more fair sharing of profits.
2) Due to their inherent instability, autocracies have a very high incentive to fake numbers.
With this background, I think your arguments are for the trash can.
I generally agree, but “China is doomed because autocracy” has been on the media since 2000s. There’s been literally two new generations of people that have been born. The country seems fairly stable as of now.
I bought two things recently: some temperature sensors for a smart home and some cable clips to hide some wiring under a cabinet.
Both were mass produced in China and both shipped with 3M branded adhesive mounting pads. An apt and literal representation of global manufacturing — US made chemicals, Chinese electronics, one clinging to the other.
If one assumes that those 3M strips are authentic branding... I haven't come across a single tape that offered the expected brand quality.
When I visited China some years ago "3N" was also popular. Same logo font and color, but at least they tried to avoid blatantly infringing the genuine brand.
I imagine most courts in the US would, in fact, find “3N” as blatantly infringing the 3M trademark.
They sell "3N" within China and the US can't really do anything about it.
I said "tried" because in fact 3M filed lawsuit in China against Huawei (which manufactured the 3N products). Surprisingly, the Chinese court found them guilty of infringement and even awarded damages to 3M.
Totally understood and not under debate. I could have been more clear.
"3N" is blatant infringement, or at least would be understood as such in the US. China simply doesn't enforce trademark infringement in the same way. I am not opining on whether China should.
I think there's no denying that this is super impressive. Realpolitik aside, well done China.
I wonder how manufacturing output compares between China and US+EU, say. It doesn't make that much sense to look at EU constituents in separation. Even then I suppose China is ahead, but maybe it's not a total wipeout.
That led me to wonder about manufacturing output vs GDP. Is China producing more, after adjusting for its total GDP. So for example, China's GDP is about 4-5x bigger than Germany's, whereas the fraction of manufacturing output is about 5-7x different. It still puts Germany "behind" but it's not outright domination.
In fact, such fraction, of manufacturing to GDP, is a basic economics measure: it's the fraction of GDP coming from manufacturing! And it's no surprise to anyone that this fraction is high in China.
So then I guess the questions would be:
- is manufacturing expected to outperform the other constituents of global economies going forwards (i.e. is China smart putting its eggs in this basket)
- is the rest of the world at risk because China can squeeze them (perhaps)
- what is the outlook for manufacturing outside of China (maybe not great but it seems like people are waking up to this).
I wonder how much of that simply cuts back to marginal costs of energy and ESG. Presumably in China you can manufacture cheaply partly because you don't need to pay for employee rights or clean energy. Not all of this, clearly, but where would US+EU be if it wasn't constrained by broadly speaking ESG (I'm not saying it's a bad thing, but it is a thing).
World War II was won because of US and (less advertised) Soviet manufacturing capacity.
Ukraine is more constrained by weapon supplies, especially drones and artillery, than by manpower.
I'm not sure both sides are playing the same game. In the game I think might be afoot, if your economy is management consultants, therapists, and hair stylists, that's "bad" GDP. Resources and manufacturing are "good" GDP. Resources are complex in that stone are renewable, and some go away when you export them.
I'm not even going to talk about education or, related, R&D capacity.
high finance/management can be quite valuable when you’re trying to plan a conflict. this is how you get the industries developed that are capable of designing a system to turn sand into missile-targeting systems.
i’m extremely skeptical of people’s ability to view the economy from on high and pick out the “good, productive gdp” and the “bad, makework gdp”.
> i’m extremely skeptical of people’s ability to view the economy from on high and pick out the “good, productive gdp” and the “bad, makework gdp”.
Maybe in general, but rent-seeking is a pretty large part of the economy by estimates I've seen.
And unfortunately for the West, manufacturing capacity translates to military capability in any prolonged conflict (which is why industrial policy and tariffs in dual use / strategic industries seem like the way to go)
Any non-nuclear prolonged conventional war will see U.S. ammo and shipbuilding far surpassed by Chinas manufacturing base and it isnt even close. The U.S. plan was to cut off oil shipments and food if this happened. Now China can likely have a Navy capable of guarding oil shipments from the Middle East all the way to Chinese ports. Everyone in the U.S. just assumes that they did it in 1940 so they can just do it again in 2040. It was the manufacturing capacity that won in the 1940s in the first place!
You might be right. But a major 21st century conflict is likely going to be very different from past conflicts and we still don't know what that will look like. We're getting a few glimpses from the Ukraine conflict - drones, social media - but who knows what else. Having a numerical advantage in conventional arms might be the equivalent of having superior cavalry at the onset of WWI
> We're getting a few glimpses from the Ukraine conflict - drones, social media - but who knows what else
Actually, from the assessments that I have read, while new technology and drones have made a meaningful splash, it seems like manpower and the ability to produce large quantities of artillery shells have been the true determiner of the tides. The lesson learned thus far is that considerations from the past still matter.
Well I did say a glimpse. Manpower, food, supply chains and all the basics will never not matter. It's a question of what could be a deciding advantage that did not exist before, like mechanized divisions in WWI and air power subsequently. Russia-Ukraine is still a very conventional land war but it won't surprise me if a future China-US conflict was fought (and maybe even won or lost) virtually as well as conventionally.
In that scenario, they would use Russia rather than Middle East for oil shipments in the first place.
How far in the future are we talking about?
Russia doesn’t have the capacity to transport that much oil by land. It’d take years to build that infrastructure and it’s not even clear that China is at all interested in supporting huge investments that make them that dependent on Russia. Keep in mind that China and Russia are not fundamentally friends.. Russia is still holding territory that belonged to China, and that China wouldn’t hesitate to take back if they saw an opportunity.
Unless they can transport by sea by the arctic route year round (could eventually be enabled by climate change), the only way is to go south. Which is a far more vulnerable route than oil from the Middle East.
you can't look at "Manufacturing" and translate that to military capability. what you manufacture is very important. Nothing china has can compete with the airpower capabilities of the west. A single F35 has the capabilities no amount of chinese planes can match.
While this is true the US military production is mostly in a sad state, especially Naval production as discussed before: https://news.ycombinator.com/item?id=41662831
especially this article https://www.americanmanufacturing.org/blog/chinas-shipbuildi...
so a very fast untested fighter with very limited armament vs. something that can't be detected by any known radar and has flown thousands of combat missions, with multiple different version, including one with VTOL and can do air to air, surface to air, and even nukes?
It wouldn't be close at all. The j20's wouldn't be able to detect the f35 and the F35 can hit it with an air to air missle 350 miles out.
From the Article you linked:
""“The J-20, in my estimation, would be dead long before it had the ability to maneuver against either the F-22 or the F-35. It’s got enough spikes on it to where the radar returns on it are likely to be much more significant, which means that the F-22 and the F-35 can see it a lot farther away.”
It's not about what China did well, but about Europe/US ignorance. How many times you've heard during last decade that software eats the world? That we should do highly profitable software things only anyway? That everyone and his dog should be a software engineer in future? Well, turned out that it was really about free money and it didn't last. Serious question – how many of you who say that they can't find the job any more, have considered manufacturing? https://x.com/zanehengsperger/status/1862134411657117773?mx=...
Software is eating the world, you just need to multi class into the field that software is eating to be of good value.
> how many of you who say that they can't find the job any more, have considered manufacturing?
If one wants a skilled job in manufacturing, they have to earn a qualification first, or go through a period of apprenticeship. The wages for most manufacturing jobs are much lower in the west than for knowledge workers, and openings likely fewer - it's only recently that new manufacturing sites got spun-up after decades of continuous decline- thanks to 2 pieces of legislation from the Biden administration; the Inflation Reduction Act and the CHIPS Act
There is a non-zero chance that these higher wages of knowledge workers and especially in IT industry were actually the results of rent-seeking.
It's not too bad if you consider that China is 17.6% of the world population; suddenly around 30% of manufacturing share doesn't seem that high. However, India at 3% is pretty eye-opening, but this is gradually shifting not just because of the China+1 strategy but due to the larger growing market (read: increase in standard of living / spending capacity / GDP per capita) in India and also government measures such as high import duties on high-volume goods such as smartphone (eg: Samsung's mobiles factory in Noida is the largest mobiles factory in the world [0] (India's market for mobiles (non-smartphones) is still relatively large)).
[0] https://news.samsung.com/in/samsung-inaugurates-worlds-large...
Six nations manufacture at least 3% of the world total.
China is followed by the US, Japan, Germany, India, and South Korea.
Note how the world has changed. Only three of these are long-established industrial economies; the other three are newly industrialised economies.
Four of the G7 don’t make the cut.
It's not surprising: everyone is using the same manufacturing equipment now, due to free markets and trade. So it's only about numbers of workers.
Port capacity and equipment scale, willingness to engage in toxic processing, etc carry far more weight, IMHO.
China has a lock on various electronic production streams by having a lock on most of the rare earth processing and dealing with the low level radioactive waste by products.
One billion tonnes of raw iron ore per year flows from my state of Western Australia to China for steel production - the machinery, diggers, haul paks, massive trains, et al make that happen in a state with a population of only ~2.3 million or so with few of those in mining. 16x peak US iron ore production for steel with a workforce smaller than the US's at it's peak.
China didn't just fall into peak manufacturing capacity by a happy accident of many workers, they (for better or worse) made long term plans and stuck at them - including the reduction in population growth known as the one child policy.
Current Chinese pharma production is a truly bespoke behemoth - it has a massive capacity that can easily make small to order amounts, and again that's due to factors such as education and well automated pipelines.
I can't help but say that Australia is basically the stupidest country on the planet (at least amongst Western democracies, since one could say modern Russia is stupider, but that's a whole another cultural debate). It's like the degenerate alcoholic who's willing to prostitute their mother for a bar tab. A country so blessed with some of the most important natural resources, a country whose geography is synonymous with the word abundance. But nah, they'd rather sell themselves out to the biggest foreign bidder, even if they are from their biggest regional rivals. While Norway and the UAE enjoy the fruits of their resources through strong welfare systems enabled by a resource-driven economy a fraction of Australia's, Australia sold itself so hard its own citizens have to buy from foreign corpos.
> Australia is basically the stupidest country on the planet
Too right.
> It's like the degenerate alcoholic who's willing to prostitute their mother for a bar tab.
Ahh, so you are Australian then.
> even if they are from their biggest regional rivals.
How is China a regional rival? Australia has koalas, China has Pandas.
> While Norway and the UAE enjoy the fruits of their resources through strong welfare systems enabled by a resource-driven economy
Australia also has welfare, high living standards, high life expectancy, good health, etc.
> Australia sold itself so hard its own citizens have to buy from foreign corpos.
Ahhh, so Norway and UAE have their own home built computers, TV's, and EV's, etc then?
You have some points, but you're trying to edge lord a bit hard there mate.
> Australia also has welfare, high living standards, high life expectancy, good health, etc.
Tell me how affordable a home near the workplace is for most Australians? On the contrary, Norwegians and Emiratis get a huge housing subsidy for their first homes. They both use their oil revenues to push for sustainable energy sources at home. And the UAE is currently pulling over its weight in AI, funding a significant AI player, while also taking part in active space exploration.
> Ahhh, so Norway and UAE have their own home built computers, TV's, and EV's, etc then?
Building computers, EVs and TVs in this age when China controls the complete manufacturing chain is a bit stupid honestly. But they do have manufacturing bases on the things they actually excel at - Norway is a major player in manufacturing shipping and specialized O&G equipment, while the UAE has focused on aircraft parts manufacturing and defence manufacturing.
FWIW, I’m an Aussie who went back during covid for the first meaningful stretch in 20 years. Explored the who country.
I saw with my own eyes what you’re talking about and you are spot on. It’s depressing and sad to see how Australia can’t organize a free one in a brothel, is stuck in the past and has no real interest or plan on how to improve anything at all.
Their problem is life is pretty good, so they’re not interested in a bit of work to make it incredible. Like you said, a modest sovereign wealth fund could easily let every Aussie work 4 or even 3 days a week. Or more solar, or making use of all the uranium or one of dozens of things
David Horne said it best in 1964.
"Australia is a lucky country run mainly by second rate people who share its luck. It lives on other people’s ideas, and, although its ordinary people are adaptable, most of its leaders (in all fields) so lack curiosity about the events that surround them that they are often taken by surprise."
It's what they call the resource curse, something that has plagued Norway too, but at least in Norway's case, they have opted to do it in a way that sustains it for the future. Compared to the Swedish and Danish, the Norwegians are also considered lazy for the same reason - life is good, so why bother with ambition?
AU exported ~1.5-2 trillion (lazy chatgpt math) worth of iron ore to PRC in last 20 years... which is life changing sovereign fund size, for Norway (also ~2T), with 5 million people. Or UAE 1 million emraties. Qatar with 300k Qataries. Much less so for 25m OZs. Doesn't mean they haven't squandered what they have, but just to put scale in perspective.
Not to mention PRC steel employs like 3m people, about the entire population of western australia where all the iron ore is. Unless AU dumped 1/5 of their entire workforce, relocate millions of workers and families, they can't make enough finished steel products to fill PRC appetite. I think much easier and profitable for AU to double down on ore extraction and ship more $$$ than finished steel. That's where AU competitive advantage is. Otherwise buyers will look elsewhere, i.e. Brazil could have been expanding iron ore exports much sooner.
Like I mentioned in another comment, you create manufacturing companies in your home turf to refine those raw materials into higher value products, which is exactly what Norway, the UAE and Saudi Arabia have done (Qatar cant exactly do that because their resource is basically just gas). Companies like Aramco, SABIC, ADNOC and Statoil exist. I don't see any of those countries inviting Adani or Yuxiao to extract their material for them. Yet China is a major customer for all of them, as they all are for China (Norway maybe less so).
Australia isn't a Western democracy, they are all the way in the east. UAE isn't either.
Do you have another market for them where they can sell 1 billion tons of iron ore a year ?
Saudi Aramco has a $50 billion dollar subsidiary called SABIC whose purpose is to take oil byproducts and refine them into plastics. Does Saudi Arabia have a huge plastic market? Or did they just think, hey, we could export this shit elsewhere for more money!
You literally let an Australian company process it to higher value products and ship it? That's literally what every oil major has done with their resources.
They could process it themselves and consume or export those higher value materials
> China didn't just fall into peak manufacturing capacity by a happy accident of many workers, they (for better or worse) made long term plans and stuck at them - including the reduction in poulation growth known as the one child policy.
I don’t think China planned to intentionally fall off of a demographic cliff. But they are already planning for that cliff by making very aggressive investments in AI and automation. If you see how effective their plans from 10-20 years ago turned out today, wait another 10-20 years and…I hope we have some kind of a plan…it isn’t what Trump has in mind for sure.
Ironically, Japan planned for the same cliff with aggressive investments in AI and automation in the 1980s, but the rise of China messed that up with cheap labor, and their AI play was misguided/probably too early.
I remember how until quite recently, the West viewed the East, particularly China, as a backward region. People would even dismissively use the term 'Chinese junk'. In a remarkably short time, that perception has completely flipped. Now it's the West that seems to be falling behind...
> People would even dismissively use the term 'Chinese junk'
I still do. Amazon in Europe is completely filled with Chinese junk, it's nigh impossible to find anything EU/US produced in certain categories. It became Alibaba with markup.
There is no EU/US equivalent to many products. We simply don't make things.
MaxGripe says "...that perception has completely flipped"
I avoid goods made in mainland China but seek out those made in Taiwan b/c they are exquisitely tooled. Both are Chinese but mainland manufactury severely lags Taiwan's.
When did this flip?
What do the Chinese make in high quality besides silk, EVs, and Orwellian tyranny?
smartphones
people are slow to adapt and have very outdated ideas of countries that are not their own. i see this upcoming with India too and Mexico soon
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One thing to note is PRC is the only country in the world whose manufacturing sector has every industrial category classified by the United Nations.
The premise that China does around a third of the world's manufacturing isn't really that surprising, they have more than a sixth of the world's population and there are a lot of areas (e.g. India and Africa) that have large populations and a disproportionately small share of manufacturing.
The real problem isn't that it's a third, it's that it will be something like 2% of commercial aircraft and 98% of PCs, and then the second one is bad. Single point of failure. That's the part that needs to be addressed.
give me an example good where china has 98% share
You can find threads where people are asking for laptops that aren't made in China and the responses end up being things like "well some of those are made in Taiwan" or "this one is made of components from China but the final screw is tightened in the US for labeling reasons".
Forgive my ignorance, but how does a country with a strong military turn that into GDP? I don't understand how military > manufacturing in terms of GDP. In my mind, manufacturing > military, but my knowledge of economics isn't great.
In the old days a country would use its military to conquer or subvert other countries to setup exploitative trading relationships.
For example the opium wars.
Nowadays the empire works via its currency that allows it to buy real goods and assets for something it can create for free with little constrain.
Of course the exploitive nature of the “exorbitant” privilege is controversial; and some economists would argue that it does not exist at all.
> For example the opium wars.
For a more recent example, the CIA operations on South and Central America in the 20th century. But well, it didn't take the entire military there, just a military-like paragovernamental entity.
Doing that today would be seen in a bad light and has a real chance of turning the entire world against the country. That doesn't seem enough to stop Russia, though.
In the 20th century, the US was quite successful into turning "military spending" into very advanced R&D subsides. I think most of the believes that military spending and growth are related come from that.
GDP includes government spending. If a country spends a lot of money on military, that reflects in GDP figures.
Correct. But military spending only *grows* GDP if the money is invested properly. In, say, research/infrastructure/training, etc.
Malinvested money will pump GDP for a few years before growth stops and potentially reverses.
That's correct, but it's not that material. The US GDP is about $27 trillion, the military spending is about $1 trillion, or about 3% of the GDP.
The imbalance in trade sectors is striking. China is dominating manufacturing, but this is requiring huge imports of agricultural goods and also services. The result being that there is a trade surplus, but it is far smaller than manufacturing dominance implies and also potentially quite volatile. Global changes like the war in Ukraine stressing agriculture supply lines and the decline of Hong Kong as a provider of services could have large impacts on Chinese trade.
I hope the Chinese people will be free one day, and I hope their lifespan goes up.
#58 is nothing to be proud of. Work to death. Not very fun.
The US can't even make cell phones any more.
What would it take to get that capability back?
They are trying:
Purism is selling the Librem 5 USA at $1,600
From the site: "The Librem 5 USA has Made in USA Electronics with all fabrication and manufacturing done at the Purism facility. Individual components used in fabrication are sourced direct from chip makers and parts distributors. We use US companies with US fabrication whenever possible. Most distributors are based in the US with the exception of large integrated circuits that are made in a variety of countries where those companies do fabrication (US, Taiwan, South Korea, Japan); an example is the NXP CPU we use from their fabrication in South Korea. While we source chips that are made in the US whenever possible, chip country of origin is not nearly as meaningful as country of board fabrication, especially when all chips are verified hardware circuits that are driven by free software in the kernel."
[1]: https://puri.sm/products/librem-5-usa/#table-of-origin
If you look at the table on the site, its not 100% USA yet but they are getting close and thats a positive development.
>Purism is selling the Librem 5 USA at $1,600
That's actually worse than it seems on the surface. $1,600 might seem only twice as expensive as a "normal" phone (eg. iPhone 16, $799), but if you look at the specs it's much closer to a low-end phone that sells for >$100. For instance the redmi a3[1] sells for ~$75 and is better in every aspect CPU, GPU, display, memory, storage, battery.
How few are they making? That's insanely expensive for what it does.
Well is a phone this is trying to be as open as possible. That redmi phone has a completely closed CPU. The Purism deliberately chose their CPU for these reasons. My point was that the US is making phones. Its not zero. Its a start...
Is that because of US inefficiencies or that they can't subsidize the cost with spying? Both?
>or that they can't subsidize the cost with spying?
There's no evidence CCP is "subsidizing the cost with spying" when it comes to consumer electronics. Even when it came to telecom gear (during 5G rollout in developed countries), concerns were mostly theoretical.
I didn't mean the CCP and by spying I meant harvesting user data for ads. We were talking about why a US built phone is so expensive (Librem) compared to say Samsung, LG, etc. Are companies that aren't Purism offsetting their cost by harvesting juicy user data?
Usually a lot of "I would pay for a phone if it were made in the USA" people disappear once "here's a phone made in the USA" actually shows up. It's usually just bullshit.
Ha! Joe Rogan used to bitch about this and then when presented with the Purism phone immediately dismissed it because only those 'dorks' use Linux.
It’s just going to be another Anom-style honeypot in the end, isn’t it?
Hopefully not since you can validate it at a deeper level down to the kernel modules I believe. Thats why they chose this anemic CPU I think: no binary blobs. Wasn't Anom encrypted with "trust me bro" style security by obscurity?
Also these guys have an anti-interdiction service thats pretty nifty: https://puri.sm/posts/anti-interdiction-services/
On the hardware side:
Customized tamper-evident tape on the sealed plastic bag surrounding the laptop itself
Customized tamper-evident tape on the internal, branded box
Glitter nail polish covering the center (or all) screws on the bottom of the laptop
Pictures of all of the above plus pictures of the inside of the laptop before sealing the bottom case
All pictures sent to the customer out-of-band, signed by Purism and encrypted against the customer’s GPG key
All coordination occurring over GPG-protected email
Integration with PureBoot Bundle
On the Software Side:
Shipping the laptop and Librem Key to separate addresses
Postponing shipment of the laptop until the Librem Key is delivered
Configuring the Librem Key and PureBoot with custom, user-provided GPG keys and/or PINs
The US can make cellphones, its just not efficient for the US to make cellphones because the US’s comparative advantage is elsewhere.
What it would take for the US to make cellphones is direct subsidy to the (inefficient, and for that reason likely therefore doomed by the market without artificial support, since there is robust competition) US firms doing so.
Of course, not only would this cost the amount of the subsidy, but the amount of the lost opportunities in places where the US has comparative advantages foregone to provide the subsidy.
The question then is why would you want to do this?
Producing real things is not just a matter of money. You need know-how and supply chains. These things left the US at least 10 years ago. It can get them back, but the costs will be staggering, and it would need to compete against China and other Asian countries.
Many of those Asian countries are our allies. If you want to argue for weapon or dual use stuff like drones that's one thing but I don't see how making cellphones help. Also we do make real things both physical and non physical
I think you're deceiving yourself. They're allies as long as it makes sense for them.
As the last 15 years has shown, being ally only works until US decides to choose themselves first. Even weird comments about Canada’s independence can sway population’s perception. There are genuine conversations about “maybe we shouldn’t have severed our ties with China” on the ground nowadays.
>> The US can't even make cell phones any more.
>> What would it take to get that capability back?
> The question then is why would you want to do this?
National security, obviously. Cell phones are a critical modern communication device, and whoever though it was a good idea to outsource that kind of thing political and economic rival was an idiot.
There's all kinds of accounts of past CIA/NSA daring-do where they used US-manufactured products to subvert rivals, and now we're going to get to be on the other end of that kind of thing.
Then there's the adding factor of it being kind of a good idea to have significant manufacturing capacity for the full-range of modern products located domestically or with allies in case the geopolitical SHTF.
You know, all that important stuff the market doesn't give a shit about, because it's a limited and imperfect system.
It's not economically optimal for one country to manufacture all the jewelry and its neighbour all the tanks, because this situation quickly becomes one country
> because this situation quickly becomes one country
i would argue this to be a good thing - a global "country". And yet, it is the human condition to separate tribally. It's why civilization can't advance more, until this becomes solved.
good thing we have more than two countries. in history, the jewelers generally tend to win because they just pay off some other tank building country - see Kuwait, for instance
>its just not efficient
The problem is we don't need efficiency, we need effectivity.
>The question then is why would you want to do this?
Because He Who Makes Leads The World. You can't and won't lead if you don't actually get your hands dirty and make shit. China is the world leading superpower now because they make everyone's shit, we are all beholden to them.
Moving it to Mexico, Vietnam, and India.
Mexico is ideal since you can ship partially assembled goods via truck or rail to and from Texas. It's easy to manage logistics and partnerships due to the close proximity.
The future of the US is Mexico.
Vietnam and India can absorb SEA manufacturing.
A friend of mine has done logistics for years, getting raw materials (sheet metal) into Mexico, manufacturing the products there (mostly kitchen appliances), and shipping to the US. According to her, it's nearly impossible to make any significant progress in Mexico because there's so much corruption at all levels. She has to ship metal from Asia to Long Beach, then have it trucked down to Baja where it gets made into a product, then the product gets shipped back to the US for sale. Every couple of years there's talk of scaling up the ports at Ensenada so the shipments of metals can go directly to Mexico, but it never happens - locals get paid off, and nothing ever happens. I once asked how the Mexican officials can be so corrupt, that they would sabotage their own port improvements. She told me, "I wasn't talking about corrupt Mexicans. Do you think Long Beach is just gonna sit back and let the Ensenda take shipments from them?"
Mexico is now a hub for Chinese manufacturers. Just look at how they're developing the relationship: the materials are all from China and the market is the US. Vietnam is even more like that.
It’s easy, just make Americans poor enough that it makes sense to manufacture them here. Given that no one wants to pay more taxes or (realistically) cut spending, we’re well on our way.
+1, it’s truly like there are no adults at the helm any more.. nobody even talking about our fiscal path and that we need to raise taxes and scale back medicare/ss
I think it's less capability and more the cost of goods. You can't compete with items that are half the cost to produce in east asia.
Manufacturing was always going to move to where it costs less.
It's bad for a productive american economy but it's a prisoner's dilemma so you can't blame businesses or consumers.
The government is the only party that had the power to do anything. it's 100% an economics problem.
Send your kids to study EE, invest 401k in manufacturing
And only a matter of time before the manufacturing superpower is both that and a military superpower. If you can make stuff you can make military stuff
I remember when USSR tried to make everything on its soil. It didn't end well.
https://www.youtube.com/watch?v=NzKuHxp7WqA
tl;dr: Today China vs US is 19% vs 16% world GDP. By 2035, it will be 24% vs 14%. China will be large economy, US can't beat China. Unless there is a nuclear war, which is probably less than ideal.
See also "Manufacturing is a war now":
> Democratic countries’ economies are mainly set up as free market economies with redistribution, because this is what maximizes living standards in peacetime. In a free market economy, if a foreign country wants to sell you cheap cars, you let them do it, and you allocate your own productive resources to something more profitable instead. If China is willing to sell you brand-new electric vehicles for $10,000, why should you turn them down? Just make B2B SaaS and advertising platforms and chat apps, sell them for a high profit margin, and drive a Chinese car.
> Except then a war comes, and suddenly you find that B2B SaaS and advertising platforms and chat apps aren’t very useful for defending your freedoms. Oops! The right time to worry about manufacturing would have been years before the war, except you weren’t able to anticipate and prepare for the future. Manufacturing doesn’t just support war — in a very real way, it’s a war in and of itself.
> Democratic countries seem to still mostly be in “peace mode” with respect to their economic models. They don’t yet see manufacturing as something that needs to be preserved and expanded in peacetime in order to be ready for the increasing likelihood of a major war. Fortunately, both Republicans and Democrats in America have inched away from this deadly complacency in recent years. But both the tariffs embraced by the GOP and the industrial policies pioneered by the Dems are only partial solutions, lacking key pieces of a military-industrial strategy.
* https://www.noahpinion.blog/p/manufacturing-is-a-war-now
FDR started preparing for war years before WW2 / Pearl Harbor (warning: heavy anti-union slant in the book as it was funded by AEI):
* https://www.goodreads.com/book/show/13152691-freedom-s-forge
The title needs 2024. The article is almost a year old.
my favorite bit of trivia connected with the whole "trade war" is the sudden apearance in China, of companies devoted to the making labels, the most poular (currently) are those saying "made in vietnam" and apocryaphal or not?, there is a city in china named USA, which satisfied the beurocratic requirements of some other round of protectionism
> The US is the world’s sole military superpower. It spends more on its military than the ten next highest spending countries combined.
Dubious claim. Military power is not measured in “spending”. Manufacturing is in fact a basis for modern military power, as it was the basis for US military power in WW2. The fact that China can produce 10k+ precisely controlled drone swarms in massive quantities and produces more hypersonic missiles and ships casts doubt on this claim.
Says the Atlantic: https://www.theatlantic.com/politics/archive/2024/12/weapons...
Indeed, we spend more than anyone else but also get less for our money than anyone else. It would likely be an underestimate to say that our gear and labor costs double that of any of our competition.
labor cost contributes to higher prices, but why we always ignore corporate America and middlemen contributions to price gauging?
Some middlemen are critical. I used to be more skeptical of "mere merchants" but they often take significant risks to supply us with things we need at exactly the time we need them and not a moment before. They provide a service to you by efficiently getting products into your hands, and they provide a service to the producers by handling all the logistics of distribution. Some middlemen don't add significant value, such as drop shippers (IMO). But even they might be seen as providing some value, such as making it more convenient for you to buy and assuming risks on your behalf.
People don't ever ignore corporate America's actual price gouging. I think they are sometimes conditioned to see price gouging where there is none. Domestic costs are very high, and foreign costs are low (perhaps even suspiciously low; our competition is willing to operate at a loss to put us out of business). Don't get me wrong, it would be awesome if there was some obvious price gouging at work that could be cut to solve all our problems. But it is usually just market forces that drive prices high.
It won't take long for China to catch up. And in a hot war, they're the ones who can rapidly rebuild.
Lots of reports say that Chinese military spending has exceeded our own if you account for their cheaper cost of labor and material goods.
China also recently (just days ago) flew two new sixth gen fighters. The US has yet to demonstrate one.
The tactical move for the West to counter is to move as much manufacturing as possible to other countries (Vietnam, India, Mexico) and hope that can put a dent in China's manufacturing flywheel. The Chinese consumer economy isn't robust enough to absorb all of the goods they manufacture (at least not yet), and without buyers the system would need to be scaled back.
Even if China was 100% a friend, you wouldn't want one country with this much outsized control over manufacturing. In the future this will be better distributed.
> China also recently (just days ago) flew two new sixth gen fighters.
China doesn’t really have a 5th generation fighter yet, it is more a roadmap item than a finished product. There is zero evidence they have 6th generation systems. These terms have meaning. The US has been flying 6th generation prototypes for years, they just don’t post photographs. The US has been flying production 5th generation fighters for 20 years. They have a long lead and it isn’t like they stopped development.
Also, appearances are largely immaterial to being classified as 5th or 6th generation. Most of the relevant properties for classification are not casually observable.
> Even if China was 100% a friend, you wouldn't want one country with this much outsized control over manufacturing
It's not up to the US to decide this. China is the largest car market. It is also the largest car producing country. It is the largest manufacturing country. It also has the largest number of consumers in any country, and this market is still growing. It has the largest number of engineers. The numbers play in China's favor.
Certainly. The reality of the political situation though is that China is an authoritarian country ruled by the PRC, increasingly acting more like a dictatorship. While China’s economy, society and people have 100% the right to grow as much as they would like, those of us living in (sonewhat) liberal democracies would still want to contain the power of the PRC (and the cult of Xi Jinping).
If 1989 had gone in a different direction and China today is just a giant version of Taiwan, how would that possibly be better as an American? We would all be trying to figure out how to get paid in digital Yuan.
Instead they have huge manufacturing capacity sitting on top of a completely busted financial system. Look at the returns of Chinese equities vs GDP growth the last 20 years. It is completely absurd.
The financial system is imploding right now, trying to find a place to hide https://tradingeconomics.com/china/government-bond-yield
> returns of Chinese equities vs GDP growth
The equity market is just one place where companies can go to receive investment. In China this is a small part of total investment pool. So, no surprise that these equities don't go as fast as the rest of the economy, there is a lot of competition. In the US this is the reverse because traded companies are allowed to swallow more and more of the real economy.
> returns of Chinese equities
Another phrase for money leaving the country without goods coming in?
> liberal democracies would still want to contain the power of the PRC (and the cult of Xi Jinping)
I am not Chinese but I still find this comment hilariously offensive and tone-deaf. I can say almost without a doubt that the US has a "tremendous" issue with cult-of-personality right now. But I don't see Chinese or other countries attacking or trying to "contain" this.
The US is still treated as a nation, unified in its people and leaders, by even its adversaries. But when Americans deal with other countries, there is a tendency to say things to the effect of: "the people are fine, it is the X that must be suppressed", ignoring that this X is inherently or directly connected to people of this nation.
Most Americans are incapable of seeing the double standards of their own culture. Unfortunately for them, the rest of the world is well aware of this.
Your comment immediately reminded of this Reuters story yesterday: "Supporters of South Korea's Yoon adopt 'Stop the Steal', hope Trump will help" https://www.reuters.com/world/supporters-south-koreas-yoon-a...
The US can have a big effect with policies supporting local / non Chinese manufacturing with tariffs, subsidies and the like, as they are already doing.
The irony is in a world war China would likely take over the manufacturing plants the west built in places like Thailand and Vietnam to assist China in the war effort. Further bolstering their war time production.
Can we even talk about a world war like this in the nuclear era? Wouldn't we all just annihilate each other with nuclear weapons if we had a full fledged war?
The more time Russia spends in Ukraine, the more evidence we get that no, we won't just annihilate each other. We will probably do something more complex.
Invading Thailand and Vietnam would likely lead to a military alliance of them US, Japan, the Philippines, Australia and possibly South Korea. If they just want Taiwan at least for now it seems like a bad idea to get all the other countries to enter the war
Let's not even talk about Taiwan, which will be the first target, and its plants will all produce chips for Chinese products.
Those plants will 100% be destroyed/disabled in the event of an invasion.
Those plants depend on a lot of imports for spare parts and raw materials, even if China took them over tomorrow somehow intact with with the people to operate them, they would be out of commission in a month or so.
Even if that is possible (unlikely), it will be a big blow to American power because Taiwan produces the best of semiconductor technology.
They say that but it doesn't really make sense to actually do it.
>manufacturing plants the west built in places like Thailand and Vietnam
What are these?
Did Apple build these factories?
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Even if that were true, it would only be an interesting bit of trivia rather than a fact with predictive power applicable to the present.
The article discusses the unprecedented rise of their manufacturing capabilities, currently unmatched. It’s not clear how information about preindustrial China would be applicable.
Not true.
https://en.m.wikipedia.org/wiki/Military_history_of_the_Tang...
Although china does not seem to try to get in wars historically. Conflicts between for example middle east and china over recorded history are not that many.
It's personal/relative, but I'd consider both the Korean and Vietnamese wars to be China's proxy war after their CCP war with the Kuomintang. They did pretty well on well (Vietnam) and preserved the status quo on the other (Korea).
If you get big enough, you don't have to fight.
Did the U.S.?
Vietnam, Afghanistan, Iraq...
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trump is not going to end stupid industrial policy
Indeed. That’s what I meant by “ US industrial policy is especially bad”. It’s usually a regulatory capture thing here.
The GGR measure suggests they have a self sustaining economy to some extent. This manufacturing capacity, even if it’s “only” a third of global capacity, is a danger to free societies. It’ll ultimately be used to force the CCP’s authoritarian control on Xinjiang, Tibet, Hong Kong, Taiwan, and probably others.
Unfortunately I don’t know what short term options there are to contain the CCP’s power and control over this capability. The conclusion of this informative article says this:
> China is now the world’s sole manufacturing giant. As its recent success in electric vehicles demonstrates, its wide and deep industrial base can help it gain a competitive edge in virtually all sectors. The exceptions are the most advanced sectors, where the G7 countries still dominate.
> Politicians who indulge in loose talk about decoupling from China need a clear-eyed look at the facts. As we have shown (Baldwin et al. 2023), all the major manufacturers in the world source at least 2% of all their industrial inputs from China. Decoupling would be difficult, to say the least.
“Wide and deep” is key here. Chinese manufacturing is hungry and way more competitive than in the US. Physical manufacturing in the US is geared toward the largest companies and the defense-industrial complex. If your products have any complexity to them (starting with electronics), a small company has little chance of getting access to good factories and pricing.
There is no political will - or sufficient tax revenue - to subsidise a broad-based OECD manufacturing economy. Factorio-China produces more than the world (or China itself) can affordably buy. Let's see if it's all sustainable. Are many American homes not warehouses for Chinese overproduction ?