The article alludes to, but doesn't expand on, the US's lost lead in furniture manufacturing. For more on this fascinating story, I recommend Beth Macy's "Factory Man" [0], the story of the systematic destruction of the North Carolina and Virginia-based wooden furniture industry by Chinese imports.
It's the exact same playbook as Huawei -- govt-backed "dumping" of loss-priced goods in an attempt for total market dominance. And US companies have historically been way too willing to expose trade secrets to Chinese manufacturers in exchange for temporarily cheaper supplies -- a Faustian bargain.
In the case of furniture and other lower tech industries (clothing & textiles too), when Chinese products got slapped with tariffs production shifted to a different off-shore countries (Vietnam, Bangladesh, etc). The structural disadvantages that American manufacturing has doesn't go away, and honestly how many trade secrets are there to producing furniture. It's not like they don't have furniture already in the rest of the world.
"Factory Man" actually addresses these questions in considerable detail. You might be surprised how difficult it is to produce good-looking finishes, veneers, etc -- especially at scale. There was a time when the American manufacturers thought their competition would never catch up (and then they explicitly trained their competition so they could outsource production, which backfired when retailers realized they could cut out the middleman and order directly from China/Vietnam/wherever the cheap labor currently is.)
American furniture manufacturing does have one significant advantage in the US compared to its offshore competitors: proximity. Furniture is bulky to store and time-consuming to ship. The one manufacturer who realized this, John Basset, is the titular "Factory Man" who has kept his factories running by doubling down on just-in-time delivery, etc.
Bassett Furniture is made in the US? I'm surprised the quality isn't better, the furniture I bought from them was (mostly) broken down & uncomfortable after a few months, and ultimately ended up being replaced within 3 years. What I replaced it with has lasted more than double the life of my former Basset furniture already.
Bassett Furniture was made in the US (some of it in the company town of Bassett, Virginia -- not far from where I live) for many years, but today my understanding is that much of it is manufactured offshore. John D. Bassett III comes from that family, and worked for Bassett Furniture for many years, but today he runs a separate company called Vaughan-Bassett that makes 100% of its furniture in the USA. [0]
The Bassett family history and corporate provenance is weird and a bit incestuous (both figuratively and literally; J.D. married a cousin), and I really do recommend reading Macy's book for the full scoop.
If the Chinese sold furniture at a loss for market dominance, after the said dominance is gained, did the price soar?
The Chinese made cheaper furniture due to a lot of reasons, cheap labor, cheap resources, and presumably lower quality may be some of them, but selling at a loss definitely is not.
"The U.S. still makes — or at least, designs — the best computer chips in the world. China assembles lots of electronics, but without those crucial inputs of U.S. technology, products made by companies such as Huawei would be of much lower-quality."
The accusations against Huawei are coming at a time where this is simply not true anymore. Huawei are making their own chips under the HiSilicon brand. Just like Qualcomm chips, their CPU part is based on ARM IP, and ARM are based in the UK and owned by SoftBank. The current Kirin 980 is the fastest non-Apple SoC available on the market and as power efficient as the A12.
The Kirin 980 SoC uses the Cortex-A76 which was designed in Austin, TX, United States of America.
The statement "The U.S. still makes — or at least, designs — the best computer chips in the world" is accurate in the context of a manufacturer attempting to build a high-performance microprocessor-based device.
Exactly, thus far China doesn't have the technology to do sub-14nm foundry work at any notable scale, and as we saw with Dhyana, they apparently don't have the internal talent to improve AMD's Zen cores. The foundry issue isn't apt to change anytime soon, as newer nodes are extremely expensive and take years to bring up (see Global Foundries & Intel's troubles with newer processes).
So, you think all phones and wireless base stations and telecom equipment ever need is just some mobile phone SoC?
This narative is so so similar to Chinese netizens'，I couldn't help but cringe when I saw so uninformed and forced arguments, this myth has to stop.
The US still monopolizes most telecom related chips and components, Huawei does make a few other chips along with some Chinese companies, but they are generally low-end in performance, couldn't compete at high-end market.
And let's be realistic, free of those marketing frills, Huawei's chips are impressive but still modified ARM products, and they buy a lot other licensed IPs for their chips.
Ditto for Allwinner and other Chinese ARM licensees. They buy the majority of IP blocks from ARM and perhaps a HDMI PHY & WiFi chip from some small company (also not Chinese) cause its cheaper, send the mostly vanilla design to TSMC, and when it doesn't work immediately run back to ARM asking them to fix it (which they do).
Apple & Qualcomm comparatively tweak or redesign most of the IP they license from ARM, which is what gives them such a significant performance advantage over the 300 other ARM licensees.
Another example of this is AMD's recent JV in China, essentially passing a holding company the IP to build an original Zen core. While this is sketchy AF, I think we can expect brutal embargoes if China attempts to sell these chips outside their domestic market, and despite having a year and a half to improve Zen, it appears Dhyana is nearly identical to Zen.
Meanwhile Zen 2 has already started sampling in useful quantities on a newer process node that Chinese foundries likely won't replicate anytime soon, seeing as Global Foundries gave up, Intel is running years behind and massively over budget, with TSMC having the only working sub-14nm process. Even if AMD licenses this architecture, it will take years (even with process theft from TSMC) to make those chips on 7nm in China.
Excellent post but once China subsumes Taiwan - and that day is coming - they'll have TSMC's technology and that much more electronics production monopolistic leverage.
China won't be subsuming Taiwan anytime soon. If China did subsume Taiwan, TSMC would lose some of their process engineers, and this is apt to have disastrous consequences for their sub-14nm nodes as they are so finicky to get & keep working reliably.
The population replacement in Hongkong that's at its another height, will inevitably occur in Taiwan if that starts to be a remote reality, albeit at an even larger scale.
China doesn't have exclusive control of the borders with Taiwan, for population replacement (or just flooding Taiwan with loyal Chinese citizens to alter the demographics) it would require the Taiwanese government to look the other way, or encourage it. Neither is likely to happen, as their government isn't asleep at the helm.
I feel the need to suggest the USA is not making chips. It are corporations doing it. The technology is, as if high priests guarding the sacret knowledge, kept secret. From the perspective of human progress it's a sad afair.
Without citing Huawei specifically, consider some government backed company with tons of cash no practically no IP.
I bet we could go from you and me in a garage, to a pretty high performance ARM compatible SOC in not that many years.
How? First think of how far you can get just by buying everything ARM has to offer including licensing all IP options and technical consulting service options. Instant prettty decent reference implementation.
In parallel we’ve hired 1,000 engineers and scientists to start working on improvements and novel ideas, let by a team on the the best architects on the planet we can woo away by offering each 7 or 8 figure contracts, unlimited first class air travel for family and friends, whatever is necessary based on strategic value.
Competently managed that would provide high probability of a pretty fast ARM chip.
The problem? You can’t win and sustain competitive advantage with just that. It’s performance balanced with so many other factors including power, effificency, overall effecrivenesss of your SOC for given applications etc.
Besides the enormous challenge of all things adding up at once to win, there’s also no guarantee we’d end up with any especially huge amount of novell IP, not just stuff licensed from someone else, that would allow this win advantage to be comfortably sustained for any susbstantial period of time.
They have a lot of smart people doing some interesting stuff, but that particular example I wouldn’t consider very threatening, even if other examples do exist the better make the point.
Reading Michael Pillsbury will help you understand actions by the US admin against China. His book, the hundred year marathon, states the theory it subscribes to according to Bloomberg and Politico (I dont know how true the theory is and some China experts disagree with the book)
"But what if the “China Dream” is to replace us, just as America replaced the British Empire, without firing a shot?
Based on interviews with Chinese defectors and newly declassified, previously undisclosed national security documents, The Hundred-Year Marathon reveals China’s secret strategy to supplant the United States as the world’s dominant power, and to do so by 2049, the one-hundredth anniversary of the founding of the People’s Republic. Michael Pillsbury, a fluent Mandarin speaker who has served in senior national security positions in the U.S. government since the days of Richard Nixon and Henry Kissinger, draws on his decades of contact with the “hawks” in China’s military and intelligence agencies and translates their documents, speeches, and books to show how the teachings of traditional Chinese statecraft underpin their actions. "
For the past decade, China’s strategy for internationalizing the renminbi has involved greater reliance on the IMF’s Special Drawing Rights as an alternative international reserve currency. But the launch of renminbi-denominated oil trading this year suggests that China will now pursue de-dollarization head-on."
A Chinese national was talking about this 100 year plan to me just the other day. It's certainly no secret or just a theory. The Chinese Dream is all about "the great rejuvenation of the Chinese nation". This isn't explicitly about overtaking the US, it's more about China taking what it considers to be its rightful place in the world - and that certainly isn't second place. In my view, it's only rational that this would be their goal.
China is definitely no friend of the US, nor an enemy (at this point), but definitely a genuine competitor. If the US does not recognize this and act accordingly, China will indeed replace it as the world superpower. If you're Chinese, this would be great news, if you're American it would be concerning. It's always going to be bad news for one of the parties due to the conflicting ideologies.
> When China becomes uber powerful, will the state then stop controlling everyone's thoughts?
> Will they have basic rights then?
> Or will corruption go away?
> Will people still be looking to flee China when it's #1?
If you assume that the future will be basically like the past (untrue, but better than most assumptions), then the answers are:
1. It doesn't now, it can't now, and it won't be able to then. But it definitely won't stop trying.
2. Yes, in much the same way they have basic rights now. Which is to say, they will enjoy what their culture thinks of as basic rights, but probably not what you think of as basic rights.
3. No.
4. Yes, just as people have sought to flee every country in the past or present.
As our world gets more and more hyperconnected whatever delusions groups of people have of their favorite story being accepted as global narrative get tested very fast.
And break down faster if there is no universal appeal. There are enough examples playing out around the world.
All these nationalistic stories will keep breaking down.
There are 5 billion more people in the world than the Americans and Chinese put together. They aren't going to blindly bend over to either an American or Chinese narrative.
We like to live in this dream state that the most powerful countries matter. They dont. Ask the Taliban.
The Indians and Russians and Europeans and South Americans and Africans don't give one shit about Make America great again or Make China great again.
What will play out is a collapse of these narratives in spectacular fashion.
"We like to live in this dream state that the most powerful countries matter. They dont. Ask the Taliban."
You mean ask a bunch of people living in the stone age, who are getting killed en masse what they think of their power relative to others?
I think you picked maybe the worst possible example: just because a group can live on rice in inhostile territory doesn't mean that the power ratio is negated.
If the Americans wanted to actually destroy the Taliban it wouldn't be that hard, it would just come at a cost nobody wants to pay.
A rising tide raises all boats. All things being equal its better for a Chinese to be in a strong China than a second tier one. Plus, the average Chinese doesn't necessarily share the concerns of western observers, they have had a different culture and values of their own for millennia, and a state that wasn't entirely different than their current.
Besides, anybody can ask the same. If the US keeps its power or gains even more, will the cops stop killing black citizens? Will the big corps stop have politicians in their pockets? Will Wall Street lackeys get out of power? Will mass surveillance stop? Will wars for oil and "national interests" stop? Will the middle and working class stop declining? Will healthcare be affordable?
"Plus, the average Chinese doesn't necessarily share the concerns of western observers, they have had a different culture and values of their own for millennia, and a state that wasn't entirely different than their current."
I call rubbish.
Corruption is corruption and nobody ever accepts it as 'part of our historical culture'.
Having a corrupt government official take your home because they want to build a mall is pretty much Universally bad.
Being thrown in a concentration camp because of your religion not something anyone wants.
Having to bribe officials to get where you want is not something anyone wants.
Being told how many children you can and cannot have is not something anyone would rather live with.
I accept that people will accept differing levels of surveillance etc. - but in the end there are universal issues here.
>Corruption is corruption and nobody ever accepts it as 'part of our historical culture'
You'd be surprised. Some cultures don't like rigid "law and order" on everyday life, and prefer bendable laws in some cases (even if are OK with stricter laws in others). It has a lot to do with historical development and custom law, rather than some sterile "law trumps everything" being everybody's utopia.
>Having a corrupt government official take your home because they want to build a mall is pretty much Universally bad.
Sure, but having a strong government and not blow up a 1.6 billion country into competing factions and civil war chaos is pretty much universally badder.
Most of the "bleeding hearts" (for the countries of others), assume once you break down the "corrupt government" a functional democracy will follow.
The never bother wondering whether a functional democracy is even possible at that scale, nor to ponder the other places they've turned into hell-holes with their interventions.
Nor do they care much about sovereignty, the idea that people should fix those things for themselves, and not have some third parties (with their own ideas, culture, and interests) impose a solution.
>Being told how many children you can and cannot have is not something anyone would rather live with.
At the individual level maybe. But having too much population grown in your country is not something "anyone would rather live with" either.
And America and China really do want to both be the lone superpower. (I'm just not convinced of this premise by the way, but let's assume it's true)...
Then the rational thing for you to do is look back on the past, what? 70 or so years and ask yourself has it been good for you or bad for you? That should give you a pretty good idea of which nation you'd be best off with as the super-power.
Then kick back, grab some popcorn, and hope that your guy wins.
Generally going to face a similar fate as Americans. With exception of a few sanctioned countries everyone can participate economically and legally in the US subject to the same laws.
>China will indeed replace it as the world superpower...
Again, why would this be an issue? I mean, for us here in the USA? Why would we not want to be rid of the "privilege" of being the "super" power in what is clearly a multi-polar world?
The US position as the top superpower is what allows it to print its way out of recessions without being crushed by inflation, since all those extra dollars get stashed away in foreign reserves. If the dollar loses that status, the chicken that is the federal debt will finally come home to roost. At least that's my understanding. If the US loses its edge, inflation will go up as growth slows, resulting in something like Japan's lost decade. Not to mention the preferential treatment it gets by having the biggest stick.
First, the vast majority of our debt is owed to ourselves, not to foreigners.
Second, what makes our dollars so valuable, is not our status as a super-power, but our willingness to pay it back. Think of it this way, the big ticket items in the US government budget are the military, Medicare/SS, and debt service. Now we hear all the time talk about cuts to the military or medicare/ss. But no one even CONSIDERS talk about cutting debt service. THAT is what makes dollars so valuable. (It's also why the vast majority of them are eaten up by us and not foreigners.)
So I'm not convinced at all that our dollars are valuable because we are a super-power. Russia was a super-power, and no one was stockpiling rubles. Likewise, Switzerland is not a super-power, but everyone should have some swiss francs.
Yes, but what makes it possible to service such debt at such scale is that US can strongarm the whole world into submission. It is not the only thing that matters (relevant to the USSR example) but it is the major one.
Correlated to that US would also lose its huge influence in financial institutions world wide. Right now US influnce is preventing World Bank funds from being used to pay for One Belt projects. Few countries want to pay off loans for One belt project using Western loans. If China had been sole superpower, it would have bulldozed even more on projects similar to One Belt project than it is currently doing now.
This is true, but the interesting thing is that USA is quite favourable to Bitcoin, which I believe will be the next reserve currency. For now it looks like Chinese government is missing out on the most important technical innovation.
Because when you lose power, you are exposed to a greater number of risks that are beyond your control. This risk is magnified when the new superpower is different to you politically, culturally, and ideologically.
China would need to come clean with a few of the skeletons behind its firewall before I would feel comfortable with them wielding that much power.
I'm not saying that America is innocent (by any means), just that I would rather them hand the torch to a country that's more honest to their own people and operates more openly.
Wow people other than Americans want to succeed and compete. This is devastating news /s
Perhaps Americans should stop blaming others and look inwards. Break up all the corporate monopolies and duopolies to trigger innovation again. Build functional affordable sustainable cities. Switch to renewable power as soon as possible. Welcome the brightest and most motivated people instead of banning them from the country. Invest your trillions of borrowed money into infrastructure and the health of your population instead of killing civilians abroad for no reason. Do all these things and more and America will succeed and people will always want the USD. Be humble and competitive rather than arrogant and convinced of your own exceptionalism on the basis of mere existence.
But nah, rather sit in front of the TV and yell about China.
I find the intensity of the anti China sentiment in this forum to be quite puzzling to be honest.
> Do all these things and more and America will succeed and people will always want the USD.
From my limited understanding of the issue (emphasis on "limited"), it seems that Most countries in the world don't want the USD to be their currency of reference but are forced to out of fear of being invaded.
I may be wrong but from the oustide looking in it seems to me that a lot of people in the US live in denial and don't necessarily want to come to terms with the fact that the show is almost over.
They can have whatever plans they want, it doesn't mean they have a remote chance of success.
The natural resource of the information age is not iron or oil, but a populace of free thinkers who are unafraid to fail while working outside of cultural norms. Why does the US dominate the Internet? It's not because our 1s and 0s are better quality, or our technology education is superior or even that we have better funding for tech (it costs almost nothing to create a web site except time, desire and expertise.) It's our culture: we value the pioneer spirit. New frontiers are dove into head first.
China's recent successes can be attributed to intellectual theft from innovative cultures, and brutal oppression of their own people. This does not scale. Until they free the minds of their populace, they will never be able to globally complete in science and technology.
The US does have a great innovation-oriented culture but much of it stems from continual immigration of brilliant people from all over the world as well as being the largest single market with largely uniform culture and language, which greatly helps with the scaling of large enterprises.
China's domestic market is coming close to the US size and arguably larger in PPP terms which matters more than in dollars since the costs for R&D are often dominated by domestic salary. Anyone knowledgeable about Chinese domestic market will attest to its vitality and bustling competitive spirits, not to mention intense work ethics that results in rapid experimentation and iteration.
The US continues to lead in breakthroughs but rollouts of innovation happen faster in the Chinese market. With more funding and resources, China also starts to lead in fields they focus on including quantum communications, some areas in AI, and a few other engineering fields.
What is clearly lacking for the US is solid education in mathematics. This deficiency leaves the majority of population behind most peers in the developed world. The gap behind East Asian nations including China is especially acute as shown by the PISA result.
The gap in math between US and participating Chinese provinces (200+ million population) in PISA 2015 is about 0.6 SD, or roughly comparable to students with 2.7 vs 3.3 GPA.
The US needs to expend more effort to attract the best people in the world while pushing ahead with education reforms. The latter takes over a decade to bear fruits, however, so attracting and retaining global innovators should be a key current priority.
> The US needs to expend more effort to attract the best people in the world
US did that for the last 50 years, and it did not work out as much as it was imagined it would.
You do not only need a world class academicians, but their second-in-command people, regular full time researchers, junior assistants for them, and qualified blue collar workers to help run universities they will be working in.
People have been saying China haven't a hope in succeeding since the 80s yet here we are. Smashing everyone out of the water with ease. Doing the unthinkable as a matter of fact. They play to win and they're good at it.
The thing is back in the 80's, China was starting from a low point. It's easy to catch up which is what they've done but like the original poster said, it's much tougher to take the lead position. I agree with him that the Chinese culture makes it harder to innovate.
While I can see the logic in the argument I think it doesn't reflect in reality. For example they are miles ahead in stem cell research because they pursue technological advancement with much less concern about morals and regulation at the research phase.
Are they miles ahead? My impression of Chinese biology isn't that it's super advanced - I mean, it's another subject, but consider the recent headlines about the CRISPR baby. Ask any biologist about that experiment, and they'll tell you it's not only the ethics that are seriously bizarre, but just the idea that you should use something like CRISPR on a baby at this stage in the technology's development. It's mad science, but it's not likely good science.
Yes, it's that attitude that's the problem. Not all problems can be solved with tanks. And they are getting worse, not better, no matter what their propaganda shills claim.
> China's recent successes can be attributed to intellectual theft from innovative cultures, and brutal oppression of their own people. This does not scale.
It scales pretty well. Reason? Facts. Anyone saying China can't innovate is self-denial.
Theft doesn't scale. Like a parasite that kills its own host, after you drive your victim out of business, who will you steal from then?
Using fear and brutal dominance causes people to take less risks and focus on appearing to succeed instead of committing to the unpopular, long-term effort and delayed results that innovation requires. China's appearance of recent success is exactly that - an appearance. A thin facade created by a PR campaign. We all know from being ripped off on Amazon the real quality of Chinese products. It's exactly what one would expect from a country of prisoners.
If China is such a great power, why not compete on a even field? Get rid of the mail subsidies and use a fair currency exchange rate. You won't, because you know your backwater has no hope of competing with civilized nations. Arrogance and corruption are not a replacement for responsible and effective.
Yeah, this kind of blind racism and ignorance of what's actually happening in China is always a bit shocking. A lot of people are going to look back on the US from 2001 to 2030 and ask themselves how people be so totally blind and stupid. It's going to be one of those monumental historical blunders that will never really be lived down.
If you really think it's Americans with the pioneer spirit these days you should spend a month driving around the US observing people then do the same for the cities in China.
>what if the “China Dream” is to replace us, just as America replaced the British Empire, without firing a shot?...
Devil's Advocate I know, but what would be so bad about this?
Our position, considering the world is now multi-polar, is really more of a predicament than a privilege. Why would we fight them replacing us? (Or rather, I suppose game theoretically it would be best to make a show of fighting it, and pretend to regret losing it. A la Huck Finn and whitewashing fences.)
I mean, my concern is that they don't WANT to replace us. Which, to my mind, is worse for us.
I was also wondering, what is so bad about being the consumer nation, when our currency is in great demand around the world? In some weird way, the US has made the dollar itself a sought-after commodity, that is super easy to generate and sell to the rest of the world. An amazing deal, really.
>I was also wondering, what is so bad about being the consumer nation, when our currency is in great demand around the world?
The reason the dollar is in great demand is that it's backed up by American political and financial clout and force projection capabilities. If that ceases to be the case then demand for US currency collapses.
That's the present. What about the future? The USD can't be the world's reserve currency forever. What happen's when demand for oil is 50% of what it is now? What happens if oil starts to be traded in terms of some other currencies? What happens if the numerous countries whose currencies are pegged to the dollar decide to peg them to the yuan instead?
That can be said about any export. What if other countries don’t want it anymore? Well then you have to diversify. Looj at Russia or Venezuela and how oil prices affected them. That’s their “dollars”.
But if the USA is able to keep doing machinations around the world so that the dollar is demand for 200 years, eg by just making it the most stable currency, then their dollars and treasuries will literally be the thing that they trade for everything else. Like what if a bank goes insolvent... ok but what if it doesn’t, then everyone wants to use its money and credit.
The USA also lobbies for strong IP protections and international treaties because that’s another one of its exports.
Manufacturing and raw materials are actually less likely to remain a comparative advtantage than this artificially enforced stuff.
The problem is, as a debtor nation our currency is only good as long as we can make our debt payments. If we don't actually produce much of value, that won't be for much longer. We (the U.S.) are currently running an experiment to see how much we can run up our debt while simultaneously becoming more dependent on the rest of the world for just about everything and wondering what's the worst that could possibly happen? Sadly, this experiment has already been run repeatedly throughout history and it doesn't end well.
> If we don't actually produce much of value, that won't be for much longer.
But, we do produce a lot of value; we may be more specialized in intangible goods and services, but as long as those are marketable, we're fine.
> Sadly, this experiment has already been run repeatedly throughout history and it doesn't end well.
Leaving aside disagreement over whether the US is even in he scenario you propose, when has it ever ended badly for a country whose debt was denominated in its own fiat currency, rather than a commodity currency or foreign fiat?
That's why I'm trying to figure out why would even fight China trying to replace us? Surely the bigger issue would be if they only wished to sit back and make money for China without helping anyone else do anything?
It’s a bit like men being upset that feminism has led to women doing more work building careers and earning more money. Male lions sit around and have intercourse while the lionesses hunt. Maybe that is the future for humans too?
I don’t actually believe this, I think both sexes should scale down their devotion to the corporate world and focus instead on their families and other pursuits with a UBI. Robots will pick up the slack eventually.
I know it's off topic, but I agree with this as well.
Robots really are the only viable way forward. The idea that we can keep increasing production, but somehow force companies to continue to hire all kinds of employees at wages that support middle class lifestyles is fanciful in the extreme. I'm not sure why politicians keep putting that idea forward as viable? It's directly contradictory to the fundamentals of economics.
What's so bad for us? You could argue that. If we stopped trying to run the world, it would be a lot less expensive (in terms of both money and lives). That might not be so bad.
What's so bad for the world? Depends on how China tries to run it. But looking at the Uighurs, I'm kind of concerned that they won't run the world all that well for the rest of the world...
China's ambition is to "rejuvenate the nation" to its past glory.
What kind of glory? Who knows. Certainly it's not about simply replacing the USA. China has no wish policing the world. (Maybe dicking around but certainly not busy installing democracy everywhere)
The reason China appears to acting against US is because it looks like the biggest abstacle for China's development is the island chains and the technological gap. Chinese are somehow extremely affirmative of their belief and power structure.
Very likely China will view the US' "world police" strategy the same way the US viewed the later period British Empire.
They'll dabble, because of the perceived prestige but probably not really put weight behind it. They'll find something that works (maybe this new silk road) and then rinse-repeat until it doesn't. In time, china will have their own disfunctional, sprawling global dominance machinery..
If that's the case (which clearly it is), then limiting immigration is a bad move. Historically, the most powerful nations have been those with a free-wheeling economy and open/liberal attitudes. The U.S. needs to continue to attract the world's bright, ambitious, and hard-working people.
Now, I don't think the U.S. can afford to provide much of a safety net, in regards to basic income and healthcare if it's going to have open borders and a great deal of economic freedom. It will be expensive enough just to deal with the enviornmental problems of a dynamic economy.
>Based on interviews with Chinese defectors and newly declassified, previously undisclosed national security documents, The Hundred-Year Marathon reveals China’s secret strategy to supplant the United States as the world’s dominant power, and to do so by 2049, the one-hundredth anniversary of the founding of the People’s Republic.
Why would it have to be a "secret strategy"? Of course they'd like to replace the US as the world's dominant power...
Here is my confusion: if the war against China is really about high tech dominance, and Huawei is a particular target because it just surpassed Apple for #2 spot, then why isn't action taken against Samsung instead which is at the #1 spot?
Samsung is not a Chinese company, so this seems to be about national competition and not tech "dominance".
Samsung is the result of US's stripping of Japan's manufacturing power. Japan used to challenge US's hi-tech status in the 70s and 80s. US forced Japan signing the "Plaza Accord" and immediately Japan entered the "lost decade", and so the chip manufacturing power was strategically moved to Taiwan and S.Korea.
One thing I don't understand is how US, Japan and S.Korea led high-tech outsourced manufacturing efforts in China. As far as I understand everything is hunky dory starting with _Good will_ from Deng, until China became world's manufacuting hub. Only then it became a huge issue. My question is didn't any one consider China's current rise in late 80's and early 90's when they started outsourcing manufacturing?
I think the idea was to let china do the dirty work of manufacturing and staying at that. That didn't work as we we can now see. And I'm blaming the west's confidence of conveniently outsourcing the production to China thinking they'll always be in control.
The "Plaza Accord" was an agreement between the US, France, Germany, Japan, the United Kingdom to depreciate the USD in 1985. USD deprecation was halted by the "Louvre Accord" in 1987
I like how we're supposed to have a relatively free market in the west, yet the hands of large companies are always tied by the government, because any company, if large enough, is "a national security concern".
It is a money laundering case. HSBC tipped off the US gov't to a transfer that was effectively made using a false identity, to a recipient that was on a sanctions list. The US has banking laws, just like China has. If Tim Cook goes to Bank of China on Nanjing Lu and lies to SAFE so that he can wire a lot of RMB out of China, then the Chinese authorities will apprehend him. It's not as mysterious as it is being made out to be. Maybe she will walk because she's a celebrity executive in China, and because her case has been spun to be all about competition between the US and China, but still: banking laws are banking laws, in the US, China, Hong Kong, Europe, you name it. If you don't want to be in danger of breaking them, don't use the banks in that country.
Because even if South Korea joined North Korea and even if they doubled or tripled their wealth, they would still be too small to impose a threat to the US dominance. Australia, Canada or even large European nations are not seen as threats either. But a unified EU is seen as a threat by Trump.
Maybe SamSung is playing fair? Usually the US is okay with others outdoing us, if they play fair, and historically even if they play a little dirty (Japan late 80s early 90s) but probably not okay of they play wholly unfair with gov't backing and support.
ZTE was close to breaking point while they were blocked from US components, until that sanction was lifted (after the big fine). According to the Bloomberg article there may be a similar deal for Huawei - pay a huge fine or get locked out.
What will obviously happen is that the Chinese will not, can not, accept that they're depending on US components when they could get locked out from them at any moment. They will therefore accelerate, by whatever means (research, hack, steal, invent, anything) their own ability to produce all the parts themselves.
In short, putting the squeeze on China will only hold back the tide for a moment, and then backfire.
How will putting the squeeze on China for market parity backfire?
The Chinese have the goal of dominating Western markets already.
They are pretty unlikely stop the state sponsored industrial espionage, the skirting of sanctions or to open up their own markets with or without import tariffs.
I find the term trade war misleading, its really just countries trying to protect their intellectual property from theft by China. Money made in the skewed trade deals is used to swop debt for equity in failing economies in Africa, South America and Asia. Further, buying of technology companies in developed economies is another way to duplicate the technology in China to achieve global dominance. Don't forget that China has a political objective, its not all trade and fair play
I often hear that China is a victim of a US trade war, in fact its often framed as Trumps trade war. China is a very aggressive protagonist and we should be wary of the politically correct narrative that is being used to mollify the west. So of course the US is political and it needs to stand up for its own society
“‘U.S. moves against Huawei and ZTE may be intended to force China to remain a cheap supplier instead of a threatening competitor.“‘
This is what I also first thought when hearing about the arrest. This is all about economic warfare. Long term, I think this will be bad for my country (USA) because this will induce China to continue a huge national program to develop home grown tech.
On the other hand China is already committed to undermining US market dominance anyway.
So maybe this just buys US industry a little more time.
Allowing a foreign competitor to grow to a dominant position by skirting sanctions or from profiting from state-sponsored industrial espionage is not good either.
Anyone know of big, marquee examples of "trade secrets & technologies" handed over to chinese affiliates. I hear reference to this all the time, but have a hard time "putting meat on it."
Any nice clean examples where a chinese company gets IP/secrets that a French company would not have got?
The US should ban export of all high tech related IP to China as a national security concern. The wholesale outsourcing of decades worth of our hard earned technological innovation is treasonous. China would never give us access to that kind of tech if it were developed in China.
Can you explain how it is a national security problem (I didn't understand that phrasing in the article either)? But you also might be forgetting that almost all hardware is manufactured in China (and thus they could easily reciprocate such actions).
The ease with which China can disrupt our supply chain (in the short term) is precisely the point. Their theft of millitary and comercial secrets is another.
China requires american companies selling or manufacturing in china to divulge secrets and implant chinese nationals (agents of the communist party) into said american companies so they can copy our technology and use state funds to begin competing chinese owned companies. This has hollowed out the American manufacturing base. Fewer qualified American engineers and workers means less military readiness, especially against threats China doesnt want us engaged with. Think Russia.
This process also means that their military will both have a larger industrial base to support it, and better technology to arm it.
The USA is not a tool for the Chinese to extract reasources and knowledge from. We worked hard to get where we are, and they are illegally piggybacking on us by stealing our intellectual property.
She created a subsidiary company in Hong Kong, bought products made in the US and sold them to Iran.
The investigation started long ago.
This may just be a case of bad timing.
Who knew that an exec of a US competitor just also happened to be corrupt?
It doesn't make sense in the context of the trade deal, the better reality is that it's actually just the US locking down on people breaking the sanctions.
Agreed, it's comforting to people to think that the universe has order and that everything has a simple explanation. But it does not. The unit of the U.S. government that started this investigation started it long ago.
This is why the seemingly schizophrenic behavior of the government confounds so many people. Various leaders in agencies in the executive branch can't possibly have alternate incentives to the Commander in Chief, therefore it must be a Deep State Conspiracy. The dramatic coincidence of three airplanes crashing into buildings couldn't have been extremely lucky terrorist cells, it had to have been Bush doing 9/11.
People like to consider the U.S. government as a monolith, but this is a poor model. It's more akin to a 1 million core computer, chugging away at parallel tasks, many of which generate race conditions.
It may seems strange to many observers, but the President of the United States has limited power to stop federal prosecutors from doing their job. Just look at the current situation with the attorneys general and the special investigator.
Based on available public information, the case happened about eight years ago, and Meng was not a top executive at Huawei. At that time there were many companies in China and elsewhere selling US products to Iran. Huawei allegedly sold about 1 million dollar goods for civilian use. The selective law enforcement in this case is rather curious:
Why would the US persecute this particular case so vigorously? Extradition is not very common for crimes of this level of severity.
Why would the US want to have someone physically arrested instead of to punish Huawei with fine and export ban, which are more common for companies violating sanctions?
Why would the US choose to arrest the daughter of Huawei's founder, instead of someone who is more directly involved in the Iran deal?
It is hard to believe this is a case of bad timing. There has been lots of infighting within the Trump administration. Most likely, the hawk fraction intentionally chose to arrest Meng at the time of Trump-Xi meeting in order to undermine a possible trade deal by embarrassing China. Think about what happens if China arrests Tim Cook because Apple didn't pay the right amount of tax in China eight years ago.
The case is directed at her specifically: "Meng is accused of committing fraud in 2013 by telling U.S. financial institutions that Huawei had no connection to Skycom, which was reportedly selling goods manufactured in the United States to Iran in violation of American sanctions on Tehran. Meng has contended Huawei sold Skycom in 2009." [1]
As far as selective enforcement - can you give any examples?
Also - even though you're probably right on some level, and I fully agree there's 'relevance' to the current situation in China, I would argue it's not acutely relevant.
A lot of law enforcement doesn't happen until there's some people getting bold about it. For example, the Hells Angels get away with a lot until there is real violence, or super hardcore drugs start appearing - then the cops focus their attention more on the situation. Organized crime knows this, which is why they choose to keep the equilibrium by staying quiet, generally.
Since America has general competitive concerns with China, it makes sense that a large international firm that is flagrantly violating US law would be targeted by a body in the justice system.
But it doesn't mean that Trump's hawkish team is behind this as a part of the negotiations.
In fact, I really don't think it's part of the negotiation, and I even bet that Trump et. al. were caught maybe off guard by it.
So yes, politicized, but more in general, not acutely.
Moreover, if there is law being broken it should be prosecuted, and to your point, hopefully more evenly.
FYI - sometimes these things are also done to 'send a signal'. Just like if a Hells Angel dude steps out of line and maybe does something violent, and the cops rush down on all members of that chapter, it's a 'signal' to HA leadership that if they step out of line, that's what's going to happen, i.e. part of keeping the equilibrium. Otherwise, if the HA chapter got away with something, others might try as well.
There are news reports suggesting that she was arrested for arranging bank transfers from banks in the US to Iran, using false identify for the sender of the funds. The further suggestion has been made that these transfers caused several US banks to be subjected to fines under the sanctions laws of the US. The timing makes it seems as though this is all about the trade war and Chinese technology, but it sounds to me as though it is a violation of US money laundering laws, and pertains to money transfers that originated on US soil. We will see, as details emerge.
"US sanctions against Iran are not approved by UN or the EU."
It doesn't matter.
She sold US made goods to Iran, and so she broke US law.
As though she assaulted a US official or something, it's not so much EU laws that matter.
Also - if your example of 'US selling stuff to Iran' is the 'Iran contra affair' then maybe you made my point, because this was a massive scandal, and it's 30 years ago. If that's the extent of it, then it's not bad.
Also - the sales to Iran were part of a government sanctioned geostrategic initiative, much like the sanctions in the first place. I don't consider that problematic: if the US is the one making sanctions, and the US wants to adapt those sanctions for geostrategic reasons that makes sense.
>Also - if your example of 'US selling stuff to Iran' is the 'Iran contra affair' then maybe you made my point, because this was a massive scandal, and it's 30 years ago. If that's the extent of it, then it's not bad.
That's just an example, the US has played both sides anywhere they could, and armed "bad guys" since forever...
As for the scandal, yeah, some scandal, Bush then became president (and then had his son become President), and Oliver North had his charges dismissed.
Everyone trashed Trump for the solar tariffs but I liked it for this reason. Sure, temporarily they get more expensive but what happens in 20+ years when the world is reliant on solar power and China has a complete monopoly because they played the long game and subsidized it until all competitors died out?
China is playing the long game, the west plays quarter to quarter because of the stock market
Not an expert, so please forgive overgeneralization.
The USA (and the West) has played the long game. Very successfully. We somehow avoided WWIII.
Nixon thru Obama, the USA engaged with China with the goal of normalization (with the West). This has been standard procedure. For whatever reason, this strategy hasn't worked. (Yet?) Further, some have concluded China is becoming less likely to normalize.
Every successfully developing country has bootstrapped itself thru some measure of theft, cheating, protectionism. Recognizing the power imbalance, some proponents of active engagement in the West have let it slide, for a period.
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I am unhappy with the stalled relationship between USA and China. While I do not support Trump's actions (tempting a trade war, weird rhetoric), I understand the impulse to do something. In truth, I do not know if there is any satisfactory path forward.
I grew up during the anti-Japanese hysteria of the Reagan years. I hated it then. I hate such rhetoric now.
Happily, it passed. I'd like cooler heads to prevail again. We'll see.
What you call normalization is submission to US values and power. No nation wants to do that. The difference is that China is powerful enough to go their own way.
As long as you call it normalization you will remain unhappy.
In what free market does a government subsidize a company and force competitors to give their native companies their IP to do business?
China never cared about free trade, they use it like a weapon to beat idealists like yourself over the head
What happens in 20 years when China has complete dominance of the solar market and those "cheap" solar panels get tripled in price because there is no competition left and the rest of the world can only grit their teeth?
> In what free market does a government subsidize a company
The idea that the Chinese government subsidizes every Chinese company is nonsense. This is just something that Americans need to believe because they don't want to admit how extraordinarily inefficient their domestic industries were before 2000.
> and force competitors to give their native companies their IP to do business?
This is hilarious. Nobody forces foreign companies to give away their IP. These companies, which are supposedly the best in the world, analyze the trade and make it voluntarily or walk away. It's called the free market. Remember that?
> What happens in 20 years when China has complete dominance of the solar market
The irony here is that all the tariffs do is put America further and further behind. The tariffs don't help America at all eg [1]. This should be obvious to anybody who understands how solar works and knows that the real money is not in panel printing.
What happens in 20 years when China has complete dominance of the solar market and those "cheap" solar panels get tripled in price because there is no competition left and the rest of the world can only grit their teeth?
Everyone warns of this scenario, but it never seems to happen in real life. Sure, the old, inefficient producers disappear as foretold, but the goods in question just keep getting cheaper and more plentiful. Can you think of any historical counterexamples?
what we should do then is to support local manufacturing by purchasing massive amount of solar panels, building battery based grid storage, switching transportation to electric on massive scale.
slapping tariffs on foreign products ensures that our manufacturing becomes even more backward, while the rest of the world takes off.
if we want to avoid monopoly - build own capacity, competitively.
I think it applies equally to furniture or solar. If you want quality local manufacturing, it is better to let it compete on the global market. Help by placing orders, may be, but let it compete.
Otherwise we'll only prolong inevitable decline.
Example: go to Japan and check in into a modern hotel. Then look at the hardware - door latches, bed, toilet... Then compare the quality of these products against their American counterparts. An isolated example, may be, but the outcome is higher quality at lower prices.
If there is only one manufacturer of solar panels in China, but that is not the case.
If the Chinese don't produce solar panels, the price would have been tenfold instead of tripled. With the Chinese in the game, tripling may not even happen, because the Chinese will compete with themselves.
The US are at war with China. Trade is just one aspect.
The issue is that they cannot 'win' that war. They can only delay the rise of China.
At the moment US' actions are uniting the Chinese people behind their government so the Chinese might actually be able to (or forced to) take a harder line on some issues.
It's the exact same playbook as Huawei -- govt-backed "dumping" of loss-priced goods in an attempt for total market dominance. And US companies have historically been way too willing to expose trade secrets to Chinese manufacturers in exchange for temporarily cheaper supplies -- a Faustian bargain.
[0] https://www.amazon.com/Factory-Man-Furniture-Offshoring-Amer...