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China’s plan to get around Western tariffs: Fill the world with factories
(english.elpais.com)
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this post was submitted on 06 Oct 2024
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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
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.
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.
i'd respond to this paragraph but you really haven't made a coherent argument past "us bad china good"
no, because resources are always finite. the resource doesn't have to be "money".
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.
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.
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
money isn't the only thing you invest when you set up a manufacturing base
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.
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.
and your argument boiled down "us bad china good"
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?
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.
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 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.
I've already addressed this many times.
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.
restate your point if you fluffed it up the first time, but no, what you provided initially was devoid of anything worth responding to
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?
Go back and re-familiarize yourself with what I've said. Make a real effort instead of relying on deflecting crutches. I'm not going to feed into your poor behavior.
By your logic I don't need to, as I didn't "fluff" anything up.
If you would like to continue this conversion, you will have to respond to it. In fact, I will ignore the rest of what you say until you do. Good luck.
i see you realized that building factories isn't free
congratulations
I await your reply to things I've actually said.
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
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 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.
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
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
Resources being finite has fuck all to do with where manufacturing happens.
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/
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.
china invents capability to snap fingers and materialize manufacturing capability out of thin air
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
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?
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
If by that you mean China spends decades building out manufacturing capacity and setting up supply chains then sure.
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.
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.
LMFAO
if you work on your reading comprehension a bit, then you'll see that I've addressed your nonsense already
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
you're arguing with china's interpretation of their own economy by providing a non-mutually exclusive definition
good job
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
The only one incoherent here is you bud because you're discussing a topic you don't understand. This is a perfect example of you being incoherent:
China is not developing external manufacturing at the cost of domestic manufacturing, nor is there anything inherent here. China is increasing capacity to supplement the domestic capacity. The fact that you can't even understand such basic things is frankly phenomenal.
Yeah, I'm arguing that Chinese understand how their economy works better than an ignorant internet troll.
That word you keep using doesn't mean what you seem to think it means.
This is not a long thread, go back and read it instead of making vapid replies here.
being less dependent on a thing automatically makes you less invested in a thing, but this is besides the point
if you spend decades of effort ramping up manufacturing in one location (away), then that's decades of effort you didn't spend ramping up manufacturing in another location (at home)
i literally cannot fathom how you're so furious to be wrong that you're still arguing contrary to that
well china say their economy is a market economy, and you say otherwise, so i guess this puts you firmly in the ignorant internet troll camp
your last three replies haven't even been making an argument. they've just been quibbling over some definitions you're wrong about, and shooting yourself in the foot by making my case for me.
what are you even doing here?
If I have two apples and I buy a third apple then I'm not less invested in the two apples I already had. Let me know if I need to explain this in simpler term for you.
Well China doesn't say that, and linked you an article explaining what China actually says. Feel free to keep ignoring that and regurgitating nonsense though.
you just gave me an example that proved my point
if you have two apples, you can afford to lose one of those apples less than if you had three apples. try again.
you also probably wouldn't spend a decade obtaining an orange if you were only interested in your two apples forever and ever.
you also replied to the bit that i explicitly called out as not relevant, which is hilarious
"if you only have time to go to one shop, then going to the grape shop means you can't go to the apple shop"
did it get through to you? are you about to reply telling me that any shop that sells grapes would realistically also sell apples or something? that seems in line with the quality of debate you've been providing thus far.
literally linked you a source referencing china explaining their own economy
and again, the interpretation you linked to isn't mutually exclusive with "market economy"
Oh yes, you've further confirmed that you have no clue.
Having more apples doesn't make your existing apples less valuable. In terms of production, this translates into demand. As long as your demand is growing ALL your factories are just as valuable.
did it get through to you?
If you can't even understand what the article says then there's no point having further discussion.
It's not an economy where the market makes decisions where labor and resources are allocated. The government decides that and the market acts as an allocator within that context. If you can't understand how that's different from a market economy then you have no business having this discussion because you don't understand what you're talking about.
having a surplus of apples means you value an individual apple less, yes
that's how the concept of "having things" works
so if 20% of your factories are now somewhere else, whereas before it was 0%, then the share of value taken up by domestic factories has decreased, as has the share of demand they're managing to satisfy by domestic factories
if china completely stops building new factories at home, and in 30 years 90% of their factories are abroad, and 10% are at home, would you say their industrial base had been "hollowed out", even though the absolute number of factories at home is the same?
i pointed out that there was no point discussing this further when you said that china was wrong about their own economy, but for some reason you insisted on it
this is like saying "the government doesn't decide that; steve from the finance department decides that", or "the market doesn't decide that; a distributed network of private investors decides that"
if the government bases their decisions off the market, then the market is the one making those decisions, just like steve is making his decisions based on what he's been told to do from the government, and just like investors are making their decisions based on what they think the market is telling them to do
you can quibble about how the same market effects will produce different results, but the result is still a market economy
i'm genuinely so excited for your next fruit analogy that accidentally explains why you're wrong
Nope, that's not how any of this works. If you have constant demand for the good, you value all the factories producing the good equally. The fact that you can't get this through your head is frankly incredible.
Anyways, it's pretty clear that having a rational discussion with you is not possible since all you do is just regurgitate the same nonsense over and over. I'll let you have the last word that you evidently crave. Have a good one bud.
my guy i already had the last word of consequence like 5 posts back when you stopped actually responding to things i was saying in a coherent way and started arguing with china
since then it's all been for the love of the game
quite literally, you're now arguing with your own hypothetical
"As long as your demand is growing" -> not constant demand
but it doesn't matter because i foresaw your difficulty with this one, and addressed both the case of constant demand and growing demand
maybe check your post history i think the call might be coming from inside the house on this one
you are comically bad at backing up a worldview you evidently hold so strongly, and it's utterly fascinating to me
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.
The thing they wanted you to see were the statistics, not the guesswork and editorialization from that article.
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
"don't look at that bit of the source i just chose to show you" would be an astounding bit of mental gymnastics
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.
What do you think economic efficiency is?
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.
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
ratio between resources expended to resources produced
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.
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.
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.
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.
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.
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.
either way, mass company failure due to covid doesn't imply anything about the split of china's economy going forward
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.