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| ▲ | bobthepanda 16 hours ago | parent | next [-] | | They’re certainly good at building. Actually utilizing that capacity is something else entirely; there are factories less than ten years old shuttering due to overcapacity. https://www.nytimes.com/2024/04/23/business/china-auto-facto... And the rush to subsidize more capacity is a big contributor to local government debt burdens in China, which is estimated to leave Chinese debt to GDP at 117%. | | |
| ▲ | jdietrich 12 hours ago | parent | next [-] | | You are never going to get exactly the right amount of capacity, so the question is whether you want to err on the side of too much or too little. Too little might often be more efficient, but there are undeniable strategic benefits to having too much. The events of the last few years have taught us all some painful lessons about the hidden costs of JIT and lean. China might have got the balance wrong, but they aren't prima facie wrong. | | |
| ▲ | refulgentis 9 hours ago | parent [-] | | They are prima facie wrong, their overcapacity is bad and actively harmful, this isn't a sign of it succeeding, its a sign of desperation from it failing. There's a type of Western mind that gets distracted by their scale, and getting to build things we built a century ago. Dazzled by the spectacle, this misses that their economy is characterized by deflationary headwinds due to a massive, massive over-investment in property, and this just squeezes the toothpaste (debt taken on to goose GDP) to another side of the tube. (housing to batteries) | | |
| ▲ | sangnoir 8 hours ago | parent | next [-] | | > There's a type of Western mind that gets distracted by their scale, and getting to build things we built a century ago Where in the US can one find the secret, cross-country high-speed rail built in the roaring twenties?! There's also a type of western mind that automatically dismisses the odds of a different country succeeding, based on nothing but the fact that they are using a different approach (on the surface). It's a kind if circular reasoning: our system is the best because we're the best, because of the system we have. To subvert the Simpsons - "the best so far" Edit: I'm far from a Sinophile, but there's a certain willful blindness, concerning an almost religious belief that the west will prevail because it's the west, regardless of all the systemic weaknesses that show up again and again. It would suck for a dictator-for-life leading the biggest economy in the world, but healthy minds would introspect to see how we can do better, like we should, right? I have no doubt out leaders will pick the wrong lessons, like social credit scores and pervasive surveillance | | |
| ▲ | mike_hearn an hour ago | parent | next [-] | | > Where in the US can one find the secret, cross-country high-speed rail built in the roaring twenties?! Nowhere because the USA has an excellent internal flight and interstate highway system instead. Railways were already becoming uncompetitive by the 1920s and now live on mostly in parts of the world where they already exist, where land is at a premium. The reason people think China will crash is that their system isn't unique, has been tried many times before and eventually always fails. That isn't circular reasoning, it's reasoning based on prior experience. China is still a communist country: we know how that story ends and why. Remember that for much of the history of the USSR people in the west were dazzled by its rapid industrialization and apparent achievements. First country to put a man in space! Many people in that era genuinely wondered if central planning was just a superior way to do things. In hindsight we can say that it wasn't: with enormous focus such economies were able to pull off heavy engineering projects at scale, but at the cost of ignoring consumer goods and with a dysfunctional economy that was brittle to its core. End result: when Yeltsin visited NASA in the 1980s he demanded a surprise inspection of a local supermarket. NASA didn't impress him, but the 30,000+ products for sale in a mundane shop blew him away. He was shaken to his core and cried on the flight home, asking himself what they had done to Russia's poor people. The USSR collapsed just a few years later, Yeltsin became president and moved Russia in the direction of a market economy. | | |
| ▲ | simgt 28 minutes ago | parent [-] | | > Nowhere because the USA has an excellent internal flight and interstate highway system instead Both being impossible to decouple from fossil fuels consumption at current scale, essentially. > End result: when Yeltsin visited NASA in the 1980s he demanded a surprise inspection of a local supermarket. NASA didn't impress him, but the 30,000+ products for sale in a mundane shop blew him away I have no idea whether this anecdote is true, but it wouldn't be surprise me one bit for an always-drank dude who made the army shell the parliament of his own country. |
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| ▲ | corimaith 2 hours ago | parent | prev | next [-] | | From an East Asian perspective what China is doing really isn't anything new and with the same pitfalls as the former Asian tigers. >our system is the best because we're the best, because of the system we have. This isn't what's happening at all. The causes and reasons why infrastructure and Western cities are so bad have been studied for decades and are well known, just as we've been studying what makes Tokyo or Hong Kong work so well. People are constantly critiquing the underlying system of incentives and entangled interests, you can hundreds of popular threads on HN, Reddit, MSM, hell even with Elon Musk's DOGE. The only time when I see the mythical self-convinced westerner evoked is precisely when critique of other cultures come in, often from cultures that feel a need to constantly defend themselves. | |
| ▲ | hbarka 7 hours ago | parent | prev | next [-] | | You don’t have to apologize, man. I was on a Pullman train once but it wasn’t quite a bullet train. I also rode a Western train named Orient Express. | |
| ▲ | Yeul 2 hours ago | parent | prev [-] | | People forget that China existed before communism.
Hell only Mao's idiotic experiment only lasted a few decades. China has always been capitalist. It's why you can find a store run by Chinese expats in the middle of the Suriname jungle. |
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| ▲ | mschuster91 5 hours ago | parent | prev [-] | | > There's a type of Western mind that gets distracted by their scale, and getting to build things we built a century ago. The thing is, overcapacity combined with the 996 week and labor exploitation can be used to outcompete any Western company - especially the old ones, who are spread around the country. Look at the supply chain of the established (i.e. everyone but Tesla) companies... dozens of manufacturing plants, thousands of suppliers, almost zero vertical integration because "manufacturing batteries, ECUs or windshield wipers is not our core competency, let Bosch do that". The only car manufacturer in the Western world not following that is Tesla. They have only very few, but very large factories that vertically integrate as much as possible on site, which not only gives them the advantage of cutting out the middlemen and their profit margin but also allows for much, much faster iteration cycles when everything is done in-house with no bureaucratic bullshit associated with change requests. Typically, a car model, its design and parts are fixed for around 2-5 years after the prototype manufacturing run, no changes are possible at all outside of maybe the software, unless the design change is necessary to meet regulatory compliance or if it's something horribly defective. Then the model gets a "rebrush" integrating a few changes, which lives on for another 2-3 years, and then a fully new iteration crops up. Tesla (and SpaceX) in contrast, they do iteration times of weeks. The disadvantage of that model is of course spare parts logistics and repair training, because holding stock for hundreds of subvariants and iterations is all but impossible, and that shows in every statistic for Tesla's average body shop waiting time. And to come back to China's automotive sector - they're copying that model of iterative speed just as well. We've seen them come from piles of junk barely roadworthy (or not road-legal in Europe at all) a few years ago to be able to fight heads-on with the European car giants. | | |
| ▲ | makerdiety 38 minutes ago | parent [-] | | Vertical integration, or a company claiming to take ownership of its supply chain, needs the democratic miracle that is exclusive security of supplies and their logistical distribution. No American company is ever going to militarily secure natural resources or a nanostate territory for its profits. And that's why all American companies (or any traditional, humanist company) will fail to achieve profits which ensure business survival. Don't ever go long on an investment in the democratic military-industrial complex, surely. Elon Musk's Tesla and SpaceX are like baby boomers disguising themselves as healthy young kids of the future. Don't be fooled or tempted by the likely spiked Kool-Aid drink. Partaking in the ideology of techno-commercialist futurism will yield a negative return on investment. As the conceptual dynamics of optimal manufacturing methods' soteriology, looked at through democratic aspirations, is nothing but booby trapped thinking. In other words, much more blunt words, Tesla's theoretical economics and strategy is a wannabe Mark Zuckerberg, especially when there's an impending giant rug pull in the investment arena. |
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| ▲ | seanmcdirmid 15 hours ago | parent | prev | next [-] | | China’s debt load fluctuates if you consider just the central government, local governments, and SOEs owned by either the central or local governments. Then you have private sector debt. SOEs are where a lot of china’s shadow debt comes from (localities ask SOEs they control to fund public projects of their own books), this is what pushes China’s debt load over 100%. | | |
| ▲ | bobthepanda 14 hours ago | parent [-] | | There’s that and the LGFVs financed by land sales which are all off official balance sheets. |
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| ▲ | ZeroGravitas 3 hours ago | parent | prev | next [-] | | 10-year old ICE car factories idling is a sign of success in their transition to NEV. > China has more than 100 factories with the capacity to build close to 40 million internal combustion engine cars a year. That is roughly twice as many as people in China want to buy, and sales of these cars are dropping fast as electric vehicles become more popular. | |
| ▲ | nl 8 hours ago | parent | prev [-] | | In the US this model is called venture capital - build lots of things knowing lots will fail. It's a model that creates big winners and lots of losers. Ironically of course the other alternative is central planning which is a hallmark of communist economic systems. > estimated to leave Chinese debt to GDP at 117% Japan is 264%, Singapore 168%, the US 129%, France 112%, Canada is 107%, UK 97%, Germany 66%, Australia 22%, Afghanistan 7.4%, Kuwait 2.1%. A debt ratio isn't particularly useful to know on it's own. |
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| ▲ | fyrn_ 5 hours ago | parent | prev | next [-] | | Efficient yes, generates good quality of life for the average citizen? Not as much.
Plenty the west can learn from China on how to do large public works though. | |
| ▲ | Dalewyn 14 hours ago | parent | prev | next [-] | | Authoritarian governments have always been better at ordering top to underlings to get shit done, because if you don't get shit done your shit is getting undone. Which is to say erased from history and replaced by someone who will. Basically, Chinese government wants a bigass factory and they will get a bigass factory because literally fuck you. This is in contrast to liberal governments where governments can incentivize, plead and beg, and in certain extraordinary cases force the matter at court-point, but ultimately is at the mercy and pleasure of the people governed. The flipside, of course, is that when authoritarian governments get it wrong they really get it wrong sometimes well past the point of recovery. Liberal governments getting it wrong have a lot more margin for error. | | |
| ▲ | codedokode 2 hours ago | parent | next [-] | | Liberal governments also implement unpleasant decisions, for example: paying subsidies for solar panels, electric vehicles, banning good old cheap lightbulbs, banning cheap plastic bags, cheap cars etc. | |
| ▲ | DiogenesKynikos 5 hours ago | parent | prev | next [-] | | This factory is being built by BYD, not the government, and not a state-owned enterprise. It's being built because BYD anticipates massive growth in demand for electric vehicles, not because of some arbitrary mandate. BYD is known for its ruthless price-cutting and drive for efficiency, so they're a very bad example to illustrate government bloat. | | |
| ▲ | ZeroGravitas 5 hours ago | parent [-] | | There is a mandate, several interconnected mandates actually. They're not arbitrary though, and many nations have them. China just seems to be translating that into action better. https://www.globalpolicywatch.com/2021/06/chinas-14th-five-y... | | |
| ▲ | DiogenesKynikos 5 hours ago | parent [-] | | There's a mandate for the government to support the development of the EV industry, and there are targets, but this factory is being built because BYD decided it makes economic sense for them, based on anticipated demand. The Chinese government is doing many things that increase demand, make it easy to scale up production, etc. For example, many Chinese cities are making it difficult to register new internal-combustion-engine vehicles. I'm also sure the local government has rolled out the red carpet for BYD in terms of permits, tax incentives, and so on. That's different from the government issuing a command, "Build us the largest EV factory in the world, regardless of economic viability!" That's how the previous comment came across. |
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| ▲ | meiraleal 14 hours ago | parent | prev | next [-] | | > Basically, Chinese government wants a bigass factory and they will get a bigass factory because literally fuck you. And what's the difference from the US government when it wants a bigass factory? Isn't the difference that the US also wanted China to build bigass factories? They got too good at that. | | |
| ▲ | Dalewyn 14 hours ago | parent [-] | | >And what's the difference from the US government when it wants a bigass factory? A normal business transaction, with all the good and bad parts thereof. The government can't force the issue unless they do it themselves which is usually not the case. | | |
| ▲ | chii 14 hours ago | parent [-] | | not just that, but the fact that the US gov't does hold elections means that what they do generally is in line with the people. At this moment, what the chinese gov't is doing is _also_ (presumably) in line with their people's wishes - after all, factories and exports means jobs and economic growth. It remains to be seen if this continues to be in the face of a potential war, tariffs, or some other external shock. |
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| ▲ | XorNot 10 hours ago | parent | prev [-] | | No, it's when an authoritarian government wants something they'll get it. And by get it I mean "they'll take your house, ignore any local environment concerns and possibly just demolish entire villages and generational livelihoods". Everyone seems to have some "oh how great it is they just get things done" as though they haven't diligently turned up to complain about some development application of the local council. Yeah, sunshine and rainbows I suppose provided you're thousands of miles away. | | |
| ▲ | MaxPock 6 hours ago | parent | next [-] | | From my visits to China, lI've come to conclude that Chinese people have more property rights than Westerners . I saw roads built around houses because villagers refused to sell. Eminent domain doesn't seem to exist there | |
| ▲ | Dalewyn 9 hours ago | parent | prev [-] | | Yes, actually. You repeated my argument only a bit more verbosely. >Basically, Chinese government wants a bigass factory and they will get a bigass factory because literally fuck you. |
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| ▲ | pixelatedindex 15 hours ago | parent | prev [-] | | > it seems they've latched on to something that works better than even democracy and capitalism Wouldn’t this just be plain old fashioned authoritarianism? America can latch on to this too, and we might based on how the Trump admin turns out. | | |
| ▲ | foxglacier 14 hours ago | parent | next [-] | | No. One required component is plain old fashioned oversupply of labor. America doesn't have that because all employable people are too rich. China also has an oversupply of skilled labor like engineers, in part because the threat of poverty is a strong motivator to get rich. America also lacks that which you can see in capable young people doing arts degrees with no thought to their future income because it doesn't matter - they'll still live comfortably even on minimum wage. | | |
| ▲ | throwaway2037 11 hours ago | parent | next [-] | | > they'll still live comfortably even on minimum wage.
You made a few good points until this one. No one in the US is living comfortably on minimum wage. | | |
| ▲ | aurareturn 10 hours ago | parent [-] | | It's relative. Relative to the rest of the world (and China), you can still live comfortably on minimum wage. | | |
| ▲ | rob74 8 hours ago | parent [-] | | You can still live comfortably on US minimum wage if your cost of living is like in China? | | |
| ▲ | meiraleal 4 hours ago | parent [-] | | What question is this? With a US minimum wage with China CoL you are rich. |
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| ▲ | Epa095 7 hours ago | parent | prev | next [-] | | It's not that life on minimal wage is comfortable, it's that we have been told for a generation now that 'just get a college degree and it will be fine'. Happily amplified by for-profit education investing a lot of money lying to young people (ads). Ask your local waiter with a college degree if they would have studied something else if they got the chance. My experience is that many would. | | |
| ▲ | meiraleal 4 hours ago | parent [-] | | > Ask your local waiter with a college degree if they would have studied something else if they got the chance. My experience is that many would. The problem of bad choices is orthogonal to the problem you are describing. |
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| ▲ | rangestransform 14 hours ago | parent | prev | next [-] | | That’s an easy enough problem to solve if we had the appetite to solve it, why couldn’t we legitimize the roles illegal immigrants currently do right now with a Singapore style migrant worker program? | | |
| ▲ | aurareturn 10 hours ago | parent | next [-] | | Probably because the average Chinese is far more skilled than your average illegal immigrant. It's not just raw labor force. It's capable engineers, designers, architects, etc. How is illegal immigration going to solve this? | | |
| ▲ | meiraleal 4 hours ago | parent [-] | | The amount of skilled people wanting to migrate to the US is almost infinite (unfortunately). If the US decided to open 20million green card spots, they would be filled. |
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| ▲ | throwaway2037 11 hours ago | parent | prev [-] | | To be clear, I think that there is an existing, legal migrant worker programme. They do most of the non-automated farm work in Central Valley California. Also, the Singapore system is a bit ugly if you look closely. I hope the US can do better. |
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| ▲ | meiraleal 14 hours ago | parent | prev [-] | | There is an estimation of 11-30 million undocumented immigrants in the US. The biggest difference is that in the US they are working on fast food jobs, house cleaning, babysitting. Different priorities. |
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| ▲ | DiogenesKynikos 5 hours ago | parent | prev [-] | | If the Trump administration (or the Biden administration) tried to enact an industrial policy like China, I think they would fail. It's not easy, and plenty of authoritarian governments fail at it. |
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