China’s plan to get around Western tariffs: Fill the world with factories
In response to the trade war, the Asian giant is investing billions of dollars abroad in plants, especially in industries linked to the energy transition
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So they're now outsourcing production to the West? We've really come full circle.
The difference is that they're not doing it at the expense of hollowing out their domestic industry. They're supplementing their own industry by building additional industry around the world.
"it's just supplemental" would have initially worked to describe us industry shifting out
investment is finite, so if you have the choice between a and b, investing more money in a is by definition investing in a at the expense of b
This problem only occurs in capitalist economies where finance capital directs development. Meanwhile, all the critical economy in China is state owned. In fact, the share of private industry in China has been shrinking. https://www.piie.com/research/piie-charts/2024/chinas-private-sector-has-lost-ground-state-sector-has-gained-share-among
it occurs when it's economically more efficient to move industry out of your country than to keep it in
unless you're suggesting china will willingly run the bulk of its industry with decreasing efficiency over time for the sake of keeping lower paying jobs domestically
These developments look increasingly structural. The authorities' stance since 2020, including regulatory tightening and zero-COVID lockdowns, appear to have inflicted long-lasting damage to China's private economy, the dynamism of which was a defining feature of its economic miracle in the past four decades. Nearly 20 months into China's COVID reopening, the private sector has yet to bounce back, despite many pro-private business utterances and gestures from China's leadership.
i'm not sure private businesses failing over covid is a good thing for an economy
Again, you're thinking from a perspective of a market economy which China is not.
i’m not sure private businesses failing over covid is a good thing for an economy
I'm sure that saving countless millions of lives and preventing people from becoming sick and turning into a strain on the healthcare system is actually very good for the economy.
Again, you're thinking from a perspective of a market economy which China is not.
no, i'm thinking from the perspective of resources being finite, which they are
also, i don't think you know what a market economy is. china literally calls itself a market economy
I'm sure that saving countless millions of lives and preventing people from becoming sick and turning into a strain on the healthcare system is actually very good for the economy.
the meme of "countless millions of lives" aside, you making this argument means that you accept that china shifting more to state-capitalism than regular capitalism isn't intentional, so i'm not sure what point you're trying to make
no, i’m thinking from the perspective of resources being finite, which they are
Resources being finite has fuck all to do with where manufacturing happens.
also, i don’t think you know what a market economy is. china literally calls itself a market economy
China is a state planned economy where markets act as an allocator. The state makes the decisions where the resources should be allocated however. That's the difference from actual market economies where allocation happens completely organically based on the whims of the investors.
In fact, what China actually calls itself is a birdcage economy where the market acts as a bird, free to fly within the confines of a cage representing the overall economic plan. https://informaconnect.com/a-birdcage-economy-understanding-china/
the meme of “countless millions of lives” aside, you making this argument means that you accept that china shifting more to state-capitalism than regular capitalism isn’t intentional, so i’m not sure what point you’re trying to make
It's always adorable when people use terms they have very shallow understanding of. There is a fundamental difference between regular capitalism and what you refer to as state capitalism. The purpose of labor under regular capitalism is to create capital for business owners. Capital accumulation is the driving mechanic of the system, hence the name. Meanwhile, the purpose of state owned enterprise is to provide social value such as building infrastructure, producing food and energy, providing healthcare, and so on.
The point I'm very obviously making is that the state has very different goals from private capital, and thus it allocates labor differently. If this is a point that you have trouble understanding then maybe you can spend a bit more time educating yourself on the subject instead of debating a subject you clearly have a very tenuous grasp of.
Resources being finite has fuck all to do with where manufacturing happens.
china invents capability to snap fingers and materialize manufacturing capability out of thin air
The state makes the decisions where the resources should be allocated however.
i'm not willing to have this debate with you over whether china is a market economy when i've literally provided you a source that quotes china calling itself a market economy
It's always adorable when people use terms they have very shallow understanding of.
you mean like when you said china wasn't a market economy, despite china saying they were a market economy? and then when you accused me of using terms i didn't understand then providing a description of those terms that showed i'd used them accurately? what point do you think you're making here?
The point I'm very obviously making is that the state has very different goals from private capital
you're trying to make that point by pointing to a shift away from private capital, which is a completely meaningless statistic because the shift away from private capital wasn't intentional so doesn't imply anything about an economic plan going forward
i literally spelled that out for you last time and you still chose to deliberately miss it
china invents capability to snap fingers and materialize manufacturing capability out of thin air
If by that you mean China spends decades building out manufacturing capacity and setting up supply chains then sure.
i’m not willing to have this debate with you over whether china is a market economy when i’ve literally provided you a source that quotes china calling itself a market economy
I've literally provided you with the source explaining the context of markets within the Chinese economy and explained why your understanding is superficial. Clearly you don't care about actually understanding the subject you're opining on.
you mean like when you said china wasn’t a market economy, despite china saying they were a market economy?
Literally explained to you why it's not, you didn't bother addressing any of that and just continued bleating about China being a market economy. Really showing the quality of your intellect here.
you’re trying to make that point by pointing to a shift away from private capital, which is a completely meaningless statistic because the shift away from private capital wasn’t intentional so doesn’t imply anything about an economic plan going forward
LMFAO
i literally spelled that out for you last time and you still chose to deliberately miss it
if you work on your reading comprehension a bit, then you'll see that I've addressed your nonsense already
If by that you mean China spends decades building out manufacturing capacity and setting up supply chains then sure.
i'm sitting here arguing that china has invested more than zero in setting up external manufacturing, then suddenly you forget what your point is, and emphasize just how much china has invested in setting up external manufacturing
you're so absolutely rabid to just disagree with anything i say, you're willing to render the chain of your argument completely incoherent to do it
yes, china spending decades building out supply chains for external manufacturing inherently means they're less invested in domestic industry, or they wouldn't spend decades to do it
I've literally provided you with the source explaining the context of markets within the Chinese economy and explained why your understanding is superficial.
you're arguing with china's interpretation of their own economy by providing a non-mutually exclusive definition
good job
then you'll see that I've addressed your nonsense already
again, combined with the "LMFAO" above this is completely incoherent
maybe work on addressing the argument i've spelled out to you multiple times rather than falling back on the tried and true "well your reading comprehension is bad" like we're 12 year olds arguing in the youtube comments section
if you're so sure you've addressed it, quote it, and i'll do the reading comprehension for you and explain to you why the thing you quoted isn't actually addressing anything
it occurs when it's economically more efficient to move industry out of your country than to keep it in
It is not, generally speaking, more economically efficient to deindustrialize your own country. The logic you are using is neoliberal with "efficiency" meaning, "maximize profit for the financial sector". This is an arrangement planned due to US-based economic crises and should not be projected onto China like some iron law. The US, as the global seat of capital, is uniquely harmful.
i'm not sure private businesses failing over covid is a good thing for an economy
The thing they wanted you to see were the statistics, not the guesswork and editorialization from that article.
It is not, generally speaking, more economically efficient to deindustrialize your own country
china is literally taking money that they could invest in domestic industry and investing it in industry overseas
i guess now you get to explain why they're doing that if some form of economic efficiency isn't the answer
The thing they wanted you to see were the statistics, not the guesswork and editorialization from that article.
"don't look at that bit of the source i just chose to show you" would be an astounding bit of mental gymnastics
china is literally taking money that they could invest in domestic industry and investing it in industry overseas
This does not address what I said. Foreign direct investment is not the same as deindustrializing your own country. There are also more subtle, or at least often ignored, financial aspects regarding balance of payments and derisking from the dollar and eventual attempts at decoupling.
i guess now you get to explain why they're doing that if some form of economic efficiency isn't the answer
What do you think economic efficiency is?
"don't look at that bit of the source i just chose to show you" would be an astounding bit of mental gymnastics
The expectation is that you engage critically so that you can match up the source with the part they are talking about. In this case, it is that the balance between public and private ownership has shifted towards public in recent years.
Instead of engaging with what parent was talking about, instead an editorializing quote was found and now we are talking about that and other poor attempts at wit.
Foreign direct investment is not the same as deindustrializing your own country
and as i said at the outset, "we're just investing elsewhere" is how us outsourcing started
"they're not doing it at the expense of hollowing out their domestic industry" is a completely baseless claim when following an equivalent timescale the same would have been true about the us
What do you think economic efficiency is?
ratio between resources expended to resources produced
The expectation is that you engage critically so that you can match up the source with the part they are talking about.
they were using the source to argue that china is intentionally moving away from private ownership. the source saying that the move is unintentional is absolutely materially relevant, and it's laughable that you'd accuse me of failing to engage critically when you missed that.
and as i said at the outset, "we're just investing elsewhere" is how us outsourcing started
You are confusing yourself. In this thread, the things we went back and forth on in this segment is your claims about sending industry overseas and economic efficiency.
As I said, deindustrializing your own country is not economically efficient. Try your hardest to stay germane.
"they're not doing it at the expense of hollowing out their domestic industry" is a completely baseless claim when following an equivalent timescale the same would have been true about the us
Everything you have said is baseless speculation that China's FDI is going to follow the exact same path as that of the US, which was backed by finance. But both the geopolitical and economic foundations are different, as I have explained. We have not discussed this with any depth because you are illogically talking in circles despite me having already addressed this silly vibes-based point.
ratio between resources expended to resources produced
A ratio? So you quantify it? Quick, what was China's economic efficiency for 2023! Presumably it's just a number that, if represented by a fraction, is less than 1. Every political economist would love to learn that the thing you just made up is actually a very important statistic.
they were using the source to argue that china is intentionally moving away from private ownership.
There is only one (1) sentence where they talk about this and they didn't say that. If I had to guess, you are projecting your reaction.
the source saying that the move is unintentional is absolutely materially relevant, and it's laughable that you'd accuse me of failing to engage critically when you missed that.
Yeah that's obviously the part I said was editorializing. You have confused yourself again. Maybe take a little break from trying to get some "owns" in? They're not landing like you think they are.
I disagree with your last point. A lot of companies should have sunk in covid and been consumed by more prepared ones. The governments didn’t want it to happen and they proved we actually live in a social net capitalist economy. This way if rich people accidentally lose we can remember socialism exists for them alone.
A lot of companies should have sunk in covid and been consumed by more prepared ones.
either way, mass company failure due to covid doesn't imply anything about the split of china's economy going forward
"it's just supplemental" would have initially worked to describe us industry shifting out
The difference being that China is not neoliberal. This does not coincide with deindustriakization, crushing unions, maximizing "free markets", etc. It also does not correspond to anything like the regimes the US used to make offshoring in its own interests, namely to force imbalanced export economies on other countries premised on unequal exchange and a dollar-heavy (im)balance of payments. Worst case scenario of success is that other countries, particularly in Africa, develop industry, infrastructure, and good jobs while China gains trading partners and stays heavily industrialized, as they care for their real economy.
investment is finite, so if you have the choice between a and b, investing more money in a is by definition investing in a at the expense of b
At the level of entire countries this logic can break down. For example, third world countries have to figure out what to do with all these dollars they receive from their imbalanced export economies. You can't just spend it on anything, yiur country needs to function and you can't buy everything from everyone at fair prices this way.
The difference being that China is not neoliberal
i'd respond to this paragraph but you really haven't made a coherent argument past "us bad china good"
At the level of entire countries this logic can break down.
no, because resources are always finite. the resource doesn't have to be "money".
i'd respond to this paragraph but you really haven't made a coherent argument past "us bad china good"
Please try your best to engage in good faith and not make things up. There's plenty for you to ask about or engage with if you have the interest.
no, because resources are always finite. the resource doesn't have to be "money".
The original topic was investment, which includes money and is relevant to the balanve of payments issue, particularly with African countries with th3 aforementioned imperialized economies. You cannot understand, for example, offshoring, without understanding unequal exchange, and this makes what might seem like a finite resource problem into one where you must think about coercion and graft and where production is directed.
Please try your best to engage in good faith and not make things up.
if you want, you can try restating the argument you were trying to make before you slipped and typed out a ramble about how the us is bad
The original topic was investment
money isn't the only thing you invest when you set up a manufacturing base
if you want, you can try restating the argument you were trying to make before you slipped and typed out a ramble about how the us is bad
Slipped up? I directly responded to the comparison to US offshoring that you made to explain why this is different. I guess you have no answer.
Please do your best to act in good faith. It's okay for you to say, "that's a good point, I will think about it" or not reply at all. It is not okay for you to make things up.
money isn't the only thing you invest when you set up a manufacturing base
If you took ten seconds to think about it, having any financial component makes my point correct and yours incorrect. Your zero sum game logic simply does not apply on multiple levels, as I have explained.
This might be clearer to you if you actually dealt with what I said instead of cherry picking.
I directly responded to the comparison to US offshoring that you made to explain why this is different.
and your argument boiled down "us bad china good"
If you took ten seconds to think about it, having any financial component makes my point correct and yours incorrect.
genuinely, what are you talking about?
and you're coming at me to say that if money changes hands then that's not the case?
and your argument boiled down "us bad china good"
It doesn't, but you seem enamored with pretending this. If you actually responded to what I said rather than deflecting you might learn something. Or at least not repeat openly dishonest claims.
genuinely, what are you talking about?
The next sentence added all the context you should need. Zero sum logic doesn't apply here and part of the reason is the financial component. You'd be less confused if you engaged directly instead of dithering and avoiding what I say.
you can't invest in factories abroad without by definition investing less in factories at home because resources are finite
You keep repeating yourself rather than look at what I've already said. You would be less confused if you stopped avoiding my points about finance and neoliberal approaches and foreign direct investment and dollar recycling.
us outsourcing started with "it's just supplemental" too
I've already addressed this many times.
so you can't use that as a bulwark against any notion of further outsourcing
I don't even consider all FDI to be outsourcing, including this. This is because of the actual financial and geopolitical productive underpinnings of China's strategy. This is all part of BRI.
You are confused because you are just arguing with yourself rather than try and understand others.
If you actually responded to what I said rather than deflecting you might learn something.
restate your point if you fluffed it up the first time, but no, what you provided initially was devoid of anything worth responding to
You keep repeating yourself rather than look at what I've already said.
because what you've said is nonsense that doesn't address anything i'm saying
let's keep this real simple: do you agree or not with the fact that spending resources to set up a factory in location A means you, right now, have fewer resources to spend setting up a factory in location B?
if no, where do the additional resources come from in the here and now? and, more importantly, why has china not already constructed an infinite number of factories?
Why do you assume the West? China often expands to other Asian countries. Or pretend to. E.g. after tariffs are applied to China you'll often see a huge increase in intra Asia trade. Followed by different Asian countries heavily increasing their exports. Usually by hiding the true origin (tariffs are applied to the origin, not some transhipment place).
Also a lot of infrastructure in Africa is being funded in China, their position there is only going to grow stronger.
This is what happens with production revolutions. We did the same thing, as did England.
