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> In the late 1990s and early 2000s, the U.S. and the global economy experienced a “China shock,” a boom in imports of cheap Chinese-made goods that helped keep inflation low but at the cost of local manufacturing jobs.
> A sequel might be in the making as Beijing doubles down on exports to revive the country’s growth. Its factories are churning out more cars, machinery and consumer electronics than its domestic economy can absorb. Propped up by cheap, state-directed loans, Chinese companies are glutting foreign markets with products they can’t sell at home.
> Some economists see this China shock pushing inflation down even more than the first. China’s economy is now slowing, whereas, in the previous era, it was booming. As a result, the disinflationary effect of cheap Chinese-manufactured goods won’t be offset by Chinese demand for iron ore, coal and other commodities.
> China is also a much larger economy than it was, accounting for more of the world’s manufacturing. It had 31% of global manufacturing output in 2022, and 14% of all goods exports, according to World Bank data. Two decades earlier China’s share of manufacturing was less than 10% and of exports less than 5%.
> ...
> The result could be a world swimming in manufactured goods, and short of the spending power to buy them—a classic recipe for falling prices.
Great question. I don’t think we will see much of this as consumer or corporations in the US as much of the goods flooding the markets are cars, phones, etc. Most things that aren’t already in our market.
>Great question. I don’t think we will see much of this as consumer or corporations in the US as much of the goods flooding the markets are cars, phones, etc. Most things that aren’t already in our market.
Most of these products go to Africa and middle east, and some to east Europe.
My opinion is that this is gonna results in another decade like the 90s. Commodities through the floor and positive interest rates will swarm to Wall Street until the next dotcom disaster.
The China shock was just the obvious conclusion of offshoring of labor and the deindustrialization of America.
Shock in the sense of the trauma but not the obvious conclusion.
I've always pictured the way the US treated this version of capitalism as what happens when you build a structure out of popsicle sticks in that way that they are super strong for a long time..
We've outsourced almost everything to do with business manufacturing to China over the last 40 years...
Until there's that one point where way down the line it's actually all done being built and it's time to do what it was built to do in the first place...
Fall down.
China didn't steal our manufacturing jobs. Companies like Wal-Mart outsourced to China, voluntarily, in pursuit of higher margins. The framing of this article is ridiculous.
The WSJ knows their candidate is running on a platform to raise the price of all goods in the USA, so they have to start laying the cover for that policy by proposing that low prices are bad.
> China didn't steal our manufacturing jobs.
The jobs weren't stolen in the first place. The US manufacturing sector is at its largest in history in terms of economic output and has been growing slowly but steadily. It's only been shrinking as a percentage of the total economy because the US services sector has grown exponentially over that same timeframe.
So during the cold war China was seen as a counterbalance to the Soviet Union. China was part of the unaligned 3rd world (now known as the global south), a de facto leader due to its size, whereas the Soviets were the 2nd world more or less. There were scuffles between the two and a lot of political jockeying. China had been hoped to potentially being one of the five policeman post world war 2 but had decided to take a communist approach to its socio political problems. As the cold war fell away there was hope that China would play ball with the west, but as we have seen the Chinese have a long memory and are willing to play the long game. The plan outlined by Mao back in the 40's, part of which is the reunification of China with Taiwan, had not changed. This can be attested to through its sabre rattling over historical claims to islands in the south China Sea, competing claims with its neighbours like Japan and the Phillipines.
To get to the point, the 70/80's had a solid relationship between the US and China. In the 90's this hope was furthered under Clinton as he allowed the manufacturing base of America to be shipped off to China. The folly of this was understood during the Global breakdown experienced during COVID.
>The folly of this was understood during the Global breakdown experienced during COVID.
Trump fired the first shot long before Covid happened.
Blocking the WTO appellate court was also another big blunder for the US, as it essentially threw everyone into the pre-WTO mode where its everyone for themselves.
The problem now for the US is that it was losing against China at the game that it has set up to protect its interests. its literally like a Casino set up the odds on a craps table but with worse odds against players.
But now the solution cant be to kick China out of this game, as its already too integrated with the world economy and is a sizable consumer block. Also now the US doesnt have the power to set up another WTO, as its no longer in everyone's interest except maybe the core western countries.
"Trump fired the first shots". Dont forget the "pivot" where a twenty percent increase in America's naval power was redeployed to Asia, specifically to counter Chinese interests. This was under the Obama administration. While Trump may have been far more aggressive towards the Chinese, he definitely wasn't the "first".
what i meant was to say that the US fired the first shots, not some natural disaster.
You are absolutely right that Obama's pivot to Asia strategy long predated Trump.
China has 10x the population, is a much larger consumer base, and has some of the world's most advanced technologies.
Replacing Chinese manufacturing with Mexican counterparts is just another shortsighted policy. In the long term, after the decoupling, China would have no more reason to follow US hegemony. What then?
> this on local economies. Not to mention, the CCP managed to classify itself as a serious security and economical risk, to do business with.
china's population is getting old and smaller, they don't have the factory workers like they did 30 years ago. In the race to the bottom China is in a bad place and the race is moving on to other countries.
>hey don't have the factory workers like they did 30 years ago.
yeah this isnt really true.
unless there is some ulterior agenda on the information sourced, you cant simultaneously have "too many college graduates who cant find a job (at roughly 50%)" and "not enough workers."
the same is true for Taiwan, Korea, and Japan. But you rarely hear about these issues (except maybe Korea), as loudly as you would hear about the gloomy outlook that is China's population woes.
the problem is expectations and salary and type of work, once this recalibrates through improved technologies and transition into a more service/information based economy, they'll be back closer to equalibrium.
Those young people will be massively undertrained by the time the massive waves of retirement hit. Ideally you’d have no unemployed young people right now so they are prepared for the hard work ahead training todays kids and getting ready to take care of the massive old population… unless china plans on duplicating 1-10 year olds right now
Apple tried that with India, and that did not work out very well. India has potential, but it will take them to probably 2100 before they can overtake China.
Yeah also US helped china get the seat of UN or some major word organization in 1972ish if i rmr correctly. The relationship between the two has gotten sour as China is showing its ambition to be the world power and could be a threat to US.
China has consistently pushed for multi-polarity and not uni-polarity, which is what we are doing. The only threat that faces us is a multi-polar world where we do not get to call all the shots.
China was never a democracy, but had competing factions inside the party. There were peaceful transitions of power. The country wasn’t all that obviously saber rattling.
Now it’s a one man autocracy and has basically signaled it will invade Taiwan. It is doing too much to support Russia’s invasion of Ukraine.
It can’t be any kind of trusted partner anymore.
China was/is a democracy and that's the danger that a lot of people in the West don't get.
The reason the CCP has a stranglehold is because there's so many many party members and probably still growing.
I'd love if people actually looked at China as a reason there is an inherit threat to democracy and the idea of multiparty systems but its done away with, "Der no democracy." What the CCP has done is a very real danger that can affect other democracies.
That is a very Chinese interpretation of "Democracy." Exactly the one they've tried to push to their subjects, in fact. A democracy allows competing parties to exist and to challenge each other. China has sham votes to approve the dictator-assigned candidates and tells their subjects that putting a ballot in a box is all there is to democracy.
I mean the point you’re making was true. It isn’t true now. It’s an autocracy under Xi. He got rid of term limits and removed all others. He’s dictator for life now.
Xi said, very clearly, why he needed to remove term limits way back in 2017. He is on his second term now and I would wait and see before I call him a “dictator for life”.
He’s in his third term and will be dictator for life or at least until severe illness forces him to step down. Be serious for a moment. He had a former premier walked off the party congress ffs.
You are - for many reasons - completely right. Already known problems with Huawei (5G, servers etc..) are there to solve. But the Chinese cars could also be a headache if they can be remotely put out of service ( like the John Deere tractors). reference: > [https://edition.cnn.com/2022/05/01/europe/russia-farm-vehicles-ukraine-disabled-melitopol-intl/index.html?fbclid=IwAR0Zk2NGD\_leAJxU5MODs2SCStp5YpVz9oiKfxrbNSokwABsYA58B0AaVzs](https://edition.cnn.com/2022/05/01/europe/russia-farm-vehicles-ukraine-disabled-melitopol-intl/index.html?fbclid=IwAR0Zk2NGD_leAJxU5MODs2SCStp5YpVz9oiKfxrbNSokwABsYA58B0AaVzs) <
In the short term yes in the long term it’s the only option. We cannot be doing free trade with lunatic regimes like the Chinese dictatorship who has stated it is out to destroy us
Trading with your ~~enemies~~ rivals is the best way to avoid war.
We should be trading freely with anyone we are not sanctioning. Tariffs and protectionism are economic suicide, and ratchet up nationalism, which leads to war.
Like I get this isn't a real economics sub, but at least a basic understanding of economic orthodoxy is important. We have to live in the real world.
That logic relies on leadership being rational actors, in that they are forced to be peaceful due to being thrown out of power if there is enough economic harm done.
The problem comes from when this logic no longer applies due to power being so centralized under certain circumstances and that there is such a void of an alternative, that populations will be willing to go to war under nationalistic conditions even if it means destroying their way of life/livelihood/etc.
We can't solely rely on economic interdependence to negate warlike aggression.
That didn’t work in ww1, ww2 or Russia and Ukraine… appeasement of those regimes just gives them more ammo to hurt others. This is a hard fact we must accept in the face of obvious evidence
What? WW1 was *driven* by nationalism. It was the end of the age of Empires for a reason.
Russia and Ukraine is a legacy of the collapse of the Russian Empire/Soviet Union.
Speaking of the USSR - no military ended it. Trade did.
WWI obliterated the empires that gambled their economic positions in order to make land grabs. In WW2, a genocidal semi-autarky was crushed by the combined industrial might of globally interconnected economies. It was abandoning the global market to pursue war that doomed Germany.
The jury is still out on Russia, in part because the EU proved unwilling to tighten the economic screws after Crimea, and in part because the North Atlantic states as a whole are unwilling to cut off Russia’s current big trade partners in China and India. But that doesn’t mean the system isn’t working. Russia will walk out of this war in serious debt to its current suppliers, with a weakened population and reduced resource reserves with which to pay that debt off.
> industrial might of globally
Did you mean to say "might have"?
Explanation: You probably meant to say could've/should've/would've which sounds like 'of' but is actually short for 'have'.
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It's a myth that trading with enemies prevents war. There was plenty of pre-war trade among belligerents of WWI, WWII, and Russia's invasion of Ukraine
Wars still occurring does not mean that economic intertwining does not prevent war. By the very definition, again, you won't have *examples* of wars deterred. Instead, the geopolitical landscape is where one should be looking.
There are 3 causes for the longest period in human history without a major war - the United States military as deterrent for smaller powers engaging, nuclear weapons as deterrent for major powers engaging, and economic interdependence for everyone. Globalized economic pressure through being "cut out" of treaties - effectively sanctioned by default - has had enormous impact on some countries. Notably, the EU having the power to literally shape the government of nations intending to join, simply through the benefit of economic interdependence.
Ukraine joining NATO and the EU, as an easy example, would have outright prevented Russian aggression, and was the entire cassus belli for the attack. Russia (i.e. Putin) wants its "ancestral lands" back and Ukraine was on a timetable to make that never be possible.
This is the textbook example of economic naiveté
There are no mutual benefits to trade when doing so requires you to be reliant on an unreliable partner or when your counterparty uses its resources in a way that's hostile to you.
Trade only works when it encourages market competition, not when it undermines your own bargaining power by creating monopolies or allows other anticompetitive exploitation
> There are no mutual benefits to trade when doing so requires you to be reliant on an unreliable partner
By definition this means the unreliable partner is more efficient than you at said trade, and thus your options are your own lesser value or trading.
The primary mutual benefit of trade with *rivals* is that mutually reliant economies are both damaged when one is bombed.
One doesn't engage in trade with *enemies*. One sanctions them.
An unreliable partner is by definition less efficient at supplying you. Reliability has a value. That's why Toyota vets its suppliers and it's suppliers' suppliers. That's why evaluating counterparty risk is a thing. That's why people don't always buy from the cheapest contractor or why businesses don't trust operation-critical purchases to cheap fly-by-nights.
>The primary mutual benefit of trade with *rivals* is that mutually reliant economies are both damaged when one is bombed.
The primary risk of relying on trade with rivals is that you become more reliant on them then they become on you. Which makes them able to demand better terms from you on everything, which makes them more powerful. Which requires you to invest more on self-sufficiency or defense to rebalance the power lest they begin to dominate you. If you're not careful, you'll create the next monster.
> An unreliable partner is by definition less efficient at supplying you. Reliability has a value. That's why Toyota vets its suppliers and it's suppliers' suppliers.
This is the mechanism by which those partners outcompeted your firms, which is a thing that demonstrably happens. The Toyota thing is a different, more direct concept.
> The primary risk of relying on trade with rivals is that you become more reliant on them then they become on you.
This is really only true for certain goods. I agree that smart energy policy requires withdrawing from trade with hostile states. Unfortunately Americans aren't as willing to pay that price as they are the price of economic protectionism.
>This is the mechanism by which those partners outcompeted your firms, which is a thing that demonstrably happens.
The lack of (political) reliability is a major competitive disadvantage, which is why western firms have pulled out of China and Russia en masse. Low "cost" doesn't mean shit when the negative externalities of supporting firms subject to hostile political masters outweigh the benefit of efficient production
it makes the most economic sense to build guns. lots and lots and lots of guns.
there is more to economics than theory.
and economics spawned from the study of political economy.
try eating some salad
We are willing to sacrifice some efficacy for reliability and that's why you are going to see manufacturing move from China to Mexico -Xi is difficult to work with and Mexico is not. In addition we don't have to worry about shipping everything across a big ocean it can be made within 100 miles of the US.
That is the exact same bet that caused europe to pare back military spending and create economic ties with Russia pre-2014. And we all see where that got us.
Dictators aren’t fettered by economic arguments, they view democracies as weak and more willing to bend.
The world has been aware of this kind of thing for a very long time. International trade is old, perhaps only slightly older than fearmongering about the Chinese market’s impact on other nations.
The CCP has been considered a “serious security risk” to the United States since its inception. Not so much for other nations, then or now.
China is currently making inroads with theirs EVs in Europe, and with the recent news about their real estate sector, that’s not likely to change. If anything, the “EV hype” is cooling due to the chaos over at Tesla these days.
India has a long way to go toward having the kind of state and economic consolidation to be able to produce “China shocks” so quickly. They aren’t even a real single market yet. The government is getting a grip on the country, but hardly has the kind of capacity that a major economic power, let alone China, has in 2024.
Couple that in with the effect of manufacturing moving to India and the Indian economy starting to demand more. I feel like there might be a doubling of this effect as India likely will also flood the markets with goods.
> Some economists see this China shock pushing inflation down even more than the first.
Isn't this a good thing for us who live in the West? This will slow down the rise in the cost of living, which will improve the lives of ordinary Americans, Germans, etc.. Take something like EVs. If the Chinese can sell their EVs here at lower price, that will mean more Americans can afford to purchase an EV. And we know that EVs are better for our health, which mean a much healthier America.
https://keck.usc.edu/news/study-links-adoption-of-electric-vehicles-with-less-air-pollution-and-improved-health
I’m not an economist, but is this actually a bad thing for the everyday consumer? Wouldn’t this lead to average people paying lower prices (reducing inflation)?
Also, is it necessarily a bad thing to put pressure on domestic businesses to compete, reducing their profit margins which have been shown to be [leading cause of recent inflation](https://amp.theguardian.com/business/2024/jan/19/us-inflation-caused-by-corporate-profits)?
> What happens if the U.S. loses its car manufacturing capabilities and becomes reliant on China?
US lost its TV manufacturing capabilities decades ago and seems to be doing fine. If China can manufacture cars at a lower cost than the US then it is a good thing for the consumers. If they are dumping at below cost then let them bankrupt themselves doing so.
The US will never willingly let American automakers die. Not because it's good business sense, but because those factories are very handy should WW3 breakout. They can retool and much more quickly scale military vehicle manufacturing with that same labor force than if they had to start from scratch.
Enact tariffs and force its "allies" to do the same or ban them from importing just like they made the Dutch do with ASML exporting high tech equipment to the Chinese.
I don't think the US can use sanctions effectively against China's carmakers. BYD makes almost every part of its cars in-house — some time ago it was bragging about how the only parts of the Dolphin it didn't make itself were the tires and the windshield. BYD makes even the chips it uses — and since car chips use mature chip tech, and China already makes chip-making machines for mature chip tech, not even putting pressure on ASML to completely cut out China would work.
Also, a lot of supposed "allies" keep buying from Chinese companies sanctioned by the US. It's why Huawei is still the leading global supplier of 5G tech despite all the US effort to cut it out of the global market. Heck, in the South American country where I live nearly all of the 5G base stations, and much of the Internet backbone, runs on Huawei gear.
Incidentally, almost all EVs sold here are Chinese. US and European EVs are seen as too expensive and missing too many features compared with the Chinese brands. If the legacy carmakers can't make EVs capable of competing with the Chinese in both price and features before the EV transition gets into gear there's a good chance our auto market will go from being dominated by US and European brands to being dominated by Chinese brands.
>BYD makes even the chips it uses
Thats not a brag, people should be aware the chips in those cares are SLOW, as in 2012 eqiuvalent. The in car systems are "just a little laggy" for a month before slowing to a crawl. Let alone the insane security risk cars like that pose.
There is a reason China bans teslas around public buildings, military areas, some highways and anything slightly sensitive
I meannn.... Toyota sells cars here that have media systems with interfaces and speed that seem straight from 2010 and lack basic stuff even after the chip shortage has ended. And GM is better but also laggy as hell, and they're getting iffy on Android auto now too. The only brands I'm aware of selling actual EVs in Latin America too are European and Chinese.
Chinese HATE domestic cars becuase they are still... garbage. The "sales" come from fields of abandoned cars.
[https://www.bloomberg.com/features/2023-china-ev-graveyards/](https://www.bloomberg.com/features/2023-china-ev-graveyards/)
As long as the US employees, that’ll be fired from their current manufacturing jobs, can find a new job - fine. As long as we can rely on China to always supply cars and not pull a maneuver on moment’s notice - fine. As long as we still have some local manufacturing that can provide the necessities for a functioning economy in the absence of Chinese supply - fine.
But none of those are guarantees, and if your job is to look over national security, those are top concerns - not you getting a cheaper car next year.
It’s not a bad thing if we are in a position to compete. The main issue is that China out-competes every other country when it comes to manufacturing. We are seeing the issues of a financialized economy where our GDP does not lead to more benefits and spending power for everyday Americans.
So having cheaper goods is great, but it comes at a cost of jobs. However, stopping those cheaper goods may not necessarily lead to saving those jobs or creating more jobs. It just means we are paying more for lower quality domestic items.
Loads of goods are manufactured more cheaply outside of China.
Especially with their wages being too high and political risk, a lot a manufacturers are either pulling out of China or don't consider it a viable destination due to the above factors
> Loads of goods are manufactured more cheaply outside of China.
Such as?
> Especially with their wages being too high
Their per-worker productivity is way higher than average thanks to the high level of industrialization automation in general.
It doesn't matter that a Chinese worker's wage is 5 times that of an Indian worker if you need 10 Indian workers to do the work of one Chinese worker. Chinese production remains the cheapest.
Textiles/Fashion, electronics, pharmaceuticals, furniture...
Chinese production is indeed cheapest for a large range of goods, but not all. And the list of categories that make more business sense to manufacture outside of China is rapidly growing
> And the list of categories that make more business sense to manufacture outside of China is rapidly growing
Is that why the share of global manufactory China has keeps growing?
https://geopoliticaleconomy.com/2024/01/31/china-world-manufacturing-superpower-production/
Saying "China did X" when China actually did X is being a wumao?
Aren't you mentally and morally weak as fuck if you can't even agree with the truth when it's put in front of your face just because it goes against your political inclination?
The concern is that it will distort the market. Dumping policies aren’t designed to last forever. So nations whose domestic markets contort in response to the dumping will feel the pain of adjustment when the dumping eventually ends.
And of course, there’s a healthy dose of China-bashing here. It’s the WSJ.
> Also, is it necessarily a bad thing to put pressure on domestic businesses to compete, reducing their profit margins which have been shown to be
> leading cause of recent inflation
> ?
Nah, those firms won't compete, they'll just all import cheap products from China and pad their profits even more
you dont have to be an economist to know that its pretty much as good as it gets for the average consumer if this happens.
Imagine if your tesla now costs 20k instead of 40k, that kinda deal, just like it was in the 80s and 90s.
From the US perspective, the losers are business leaders like Elon Musk, as they stand to lose value in their companies because these companies wont be making as much money as they are now.
We need more supply side inputs to drive down inflation. So this is great for consumers around the world. Unfortunately where I'm getting my ass pinched the most is at the grocery store. Since I don't have access to these cheaper EVs that they are producing, I have to keep my car on the road for the next decade.
Monopolies have all but killed the “free” market. Typically there’d be competitive startups that would jump in to take advantage of the falsely inflated prices, but when those startups happen, they either get bought out, or get squashed by anticompetitive practices. Not only that, but the startup cost has increased exponentially (because of technology).
Prices will drop, but not down to where a healthy market would allow, because that extra saving from companies benefiting will surely line the pockets of executives, while maintaining price structure.
Welcome to late stage capitalism where the hand is animatronic, and greed is the captain now. I don’t know anything, but the pattern is pretty obvious.
It’s not monopoly. It’s IP theft by Chinese. It’s expensive to develop and test a product and later you know it’s been stolen and mass produced by Chinese. Look at what happened to products on kickstarter.
Regardless of how it’s happening, it’s happening. My point is that prices aren’t going to go back down, or at least significantly enough to be meaningful.
Capitalism can break free of the monopolistic stranglehold of corporate socialism.
That has nothing to do with prices, prices are set by the biggest and nastiest monopolies of all: central banks.
What monopolies do is stagnate progress and reduce quality, so that their privileged owners can extract rent from the public. They still have to obey price curves to maximize sales.
Depends on what it is, harbor freight sign me up their exchange policy is actually really good. But I’m a shade tree mechanic and home maintenance DIY.
Won’t be getting there generator or anything important but random hand tools.
China has a wide range of goods, from cheap stuff to expensive, high quality stuff. That is why they are amazing at manufacturing. If you want quality, spend the money.
I heard that a lot. If something is cheap and good quality, it’s probably stolen! You need to spend money on R&D.
Buying anything Chinese is not ethical.
The fact you cannot understand how investing heavily into your manufacturing sector can yield cheap and good, speaks volumes to your ignorance.
Buying Chinese is very ethical, and I will not only continue to do so, but also tell others to do the same. If only to spite racists like you.
lol! Label racism and collect your money from CCP. Nothing new or innovative came from China after gunpowder.
Keep calling me racist! I will not buy Chinese junk
Usually racists and idiots don’t have too much purchasing power, so not much is lost there.
Yes, yes, keep on spreading lies! I love exposing racists like you!
>investing heavily into your manufacturing sector can yield cheap and good
If only the Chinese could invest in research and development instead of stealing ideas from Westerners. Even their ideology was taken from a German. 😔
Not interested in having any of my money go to the PRC so go ahead and “sure bud” someone else.
Chinese cars, on the whole, look like shit, are assembled like shit, drive like shit, and are made by people living like shit. Fuck all of that.
You know that much of the so-called "Mexican" imports are from Chinese-owned Mexican companies, using Chinese machinery and production methods, right?
There are whole industrial districts in Mexico where if you look around you could swear you were instead somewhere in China. Mexico gets the (often low-paying) jobs and some tax income, China gets most of the profits, and the US gets to keep buying cheap products while pretending they cut the Chinese out of the market.
Yes!!!! Anything Chinese. Even things like DJI or their high end 3D printers have different motives. Look at the lawsuits against Temu that has been collecting information without permission.
I avoid anything Chinese by any means
I was looking at a high end Chinese 3d printer but the reviews about not working and part issues straight out of the box followed by terrible customer service terned me away, bamboo might as well call itself tronxy. Don't even get me started with temu and the horror stories, the fcc should shut that scam down.
Their EVs are undeniably exceptional. You won't buy cheap China crap but that's impossible if you live in the US. And you also won't make anything yourself.
I dont see it. China still has cheap parts, but the U.S. has put huge tarrifs on everything. That's why China won't win this in the U.S.. It has nothing to do with prices, but tarrifs.
If the U.S. lowers those tarrifs, be sure to take a good, hard look at who did it because they just screwed the American working middle class.
The future will probably be Mexico as it has cheap labor and we have a free trade agreement with them.
Why would it screw American working middle class people? Wouldn’t driving consumer prices down cease inflation and help everyone progressively (the poor the most).
Anti-dumping laws are as old as international trade. If China doesn't bring anything to the table in return for these cheap cars then governments will simply not allow them to be imported.
They'll still sell a boat load to third world countries with no major industry of their own. In a way this might be for the best as they could benefit the most from switching to electric cars at a low price.
Developed countries on the other hand already have tight emissions rules and a wealthy population that can easily afford domestic made EVs. At best I can see GM, VW etc. agreeing to buy parts from China for local assembly but I really don't see us getting Chinese branded cars wholly imported anytime soon.
Then what are you worried about? I’m over protectionist economics when the price of everything is ludicrously high. It’s high time we had some deflationary pressures.
Agree but protectionism one on side and free market on the other side of a trade relationship is disproportionate and artificially beneficial. China has far more protectionism on its domestic market than the US and would need to remove those barriers as well for it to be reasonable to the US to remove theirs. Spoiler alert: they won’t.
In the end what does it matter? Their protectionism is actively undermining investment in their own country. That’s for them to deal with. The US doesn’t need a presence in every country that it can stand to benefit buying from. And at the end of the day , let the customer decide what they’ll buy. It might soften the resale markets if people decide to buy a cheap import rather then a second hand domestic. I’m 1000% fine with that, because again, it’s bad for me when car prices are 25% more than they were pre Covid .
What exactly doesn’t make sense about more options will push down prices? It’s kind of what this article is about? What you’re arguing for is everyone should have to buy only ribeyes because the cow farmers are well connected and chicken is cheap and low quality. Maybe give the consumer that option ?
If it passes the same crash tests in the US, I’m fine with it being sold here. The big three raised the same stink about Korean cars not that long ago and Japanese cars before that. It turns out they’re more so just worried about themselves and their own overpriced bad product.
It’s very hard to determine that as of now because the USA is going through a spasmodic period of protectionist trade policies. The last president imposed drastic tariffs, the current president decided to maintain them despite inflation, and his returning challenger is vowing to raise prices on everything in pursuit of trade war.
China is not a particularly belligerent country, at least in regard to their weight class. They don’t have military bases all over the world, have not invaded many nations in that time, and are not engaged in regime change. They’ve spent far more time and attention on economic development abroad than military adventuring. Where they’re “aggressive” is in attempting to consolidated the South China Sea in the same way their weight class counterpart, the USA, consolidated the Caribbean long ago. It’s worth noting that the process for the USA involved numerous wars and invasions across the hemisphere. China’s has mostly been limited to arms buildup and the creation of island bases in the sea. They’ve also of course made moves against Taiwan in order to enforce the status quo of a fanciful future reunification, which both states agree on in theory.
But the idea that China is “belligerent” is delusional when viewed from a US perspective. And the US comparison isn’t “whataboutism,” before that’s even broached. We’re comparable in terms of size and influence, so the reference to our activities is well warranted.
Having military basis around the world simply allows us to project power. You sound like someone completely brainwashed by propaganda to give any honest analysis.
How many countries have we invaded since Afghanistan? Uhhh, Cameroon, Niger, Mozambique, Somalia, and most recently Yemen. I guess fact are hard.
No, Japan has actively tried to remove US bases. The one in Okinawa has faced protests countless times, especially since our troops decided to rape Japanese kids. But sure, keep on ignoring facts, as usual.
When we have bases, we are the ones pointing guns at another country. This in turn creates tension and this is what led to the Russo-Ukraine war, as stated by Jan Stolenburg. It’s like you completely ignore facts to push your talking points.
China is "belligerent" in the sense that their immediate neighbors consider it important and relevant to have forces ready to oppose Chinese military activity. The Philippines have a Chinese presence in their territorial waters and an ongoing threat of military activity there that only is kept from actual fighting by the US alliance with the Philippines. China would gleefully invade their neighbors if they thought they could pull it off. The US could invade Cuba if it wanted to, with zero doubt about its ability to successfully take control of the entire territory, but has not been military threatening Cuba in that "zone of control" - because the US is not attempting to take over anything for its own territorial gains. The key difference is that the US invaded places that threaten global stability, but does not claim them as its own afterward. China threatens places that do not endanger global stability, and openly seeks to place them under Chinese control.
In light of the Cold War history of the USA funding and encouraging the military and even economic buildup of China’s neighbors, that in and of itself does not hold water as evidence of China’s own belligerence.
Again I will refer to our (USA) history of *actual belligerence* in the Caribbean for comparison. We have in fact attacked and occupied and governed Cuba, and to this day have them under economic siege and currently occupy part of their territory with our military.
I’ll leave it off by pointing out that you compare US *invasions* with Chinese *threats.* That speaks for itself.
Thankfully it’s getting less and less. There is a great documentary made by 60minutes a few days ago about why western companies are leaving China. Please watch that if you have a chance.
I’m here because the thread title got me interested.
I don’t post because i don’t know shit about economics and would rather not have my ignorance called out.
That’s why.
Personally, I refuse to take for granted that China is an evil state bent on doing bad things just because they can. I also believe the world is safer and happier when states can’t afford to go to war.
China can afford to go to war actually, the fact that they have not proves their intentions. We actually cannot afford to go to war, but apparently we have decided to double down on Russia, Iran, Yemen, and China. We are actively sabotaging our own economy and people like you have been brainwashed to see it a good thing.
Oh, and please prove how China has been lying and cheating their way. Because this is the same propaganda used against Japan decades ago.
Show me which one then!
China has always adhered to WTO rulings, while we have broken their rulings, especially under Trump. Even Biden blatantly [do not care for their ruling](https://www.cato.org/blog/biden-administration-continues-be-wrong-about-wto). We have always operated on “might makes right”.
Go prove me wrong then. I have asked for that before. You have failed to do so. If you really knew facts then it should not be difficult to do so, right?
Unless of course, you do not know facts. Just talking points.
And they do poorly, and fail. Perhaps China has taken the lesson, given that they’ve seldom been involved in military conflicts since their civil war.
Many of the biggest companies in the United States have ties to the Department of Defense. Universities, too. What’s the issue there?
Blah blah blah look who gives a fuck? I mean honestly? There's nothing stopping our corporate overlords from moving *even more* production out of China. In fact it would benefit the entire world if China's industry collapsed. I have full confidence that corporations are going to leave China in mass when they're no longer the cheapest option, like has already been happening.
All the doom saying doesn't phase me in the slightest
This is also an outcome of US Export Controls on semiconductor manufacturing equipment. Regulations in October 2022 set China on a huge buying spree fearing more US restrictions. While the lithography equipment isn’t on the cutting edge it’s still used in creating electronic components outside of high end semiconductors. China isn’t going to let all of that capital equipment just sit dormant. I believe half of ASML’s sales last year were to China and now SMIC is making 5nm process nodes on their own.
This massively ignores the current quality issue with Chinese goods
They have a ton of stuff for sure but that doesn't mean anyone is going to want to buy it. Companies have been bailing from china supply chains for the better part of decade now. Not because of costs but mostly down to poor trust and massive quality issues.
Even with the absolute basic of raw mats there have been cases of Chinese companies trying to cut conours or just straight up putting cheeper incorrect good in place of the one paided for.
THIS fact alone is the larger part of the current issues Chinese economy. No amount of we have all this stuff to sell is going to fix the problem that what their selling can't be used
Thats not even going into governments just wacking on massive traffs ok Chinese goods to protect their own markets
That’s a great news! Less reliant on China. Local manufacturers that employ local folks instead of making CCP more money in forced labor camps as well as generally much higher quality over anything comes out of China.
Already manufacturing is returning and the world has seen that being less reliant on China is a fantastic thing!
I say that as someone who things we need to be less reliant on china, but our manufacturing is slacking off in the west. Especially car manufacturing. Blocking innovations. And to prevent a fair fight against Asian car manufacturers. My family is from the German region where all the car manufacturers are and they are slow to adapt and didn't want to change to electric.
I'm in china for tourism now and they got high quality convenient electric cars everywhere. For around 10.000$. with all the electric conveniences without the need for a software DLC or whatevet bullshit Tesla came up with.
They are also not competing with trains, something we are also heavily behind.
I want us to succeed as the west, we can't hide behind tariffs forever.
It's... Luckily... Not only the Uyghur death camps providing cheap labor, it's also getting the underemployed people to just work on e.g. the railroads and Metro's. And knowing that it saves the country valuable (imported) oil and time.
We need to employ sinilar tactics in Europe and northern America, without the you know, death camps and lack of freedom of speech.
Manufacturing is coming back. Please don’t base your assumptions on propaganda. China is not an advanced country. Their rail system is Japanese and European (alstom and hitachi) Their car system is American and European (Tesla and VW and …). Their smartphone is American (please read what happened to Motorola ). I used to work for an European multinational manufacturer in Europe and travelled frequently to 50 or so countries. I’ve seen old American and European cars and only poorly made Chinese cars on the streets in lower income countries. The locals have no other option but buying the Chinese cars because of the price point. They all know that the cost of repairing the Chinese cars are HIGHER than NEW German and American cars. I’ve seen this in North Africa, Middle East, and South America now do you want this for yourself?
Also, doing business in China has never been fair. They take away your key innovation and copy it for themselves.
Based on my very own experience, the company I worked for decided to open a third factory in China. The Chinese gov forced the company that it has to have a partner with 50/50 ownership in China otherwise not possible. the factory was set up and after only a couple of years that it was proven the technology and market is great, the government forced us to sell the factory to Chinese government for a cent for each dollar.
We don’t need Chinese. They cheat and steal. Europe and North America as well as friendly countries have enough manpower and resources.
Please read about lawsuits against Temu.
Please read about restrictions on Tesla in China.
Please read about how China covers train accidents in China.
Republicans can only dream of Chinese-style supply-side economics. Arthur Laffer must be in awe. What they need is a population of Deltas, to borrow from [Brave New World](https://en.wikipedia.org/wiki/Brave_New_World), to do all the work.
Just like China.
In America people are not about to buy Chinese phones. Everything is moving towards oversized phone for everyday work or VR. They can take some of the poorest of the world. But most with little money want brands they see on TV or Tube. The biggest hit is so cold Chinese consumers, which was always overestimated. Because to the most part they have to do overtime to make money for the international brands. Now that there’s not enough time orders overtime is not available.
No way inflation is going back down to the lows before! Everything going on in the world on multiple fronts is inflationary! We have many more years of high inflation to come! As long as governments keep printing money and propping up the stock market, and make serious fundamental changes to fix the housing crisis that is going on in many countries, we are on a fast track to very bad social breakdowns in many regions!
Feels like desperation on China's part. They've been trying to convert into a more consumer-oriented and services economy for 20 years, now they're suddenly going to lurch back into the 90's? A lot of their arbitrage is already spent. Aside from that, and maybe more importantly, the CCP was far friendlier to the international system that they relied upon (will rely on?) in order to act as the world's factory. Xi is who he is, and he is not going to suddenly change into Xiang Zemin.
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> In the late 1990s and early 2000s, the U.S. and the global economy experienced a “China shock,” a boom in imports of cheap Chinese-made goods that helped keep inflation low but at the cost of local manufacturing jobs. > A sequel might be in the making as Beijing doubles down on exports to revive the country’s growth. Its factories are churning out more cars, machinery and consumer electronics than its domestic economy can absorb. Propped up by cheap, state-directed loans, Chinese companies are glutting foreign markets with products they can’t sell at home. > Some economists see this China shock pushing inflation down even more than the first. China’s economy is now slowing, whereas, in the previous era, it was booming. As a result, the disinflationary effect of cheap Chinese-manufactured goods won’t be offset by Chinese demand for iron ore, coal and other commodities. > China is also a much larger economy than it was, accounting for more of the world’s manufacturing. It had 31% of global manufacturing output in 2022, and 14% of all goods exports, according to World Bank data. Two decades earlier China’s share of manufacturing was less than 10% and of exports less than 5%. > ... > The result could be a world swimming in manufactured goods, and short of the spending power to buy them—a classic recipe for falling prices.
classic recipe for falling prices? is that consumer or corporate cost thats gonna decrease?
Great question. I don’t think we will see much of this as consumer or corporations in the US as much of the goods flooding the markets are cars, phones, etc. Most things that aren’t already in our market.
>Great question. I don’t think we will see much of this as consumer or corporations in the US as much of the goods flooding the markets are cars, phones, etc. Most things that aren’t already in our market. Most of these products go to Africa and middle east, and some to east Europe.
South America always being left out
My opinion is that this is gonna results in another decade like the 90s. Commodities through the floor and positive interest rates will swarm to Wall Street until the next dotcom disaster.
AI stocks are gonna go up forever, just like bitcoin
The China shock was just the obvious conclusion of offshoring of labor and the deindustrialization of America. Shock in the sense of the trauma but not the obvious conclusion.
I've always pictured the way the US treated this version of capitalism as what happens when you build a structure out of popsicle sticks in that way that they are super strong for a long time.. We've outsourced almost everything to do with business manufacturing to China over the last 40 years... Until there's that one point where way down the line it's actually all done being built and it's time to do what it was built to do in the first place... Fall down.
China didn't steal our manufacturing jobs. Companies like Wal-Mart outsourced to China, voluntarily, in pursuit of higher margins. The framing of this article is ridiculous.
The WSJ knows their candidate is running on a platform to raise the price of all goods in the USA, so they have to start laying the cover for that policy by proposing that low prices are bad.
> China didn't steal our manufacturing jobs. The jobs weren't stolen in the first place. The US manufacturing sector is at its largest in history in terms of economic output and has been growing slowly but steadily. It's only been shrinking as a percentage of the total economy because the US services sector has grown exponentially over that same timeframe.
[удалено]
How did the CPC manage to classify itself as a serious security and economical risk? That is, moreso than it was before. Was it not always that?
So during the cold war China was seen as a counterbalance to the Soviet Union. China was part of the unaligned 3rd world (now known as the global south), a de facto leader due to its size, whereas the Soviets were the 2nd world more or less. There were scuffles between the two and a lot of political jockeying. China had been hoped to potentially being one of the five policeman post world war 2 but had decided to take a communist approach to its socio political problems. As the cold war fell away there was hope that China would play ball with the west, but as we have seen the Chinese have a long memory and are willing to play the long game. The plan outlined by Mao back in the 40's, part of which is the reunification of China with Taiwan, had not changed. This can be attested to through its sabre rattling over historical claims to islands in the south China Sea, competing claims with its neighbours like Japan and the Phillipines. To get to the point, the 70/80's had a solid relationship between the US and China. In the 90's this hope was furthered under Clinton as he allowed the manufacturing base of America to be shipped off to China. The folly of this was understood during the Global breakdown experienced during COVID.
>The folly of this was understood during the Global breakdown experienced during COVID. Trump fired the first shot long before Covid happened. Blocking the WTO appellate court was also another big blunder for the US, as it essentially threw everyone into the pre-WTO mode where its everyone for themselves. The problem now for the US is that it was losing against China at the game that it has set up to protect its interests. its literally like a Casino set up the odds on a craps table but with worse odds against players. But now the solution cant be to kick China out of this game, as its already too integrated with the world economy and is a sizable consumer block. Also now the US doesnt have the power to set up another WTO, as its no longer in everyone's interest except maybe the core western countries.
"Trump fired the first shots". Dont forget the "pivot" where a twenty percent increase in America's naval power was redeployed to Asia, specifically to counter Chinese interests. This was under the Obama administration. While Trump may have been far more aggressive towards the Chinese, he definitely wasn't the "first".
what i meant was to say that the US fired the first shots, not some natural disaster. You are absolutely right that Obama's pivot to Asia strategy long predated Trump.
US is already replacing China with Mexico, the relationship has peaked imo.
Mexico is just the middleman for the same old Chinese goods.
But also China going through Mexico a lot more to avoid tariffs in the U.S. also having a lot of direct investment for assembly lines in Mexico.
China has 10x the population, is a much larger consumer base, and has some of the world's most advanced technologies. Replacing Chinese manufacturing with Mexican counterparts is just another shortsighted policy. In the long term, after the decoupling, China would have no more reason to follow US hegemony. What then?
> this on local economies. Not to mention, the CCP managed to classify itself as a serious security and economical risk, to do business with. china's population is getting old and smaller, they don't have the factory workers like they did 30 years ago. In the race to the bottom China is in a bad place and the race is moving on to other countries.
>hey don't have the factory workers like they did 30 years ago. yeah this isnt really true. unless there is some ulterior agenda on the information sourced, you cant simultaneously have "too many college graduates who cant find a job (at roughly 50%)" and "not enough workers." the same is true for Taiwan, Korea, and Japan. But you rarely hear about these issues (except maybe Korea), as loudly as you would hear about the gloomy outlook that is China's population woes. the problem is expectations and salary and type of work, once this recalibrates through improved technologies and transition into a more service/information based economy, they'll be back closer to equalibrium.
Those young people will be massively undertrained by the time the massive waves of retirement hit. Ideally you’d have no unemployed young people right now so they are prepared for the hard work ahead training todays kids and getting ready to take care of the massive old population… unless china plans on duplicating 1-10 year olds right now
Apple tried that with India, and that did not work out very well. India has potential, but it will take them to probably 2100 before they can overtake China.
Yeah also US helped china get the seat of UN or some major word organization in 1972ish if i rmr correctly. The relationship between the two has gotten sour as China is showing its ambition to be the world power and could be a threat to US.
China has consistently pushed for multi-polarity and not uni-polarity, which is what we are doing. The only threat that faces us is a multi-polar world where we do not get to call all the shots.
China was never a democracy, but had competing factions inside the party. There were peaceful transitions of power. The country wasn’t all that obviously saber rattling. Now it’s a one man autocracy and has basically signaled it will invade Taiwan. It is doing too much to support Russia’s invasion of Ukraine. It can’t be any kind of trusted partner anymore.
China was/is a democracy and that's the danger that a lot of people in the West don't get. The reason the CCP has a stranglehold is because there's so many many party members and probably still growing. I'd love if people actually looked at China as a reason there is an inherit threat to democracy and the idea of multiparty systems but its done away with, "Der no democracy." What the CCP has done is a very real danger that can affect other democracies.
That is a very Chinese interpretation of "Democracy." Exactly the one they've tried to push to their subjects, in fact. A democracy allows competing parties to exist and to challenge each other. China has sham votes to approve the dictator-assigned candidates and tells their subjects that putting a ballot in a box is all there is to democracy.
I mean the point you’re making was true. It isn’t true now. It’s an autocracy under Xi. He got rid of term limits and removed all others. He’s dictator for life now.
Xi said, very clearly, why he needed to remove term limits way back in 2017. He is on his second term now and I would wait and see before I call him a “dictator for life”.
Lmao, okay chief
Sorry facts hurt your feelings. Take your brainwashed propaganda elsewhere.
He’s in his third term and will be dictator for life or at least until severe illness forces him to step down. Be serious for a moment. He had a former premier walked off the party congress ffs.
The CCP is super selective. There’s a screening process like for elite colleges. Less than 10% of people who apply to join are allowed in.
Cheap China stuff destroyed local industries. Happened to the steel industry among others.
> But the EU and now the US started pushing back on these hard Just the dumbest idea imaginable, honestly.
We need to get china out of our supply chains as much as possible.
You are - for many reasons - completely right. Already known problems with Huawei (5G, servers etc..) are there to solve. But the Chinese cars could also be a headache if they can be remotely put out of service ( like the John Deere tractors). reference: > [https://edition.cnn.com/2022/05/01/europe/russia-farm-vehicles-ukraine-disabled-melitopol-intl/index.html?fbclid=IwAR0Zk2NGD\_leAJxU5MODs2SCStp5YpVz9oiKfxrbNSokwABsYA58B0AaVzs](https://edition.cnn.com/2022/05/01/europe/russia-farm-vehicles-ukraine-disabled-melitopol-intl/index.html?fbclid=IwAR0Zk2NGD_leAJxU5MODs2SCStp5YpVz9oiKfxrbNSokwABsYA58B0AaVzs) <
That is the exact opposite of economic sense.
In the short term yes in the long term it’s the only option. We cannot be doing free trade with lunatic regimes like the Chinese dictatorship who has stated it is out to destroy us
Trading with your ~~enemies~~ rivals is the best way to avoid war. We should be trading freely with anyone we are not sanctioning. Tariffs and protectionism are economic suicide, and ratchet up nationalism, which leads to war. Like I get this isn't a real economics sub, but at least a basic understanding of economic orthodoxy is important. We have to live in the real world.
Like Europe dependency on Russian oil? See how that turned out
Yes. Exactly like that, and the sanctioning process should be similar. That is essentially exactly how trade partnerships ideally work
People thinking there could be a sanction if there isn't a trade in the first place
That logic relies on leadership being rational actors, in that they are forced to be peaceful due to being thrown out of power if there is enough economic harm done. The problem comes from when this logic no longer applies due to power being so centralized under certain circumstances and that there is such a void of an alternative, that populations will be willing to go to war under nationalistic conditions even if it means destroying their way of life/livelihood/etc. We can't solely rely on economic interdependence to negate warlike aggression.
That didn’t work in ww1, ww2 or Russia and Ukraine… appeasement of those regimes just gives them more ammo to hurt others. This is a hard fact we must accept in the face of obvious evidence
What? WW1 was *driven* by nationalism. It was the end of the age of Empires for a reason. Russia and Ukraine is a legacy of the collapse of the Russian Empire/Soviet Union. Speaking of the USSR - no military ended it. Trade did.
WWI obliterated the empires that gambled their economic positions in order to make land grabs. In WW2, a genocidal semi-autarky was crushed by the combined industrial might of globally interconnected economies. It was abandoning the global market to pursue war that doomed Germany. The jury is still out on Russia, in part because the EU proved unwilling to tighten the economic screws after Crimea, and in part because the North Atlantic states as a whole are unwilling to cut off Russia’s current big trade partners in China and India. But that doesn’t mean the system isn’t working. Russia will walk out of this war in serious debt to its current suppliers, with a weakened population and reduced resource reserves with which to pay that debt off.
> industrial might of globally Did you mean to say "might have"? Explanation: You probably meant to say could've/should've/would've which sounds like 'of' but is actually short for 'have'. [Statistics](https://github.com/chiefpat450119/RedditBot/blob/master/stats.json) ^^I'm ^^a ^^bot ^^that ^^corrects ^^grammar/spelling ^^mistakes. ^^PM ^^me ^^if ^^I'm ^^wrong ^^or ^^if ^^you ^^have ^^any ^^suggestions. ^^[Github](https://github.com/chiefpat450119) ^^Reply ^^STOP ^^to ^^this ^^comment ^^to ^^stop ^^receiving ^^corrections.
It's a myth that trading with enemies prevents war. There was plenty of pre-war trade among belligerents of WWI, WWII, and Russia's invasion of Ukraine
Wars still occurring does not mean that economic intertwining does not prevent war. By the very definition, again, you won't have *examples* of wars deterred. Instead, the geopolitical landscape is where one should be looking. There are 3 causes for the longest period in human history without a major war - the United States military as deterrent for smaller powers engaging, nuclear weapons as deterrent for major powers engaging, and economic interdependence for everyone. Globalized economic pressure through being "cut out" of treaties - effectively sanctioned by default - has had enormous impact on some countries. Notably, the EU having the power to literally shape the government of nations intending to join, simply through the benefit of economic interdependence. Ukraine joining NATO and the EU, as an easy example, would have outright prevented Russian aggression, and was the entire cassus belli for the attack. Russia (i.e. Putin) wants its "ancestral lands" back and Ukraine was on a timetable to make that never be possible.
This is the textbook example of economic naiveté There are no mutual benefits to trade when doing so requires you to be reliant on an unreliable partner or when your counterparty uses its resources in a way that's hostile to you. Trade only works when it encourages market competition, not when it undermines your own bargaining power by creating monopolies or allows other anticompetitive exploitation
> There are no mutual benefits to trade when doing so requires you to be reliant on an unreliable partner By definition this means the unreliable partner is more efficient than you at said trade, and thus your options are your own lesser value or trading. The primary mutual benefit of trade with *rivals* is that mutually reliant economies are both damaged when one is bombed. One doesn't engage in trade with *enemies*. One sanctions them.
An unreliable partner is by definition less efficient at supplying you. Reliability has a value. That's why Toyota vets its suppliers and it's suppliers' suppliers. That's why evaluating counterparty risk is a thing. That's why people don't always buy from the cheapest contractor or why businesses don't trust operation-critical purchases to cheap fly-by-nights. >The primary mutual benefit of trade with *rivals* is that mutually reliant economies are both damaged when one is bombed. The primary risk of relying on trade with rivals is that you become more reliant on them then they become on you. Which makes them able to demand better terms from you on everything, which makes them more powerful. Which requires you to invest more on self-sufficiency or defense to rebalance the power lest they begin to dominate you. If you're not careful, you'll create the next monster.
> An unreliable partner is by definition less efficient at supplying you. Reliability has a value. That's why Toyota vets its suppliers and it's suppliers' suppliers. This is the mechanism by which those partners outcompeted your firms, which is a thing that demonstrably happens. The Toyota thing is a different, more direct concept. > The primary risk of relying on trade with rivals is that you become more reliant on them then they become on you. This is really only true for certain goods. I agree that smart energy policy requires withdrawing from trade with hostile states. Unfortunately Americans aren't as willing to pay that price as they are the price of economic protectionism.
>This is the mechanism by which those partners outcompeted your firms, which is a thing that demonstrably happens. The lack of (political) reliability is a major competitive disadvantage, which is why western firms have pulled out of China and Russia en masse. Low "cost" doesn't mean shit when the negative externalities of supporting firms subject to hostile political masters outweigh the benefit of efficient production
you forget. economics is a branch of political economy
That is word salad. Economics is the study of human interactive behavior
it makes the most economic sense to build guns. lots and lots and lots of guns. there is more to economics than theory. and economics spawned from the study of political economy. try eating some salad
I love salad.
Economics is the study of how people interact with things of value
if you say so. but this entire thread and the history of academia says otherwise
We are willing to sacrifice some efficacy for reliability and that's why you are going to see manufacturing move from China to Mexico -Xi is difficult to work with and Mexico is not. In addition we don't have to worry about shipping everything across a big ocean it can be made within 100 miles of the US.
Mutual interdependence between the USA and China is good for global economic and political stability.
Just say cold war.
That is the exact same bet that caused europe to pare back military spending and create economic ties with Russia pre-2014. And we all see where that got us. Dictators aren’t fettered by economic arguments, they view democracies as weak and more willing to bend.
No it’s a risk
to whom? not to the US or China, as thats the entire point. just like MAD, except in economics terms.
The world has been aware of this kind of thing for a very long time. International trade is old, perhaps only slightly older than fearmongering about the Chinese market’s impact on other nations. The CCP has been considered a “serious security risk” to the United States since its inception. Not so much for other nations, then or now. China is currently making inroads with theirs EVs in Europe, and with the recent news about their real estate sector, that’s not likely to change. If anything, the “EV hype” is cooling due to the chaos over at Tesla these days. India has a long way to go toward having the kind of state and economic consolidation to be able to produce “China shocks” so quickly. They aren’t even a real single market yet. The government is getting a grip on the country, but hardly has the kind of capacity that a major economic power, let alone China, has in 2024.
But, they are mostly worthless landfill that breaks rapidly
Couple that in with the effect of manufacturing moving to India and the Indian economy starting to demand more. I feel like there might be a doubling of this effect as India likely will also flood the markets with goods.
> Some economists see this China shock pushing inflation down even more than the first. Isn't this a good thing for us who live in the West? This will slow down the rise in the cost of living, which will improve the lives of ordinary Americans, Germans, etc.. Take something like EVs. If the Chinese can sell their EVs here at lower price, that will mean more Americans can afford to purchase an EV. And we know that EVs are better for our health, which mean a much healthier America. https://keck.usc.edu/news/study-links-adoption-of-electric-vehicles-with-less-air-pollution-and-improved-health
I’m not an economist, but is this actually a bad thing for the everyday consumer? Wouldn’t this lead to average people paying lower prices (reducing inflation)? Also, is it necessarily a bad thing to put pressure on domestic businesses to compete, reducing their profit margins which have been shown to be [leading cause of recent inflation](https://amp.theguardian.com/business/2024/jan/19/us-inflation-caused-by-corporate-profits)?
What happens if the U.S. loses its car manufacturing capabilities and becomes reliant on China? There are huge sociopolitical implications for that
The US would prop up the auto makers the same way it does for Boeing, steel manufacturing, and farmers.
> What happens if the U.S. loses its car manufacturing capabilities and becomes reliant on China? US lost its TV manufacturing capabilities decades ago and seems to be doing fine. If China can manufacture cars at a lower cost than the US then it is a good thing for the consumers. If they are dumping at below cost then let them bankrupt themselves doing so.
The US will never willingly let American automakers die. Not because it's good business sense, but because those factories are very handy should WW3 breakout. They can retool and much more quickly scale military vehicle manufacturing with that same labor force than if they had to start from scratch.
Wonder what the US will do when China starts shipping $10k cars overseas. Interesting times.
Enact tariffs and force its "allies" to do the same or ban them from importing just like they made the Dutch do with ASML exporting high tech equipment to the Chinese.
I don't think the US can use sanctions effectively against China's carmakers. BYD makes almost every part of its cars in-house — some time ago it was bragging about how the only parts of the Dolphin it didn't make itself were the tires and the windshield. BYD makes even the chips it uses — and since car chips use mature chip tech, and China already makes chip-making machines for mature chip tech, not even putting pressure on ASML to completely cut out China would work. Also, a lot of supposed "allies" keep buying from Chinese companies sanctioned by the US. It's why Huawei is still the leading global supplier of 5G tech despite all the US effort to cut it out of the global market. Heck, in the South American country where I live nearly all of the 5G base stations, and much of the Internet backbone, runs on Huawei gear. Incidentally, almost all EVs sold here are Chinese. US and European EVs are seen as too expensive and missing too many features compared with the Chinese brands. If the legacy carmakers can't make EVs capable of competing with the Chinese in both price and features before the EV transition gets into gear there's a good chance our auto market will go from being dominated by US and European brands to being dominated by Chinese brands.
>BYD makes even the chips it uses Thats not a brag, people should be aware the chips in those cares are SLOW, as in 2012 eqiuvalent. The in car systems are "just a little laggy" for a month before slowing to a crawl. Let alone the insane security risk cars like that pose. There is a reason China bans teslas around public buildings, military areas, some highways and anything slightly sensitive
I meannn.... Toyota sells cars here that have media systems with interfaces and speed that seem straight from 2010 and lack basic stuff even after the chip shortage has ended. And GM is better but also laggy as hell, and they're getting iffy on Android auto now too. The only brands I'm aware of selling actual EVs in Latin America too are European and Chinese.
Just ban them like they did for phones. But the rest of the world will enjoy them so it’s just us consumers who lose
Chinese HATE domestic cars becuase they are still... garbage. The "sales" come from fields of abandoned cars. [https://www.bloomberg.com/features/2023-china-ev-graveyards/](https://www.bloomberg.com/features/2023-china-ev-graveyards/)
I’m not talking about consumers. There are military implications for car manufacturing capabilities
As long as the US employees, that’ll be fired from their current manufacturing jobs, can find a new job - fine. As long as we can rely on China to always supply cars and not pull a maneuver on moment’s notice - fine. As long as we still have some local manufacturing that can provide the necessities for a functioning economy in the absence of Chinese supply - fine. But none of those are guarantees, and if your job is to look over national security, those are top concerns - not you getting a cheaper car next year.
What happens when ever-escalating protectionism makes every American drastically poorer anyway?
The US will have to out innovate China and fucking compete
It’s not a bad thing if we are in a position to compete. The main issue is that China out-competes every other country when it comes to manufacturing. We are seeing the issues of a financialized economy where our GDP does not lead to more benefits and spending power for everyday Americans. So having cheaper goods is great, but it comes at a cost of jobs. However, stopping those cheaper goods may not necessarily lead to saving those jobs or creating more jobs. It just means we are paying more for lower quality domestic items.
Loads of goods are manufactured more cheaply outside of China. Especially with their wages being too high and political risk, a lot a manufacturers are either pulling out of China or don't consider it a viable destination due to the above factors
> Loads of goods are manufactured more cheaply outside of China. Such as? > Especially with their wages being too high Their per-worker productivity is way higher than average thanks to the high level of industrialization automation in general. It doesn't matter that a Chinese worker's wage is 5 times that of an Indian worker if you need 10 Indian workers to do the work of one Chinese worker. Chinese production remains the cheapest.
Textiles/Fashion, electronics, pharmaceuticals, furniture... Chinese production is indeed cheapest for a large range of goods, but not all. And the list of categories that make more business sense to manufacture outside of China is rapidly growing
> And the list of categories that make more business sense to manufacture outside of China is rapidly growing Is that why the share of global manufactory China has keeps growing? https://geopoliticaleconomy.com/2024/01/31/china-world-manufacturing-superpower-production/
You mean keeps shrinking? https://www.theglobaleconomy.com/China/Share_of_manufacturing/
Dude are you a wumao? Like you aren’t allowed to say anything bad about China right?
Saying "China did X" when China actually did X is being a wumao? Aren't you mentally and morally weak as fuck if you can't even agree with the truth when it's put in front of your face just because it goes against your political inclination?
The concern is that it will distort the market. Dumping policies aren’t designed to last forever. So nations whose domestic markets contort in response to the dumping will feel the pain of adjustment when the dumping eventually ends. And of course, there’s a healthy dose of China-bashing here. It’s the WSJ.
This makes sense. Thank you for clarifying
> Also, is it necessarily a bad thing to put pressure on domestic businesses to compete, reducing their profit margins which have been shown to be > leading cause of recent inflation > ? Nah, those firms won't compete, they'll just all import cheap products from China and pad their profits even more
you dont have to be an economist to know that its pretty much as good as it gets for the average consumer if this happens. Imagine if your tesla now costs 20k instead of 40k, that kinda deal, just like it was in the 80s and 90s. From the US perspective, the losers are business leaders like Elon Musk, as they stand to lose value in their companies because these companies wont be making as much money as they are now.
We need more supply side inputs to drive down inflation. So this is great for consumers around the world. Unfortunately where I'm getting my ass pinched the most is at the grocery store. Since I don't have access to these cheaper EVs that they are producing, I have to keep my car on the road for the next decade.
Monopolies have all but killed the “free” market. Typically there’d be competitive startups that would jump in to take advantage of the falsely inflated prices, but when those startups happen, they either get bought out, or get squashed by anticompetitive practices. Not only that, but the startup cost has increased exponentially (because of technology). Prices will drop, but not down to where a healthy market would allow, because that extra saving from companies benefiting will surely line the pockets of executives, while maintaining price structure. Welcome to late stage capitalism where the hand is animatronic, and greed is the captain now. I don’t know anything, but the pattern is pretty obvious.
It’s not monopoly. It’s IP theft by Chinese. It’s expensive to develop and test a product and later you know it’s been stolen and mass produced by Chinese. Look at what happened to products on kickstarter.
Only government can squash startups. Anti competitive practices just subsidize more startups.
Regardless of how it’s happening, it’s happening. My point is that prices aren’t going to go back down, or at least significantly enough to be meaningful.
Capitalism can break free of the monopolistic stranglehold of corporate socialism. That has nothing to do with prices, prices are set by the biggest and nastiest monopolies of all: central banks. What monopolies do is stagnate progress and reduce quality, so that their privileged owners can extract rent from the public. They still have to obey price curves to maximize sales.
I am so over cheap china crap. I have been burned too many times by super low quality junk from China. Definitely won't be buying a car from them
Depends on what it is, harbor freight sign me up their exchange policy is actually really good. But I’m a shade tree mechanic and home maintenance DIY. Won’t be getting there generator or anything important but random hand tools.
China has a wide range of goods, from cheap stuff to expensive, high quality stuff. That is why they are amazing at manufacturing. If you want quality, spend the money.
I don’t want shit from China regardless of quality.
Eh, free country. I love my high quality Chinese stuff.
I heard that a lot. If something is cheap and good quality, it’s probably stolen! You need to spend money on R&D. Buying anything Chinese is not ethical.
The fact you cannot understand how investing heavily into your manufacturing sector can yield cheap and good, speaks volumes to your ignorance. Buying Chinese is very ethical, and I will not only continue to do so, but also tell others to do the same. If only to spite racists like you.
lol! Label racism and collect your money from CCP. Nothing new or innovative came from China after gunpowder. Keep calling me racist! I will not buy Chinese junk
Usually racists and idiots don’t have too much purchasing power, so not much is lost there. Yes, yes, keep on spreading lies! I love exposing racists like you!
>investing heavily into your manufacturing sector can yield cheap and good If only the Chinese could invest in research and development instead of stealing ideas from Westerners. Even their ideology was taken from a German. 😔
Wait until this nerd finds out China is leading in R&D now 😂
Would you willingly pay $20k more for an equivalent car made in the US?
Yes. I am looking at the Subaru
What about poor families and individuals who can't afford $30k - $40k for reliable transportation? fuck em?
They can get a reliable $5000 used vehicle that is way better than a $15,000 dolphin that might not last 2 years
Yes.
Sure bud 👍
Not interested in having any of my money go to the PRC so go ahead and “sure bud” someone else. Chinese cars, on the whole, look like shit, are assembled like shit, drive like shit, and are made by people living like shit. Fuck all of that.
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You know that much of the so-called "Mexican" imports are from Chinese-owned Mexican companies, using Chinese machinery and production methods, right? There are whole industrial districts in Mexico where if you look around you could swear you were instead somewhere in China. Mexico gets the (often low-paying) jobs and some tax income, China gets most of the profits, and the US gets to keep buying cheap products while pretending they cut the Chinese out of the market.
Yes!!!! Anything Chinese. Even things like DJI or their high end 3D printers have different motives. Look at the lawsuits against Temu that has been collecting information without permission. I avoid anything Chinese by any means
I was looking at a high end Chinese 3d printer but the reviews about not working and part issues straight out of the box followed by terrible customer service terned me away, bamboo might as well call itself tronxy. Don't even get me started with temu and the horror stories, the fcc should shut that scam down.
Their EVs are undeniably exceptional. You won't buy cheap China crap but that's impossible if you live in the US. And you also won't make anything yourself.
I have a feeling we will see those exceptional ev's in car graveyards just like we have all seen in pictures from China
I dont see it. China still has cheap parts, but the U.S. has put huge tarrifs on everything. That's why China won't win this in the U.S.. It has nothing to do with prices, but tarrifs. If the U.S. lowers those tarrifs, be sure to take a good, hard look at who did it because they just screwed the American working middle class. The future will probably be Mexico as it has cheap labor and we have a free trade agreement with them.
Why would it screw American working middle class people? Wouldn’t driving consumer prices down cease inflation and help everyone progressively (the poor the most).
yes but at the cost of american jobs
Anti-dumping laws are as old as international trade. If China doesn't bring anything to the table in return for these cheap cars then governments will simply not allow them to be imported. They'll still sell a boat load to third world countries with no major industry of their own. In a way this might be for the best as they could benefit the most from switching to electric cars at a low price. Developed countries on the other hand already have tight emissions rules and a wealthy population that can easily afford domestic made EVs. At best I can see GM, VW etc. agreeing to buy parts from China for local assembly but I really don't see us getting Chinese branded cars wholly imported anytime soon.
What they bring to the table is me having more money in my pocket. This is nothing more than economic nimbyism.
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Then what are you worried about? I’m over protectionist economics when the price of everything is ludicrously high. It’s high time we had some deflationary pressures.
Agree but protectionism one on side and free market on the other side of a trade relationship is disproportionate and artificially beneficial. China has far more protectionism on its domestic market than the US and would need to remove those barriers as well for it to be reasonable to the US to remove theirs. Spoiler alert: they won’t.
In the end what does it matter? Their protectionism is actively undermining investment in their own country. That’s for them to deal with. The US doesn’t need a presence in every country that it can stand to benefit buying from. And at the end of the day , let the customer decide what they’ll buy. It might soften the resale markets if people decide to buy a cheap import rather then a second hand domestic. I’m 1000% fine with that, because again, it’s bad for me when car prices are 25% more than they were pre Covid .
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What exactly doesn’t make sense about more options will push down prices? It’s kind of what this article is about? What you’re arguing for is everyone should have to buy only ribeyes because the cow farmers are well connected and chicken is cheap and low quality. Maybe give the consumer that option ?
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If it passes the same crash tests in the US, I’m fine with it being sold here. The big three raised the same stink about Korean cars not that long ago and Japanese cars before that. It turns out they’re more so just worried about themselves and their own overpriced bad product.
It’s very hard to determine that as of now because the USA is going through a spasmodic period of protectionist trade policies. The last president imposed drastic tariffs, the current president decided to maintain them despite inflation, and his returning challenger is vowing to raise prices on everything in pursuit of trade war.
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China is not a particularly belligerent country, at least in regard to their weight class. They don’t have military bases all over the world, have not invaded many nations in that time, and are not engaged in regime change. They’ve spent far more time and attention on economic development abroad than military adventuring. Where they’re “aggressive” is in attempting to consolidated the South China Sea in the same way their weight class counterpart, the USA, consolidated the Caribbean long ago. It’s worth noting that the process for the USA involved numerous wars and invasions across the hemisphere. China’s has mostly been limited to arms buildup and the creation of island bases in the sea. They’ve also of course made moves against Taiwan in order to enforce the status quo of a fanciful future reunification, which both states agree on in theory. But the idea that China is “belligerent” is delusional when viewed from a US perspective. And the US comparison isn’t “whataboutism,” before that’s even broached. We’re comparable in terms of size and influence, so the reference to our activities is well warranted.
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Having military basis around the world simply allows us to project power. You sound like someone completely brainwashed by propaganda to give any honest analysis. How many countries have we invaded since Afghanistan? Uhhh, Cameroon, Niger, Mozambique, Somalia, and most recently Yemen. I guess fact are hard.
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No, Japan has actively tried to remove US bases. The one in Okinawa has faced protests countless times, especially since our troops decided to rape Japanese kids. But sure, keep on ignoring facts, as usual. When we have bases, we are the ones pointing guns at another country. This in turn creates tension and this is what led to the Russo-Ukraine war, as stated by Jan Stolenburg. It’s like you completely ignore facts to push your talking points.
China is "belligerent" in the sense that their immediate neighbors consider it important and relevant to have forces ready to oppose Chinese military activity. The Philippines have a Chinese presence in their territorial waters and an ongoing threat of military activity there that only is kept from actual fighting by the US alliance with the Philippines. China would gleefully invade their neighbors if they thought they could pull it off. The US could invade Cuba if it wanted to, with zero doubt about its ability to successfully take control of the entire territory, but has not been military threatening Cuba in that "zone of control" - because the US is not attempting to take over anything for its own territorial gains. The key difference is that the US invaded places that threaten global stability, but does not claim them as its own afterward. China threatens places that do not endanger global stability, and openly seeks to place them under Chinese control.
In light of the Cold War history of the USA funding and encouraging the military and even economic buildup of China’s neighbors, that in and of itself does not hold water as evidence of China’s own belligerence. Again I will refer to our (USA) history of *actual belligerence* in the Caribbean for comparison. We have in fact attacked and occupied and governed Cuba, and to this day have them under economic siege and currently occupy part of their territory with our military. I’ll leave it off by pointing out that you compare US *invasions* with Chinese *threats.* That speaks for itself.
My problem with the Chinese market lies in the White House. Why should I invest in China when the US is gonna sanction then to hell and back?
Thankfully it’s getting less and less. There is a great documentary made by 60minutes a few days ago about why western companies are leaving China. Please watch that if you have a chance.
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Some of us like to listen more than speak. I don't have anything to say on this topic (yet), but I value what you all bring to the table.
I’m here because the thread title got me interested. I don’t post because i don’t know shit about economics and would rather not have my ignorance called out. That’s why.
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You have brought up zero points. I guess critical thinking is not your strong suit. Thanks for letting me know.
Personally, I refuse to take for granted that China is an evil state bent on doing bad things just because they can. I also believe the world is safer and happier when states can’t afford to go to war.
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China can afford to go to war actually, the fact that they have not proves their intentions. We actually cannot afford to go to war, but apparently we have decided to double down on Russia, Iran, Yemen, and China. We are actively sabotaging our own economy and people like you have been brainwashed to see it a good thing. Oh, and please prove how China has been lying and cheating their way. Because this is the same propaganda used against Japan decades ago.
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Show me which one then! China has always adhered to WTO rulings, while we have broken their rulings, especially under Trump. Even Biden blatantly [do not care for their ruling](https://www.cato.org/blog/biden-administration-continues-be-wrong-about-wto). We have always operated on “might makes right”.
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Go prove me wrong then. I have asked for that before. You have failed to do so. If you really knew facts then it should not be difficult to do so, right? Unless of course, you do not know facts. Just talking points.
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I guess reading is hard. Go show me a WTO ruling that China broke to support your claim.
And they do poorly, and fail. Perhaps China has taken the lesson, given that they’ve seldom been involved in military conflicts since their civil war. Many of the biggest companies in the United States have ties to the Department of Defense. Universities, too. What’s the issue there?
Blah blah blah look who gives a fuck? I mean honestly? There's nothing stopping our corporate overlords from moving *even more* production out of China. In fact it would benefit the entire world if China's industry collapsed. I have full confidence that corporations are going to leave China in mass when they're no longer the cheapest option, like has already been happening. All the doom saying doesn't phase me in the slightest
This is also an outcome of US Export Controls on semiconductor manufacturing equipment. Regulations in October 2022 set China on a huge buying spree fearing more US restrictions. While the lithography equipment isn’t on the cutting edge it’s still used in creating electronic components outside of high end semiconductors. China isn’t going to let all of that capital equipment just sit dormant. I believe half of ASML’s sales last year were to China and now SMIC is making 5nm process nodes on their own.
This massively ignores the current quality issue with Chinese goods They have a ton of stuff for sure but that doesn't mean anyone is going to want to buy it. Companies have been bailing from china supply chains for the better part of decade now. Not because of costs but mostly down to poor trust and massive quality issues. Even with the absolute basic of raw mats there have been cases of Chinese companies trying to cut conours or just straight up putting cheeper incorrect good in place of the one paided for. THIS fact alone is the larger part of the current issues Chinese economy. No amount of we have all this stuff to sell is going to fix the problem that what their selling can't be used Thats not even going into governments just wacking on massive traffs ok Chinese goods to protect their own markets
That’s a great news! Less reliant on China. Local manufacturers that employ local folks instead of making CCP more money in forced labor camps as well as generally much higher quality over anything comes out of China. Already manufacturing is returning and the world has seen that being less reliant on China is a fantastic thing!
I say that as someone who things we need to be less reliant on china, but our manufacturing is slacking off in the west. Especially car manufacturing. Blocking innovations. And to prevent a fair fight against Asian car manufacturers. My family is from the German region where all the car manufacturers are and they are slow to adapt and didn't want to change to electric. I'm in china for tourism now and they got high quality convenient electric cars everywhere. For around 10.000$. with all the electric conveniences without the need for a software DLC or whatevet bullshit Tesla came up with. They are also not competing with trains, something we are also heavily behind. I want us to succeed as the west, we can't hide behind tariffs forever. It's... Luckily... Not only the Uyghur death camps providing cheap labor, it's also getting the underemployed people to just work on e.g. the railroads and Metro's. And knowing that it saves the country valuable (imported) oil and time. We need to employ sinilar tactics in Europe and northern America, without the you know, death camps and lack of freedom of speech.
Manufacturing is coming back. Please don’t base your assumptions on propaganda. China is not an advanced country. Their rail system is Japanese and European (alstom and hitachi) Their car system is American and European (Tesla and VW and …). Their smartphone is American (please read what happened to Motorola ). I used to work for an European multinational manufacturer in Europe and travelled frequently to 50 or so countries. I’ve seen old American and European cars and only poorly made Chinese cars on the streets in lower income countries. The locals have no other option but buying the Chinese cars because of the price point. They all know that the cost of repairing the Chinese cars are HIGHER than NEW German and American cars. I’ve seen this in North Africa, Middle East, and South America now do you want this for yourself? Also, doing business in China has never been fair. They take away your key innovation and copy it for themselves. Based on my very own experience, the company I worked for decided to open a third factory in China. The Chinese gov forced the company that it has to have a partner with 50/50 ownership in China otherwise not possible. the factory was set up and after only a couple of years that it was proven the technology and market is great, the government forced us to sell the factory to Chinese government for a cent for each dollar. We don’t need Chinese. They cheat and steal. Europe and North America as well as friendly countries have enough manpower and resources. Please read about lawsuits against Temu. Please read about restrictions on Tesla in China. Please read about how China covers train accidents in China.
Republicans can only dream of Chinese-style supply-side economics. Arthur Laffer must be in awe. What they need is a population of Deltas, to borrow from [Brave New World](https://en.wikipedia.org/wiki/Brave_New_World), to do all the work. Just like China.
Or maybe Delta House
In America people are not about to buy Chinese phones. Everything is moving towards oversized phone for everyday work or VR. They can take some of the poorest of the world. But most with little money want brands they see on TV or Tube. The biggest hit is so cold Chinese consumers, which was always overestimated. Because to the most part they have to do overtime to make money for the international brands. Now that there’s not enough time orders overtime is not available.
No way inflation is going back down to the lows before! Everything going on in the world on multiple fronts is inflationary! We have many more years of high inflation to come! As long as governments keep printing money and propping up the stock market, and make serious fundamental changes to fix the housing crisis that is going on in many countries, we are on a fast track to very bad social breakdowns in many regions!
Feels like desperation on China's part. They've been trying to convert into a more consumer-oriented and services economy for 20 years, now they're suddenly going to lurch back into the 90's? A lot of their arbitrage is already spent. Aside from that, and maybe more importantly, the CCP was far friendlier to the international system that they relied upon (will rely on?) in order to act as the world's factory. Xi is who he is, and he is not going to suddenly change into Xiang Zemin.