US Export Restrictions, Intel Layoffs, Applied Materials, and TSMC(fabricatedknowledge.com)
fabricatedknowledge.com
US Export Restrictions, Intel Layoffs, Applied Materials, and TSMC
https://www.fabricatedknowledge.com/p/us-export-restrictions-intel-layoffs
12 comments
I suppose it's about hampering the China's export industry on one hand, and China's ability to make advanced weapons, on the other hand.
It's more an act of the cold war, and less an attempt to help US industry profit more.
It's more an act of the cold war, and less an attempt to help US industry profit more.
> It's more an act of the cold war, and less an attempt to help US industry profit more.
As well as to make companies finally decouple from China.
Everybody saw China shake down Apple and should have taken the hint to start moving operations. Yet none of the C-suite in the US were willing to risk their bonuses by being the first company who pulls out of China while their competitors don't.
This puts the boot into the short-term capitalist thinking and forces the issue.
As well as to make companies finally decouple from China.
Everybody saw China shake down Apple and should have taken the hint to start moving operations. Yet none of the C-suite in the US were willing to risk their bonuses by being the first company who pulls out of China while their competitors don't.
This puts the boot into the short-term capitalist thinking and forces the issue.
Not sure why you’ve been downvoted.
It’s like when universities pushed state governments to implement COVID pandemic policies because they know they all need to but they also know the first one to do it alone will take it in the shorts.
It’s like when universities pushed state governments to implement COVID pandemic policies because they know they all need to but they also know the first one to do it alone will take it in the shorts.
>This puts the boot into the short-term capitalist thinking and forces the issue.
Yes, but companies where never expected to or supposed to implement these policies. It will be worthwhile to use chinese factories until the moment they are cut off.
Yes, but companies where never expected to or supposed to implement these policies. It will be worthwhile to use chinese factories until the moment they are cut off.
It's pretty disturbing and disgusting that the President would threaten to strip people of their citizenship for having the 'wrong' job.
Is there any crime you could commit in the US that is do bad it would result in loss of citizenship?
No other country would behave this way, but I guess we should expect that from one of only two countries that taxes all it citizens worldwide, even if they've never even visited the US.
Given that US citizenship is difficult and ludicrously expensive to get rid of(presumably as some kind of punishment for wanting to do so) possibly some of these people might actually be happy about if they are dual citizens.
Is there any crime you could commit in the US that is do bad it would result in loss of citizenship?
No other country would behave this way, but I guess we should expect that from one of only two countries that taxes all it citizens worldwide, even if they've never even visited the US.
Given that US citizenship is difficult and ludicrously expensive to get rid of(presumably as some kind of punishment for wanting to do so) possibly some of these people might actually be happy about if they are dual citizens.
Generally (and it's still hard in these cases) you can lose your citizenship if you are convicted of treason, found to have served in a hostile foreign country's army, working for a country's government when you are the same nationality, etc.
I'm sure a LOT of countries have laws like these in one form or the other. I'd imagine that the inside baseball on this is the US is effectively declaring China an enemy, and so therefore can make this threat. The only question is how actionable it is.
I'm sure a LOT of countries have laws like these in one form or the other. I'd imagine that the inside baseball on this is the US is effectively declaring China an enemy, and so therefore can make this threat. The only question is how actionable it is.
This isn't true. US born citizens, excluding those naturalized or with a dual citizenship elsewhere, simply cannot be stripped of citizenship for any reason. Because this would reduce them to statelessness.
Although the UN treaty signed on this isn't binding for the U.S., it would certainly break a taboo and give justification for other countries to reduce their citizens to statelessness while they're in the U.S., thus blocking the possibility of repatriating them back to their home country.
Although the UN treaty signed on this isn't binding for the U.S., it would certainly break a taboo and give justification for other countries to reduce their citizens to statelessness while they're in the U.S., thus blocking the possibility of repatriating them back to their home country.
>"you can lose your citizenship if you are convicted of treason"
Only if the treason was committed with the confirmed intent of loosing a citizenship. Otherwise the citizenship stays.
Only if the treason was committed with the confirmed intent of loosing a citizenship. Otherwise the citizenship stays.
I found this [0] that the logic followed is a citizenship generally has to be voluntarily resigned but several actions can make you "accidentally voluntarily resign" it so to speak. It's strange to me Biden would do this especially since we aren't in open war with China but every day I wake up this world gets more strange. It does suggest certain crimes must be done with the intent to lose your citizenship as you suggest which makes Biden's action even more dangerous.
[0] https://www.nolo.com/legal-encyclopedia/when-us-citizens-can...
[0] https://www.nolo.com/legal-encyclopedia/when-us-citizens-can...
I did not find anything there that can make one "accidentally voluntarily resign".
>"It's strange to me Biden would do this"
I might have skipped it but where / when did Biden specifically threaten stripping citizenship. The search does not confirm such threats have been made.
>"It's strange to me Biden would do this"
I might have skipped it but where / when did Biden specifically threaten stripping citizenship. The search does not confirm such threats have been made.
https://news.yahoo.com/biden-chip-controls-may-force-0929571...
https://www.theregister.com/2022/10/14/american_tech_workers...
https://www.nytimes.com/2022/10/13/us/politics/biden-china-t...
By forcing Chinese-Americans in particular (as in Chinese, who also hold American citizenship) to choose between their work or their citizenship he is defacto threatening to strip their US citizenship. Dual citizens have basically been handed a choice: give up your US citizenship to continue working in your field or find work in the US.
https://www.theregister.com/2022/10/14/american_tech_workers...
https://www.nytimes.com/2022/10/13/us/politics/biden-china-t...
By forcing Chinese-Americans in particular (as in Chinese, who also hold American citizenship) to choose between their work or their citizenship he is defacto threatening to strip their US citizenship. Dual citizens have basically been handed a choice: give up your US citizenship to continue working in your field or find work in the US.
Well sorry it is totally different. As US citizens they must follow the laws of the US. Break the law and go to jail. If they do not want to go to jail they must stop working in China. Alternatively they can tell the US to go fuck itself and renounce their US citizenship. But they have to do it explicitly. The US will not strip their citizenship on their own.
He isn’t threatening to strip anyone of their citizenship. He is making certain acts crimes if they retain citizenship.
The government can't strip people of citizenship for this, but they can make it a crime for citizens to work for these firms. Though if you renounce, it is no longer a crime.
[deleted]
tenpies(2)
The latest rounds of sanctions seems to have been extended to protect in particular Qualcomm and Micron.
Qualcomm by preventing Chinese fabless design houses such as unisoc in creating high end arm socs for mobile phones. And Micron by targeting YMTC.
Qualcomm by preventing Chinese fabless design houses such as unisoc in creating high end arm socs for mobile phones. And Micron by targeting YMTC.
There's a lot of speculation in this piece. Almost too much for it to be informative.
Well, the URL sets expectations appropriately, at least.
I find only Asianometry on youtube delivers well researched reports on the semi industry. Everyone else just posts FUD that drives clicks.
The CHIP act makes way more sense to me financially + getting the bill passed given this stuff. Long-term this does just push China into self-sufficiency faster... But near term, US co's profit?
I was mostly curious about the jobs market angle (we are busy in the GPU / AI / data center space) but it was light there..
I was mostly curious about the jobs market angle (we are busy in the GPU / AI / data center space) but it was light there..
I think it's more about making the US independent from China, not about hurting China. Of course it is phrased as the latter so that it won't hit as much kicking and screaming from US companies who suddenly have to scramble for new supply chains.
Biden dropped a real hammer on Chinese chipmaking.
Thresholds:
• Logic chips with non-planar transistor architectures (I.e., FinFET or GAAFET) of 16nm or 14nm, or below;
• DRAM memory chips of 18nm half-pitch or less;
• NAND flash memory chips with 128 layers or more.
A one-year Temporary General License softens the blow for the US allies. Everything that includes the US made tools and software for design and manufacturing, and machinery is cut out, so is any person with US citizenship, green card or who lives within the US.
Thresholds:
• Logic chips with non-planar transistor architectures (I.e., FinFET or GAAFET) of 16nm or 14nm, or below;
• DRAM memory chips of 18nm half-pitch or less;
• NAND flash memory chips with 128 layers or more.
A one-year Temporary General License softens the blow for the US allies. Everything that includes the US made tools and software for design and manufacturing, and machinery is cut out, so is any person with US citizenship, green card or who lives within the US.
Wait for the screaming if China forbids its nationals to work in AI research in the west.
Is this actually a concern? If so, that's actually a huge deal to have so many people from an "enemy state" working in a field.
Do you have any numbers or sources on that?
Do you have any numbers or sources on that?
The real screaming would come if either side prohibits Chinese nationals from attending (and paying for) US grad schools.
That may not even be necessary at this point. Chinese nationals I know all went to US/Australia/UK universities but their younger siblings seem to be much more enamored with the Chinese universities in tier 1 cities instead. Combination of growing nationalism and decreased prestige with graduating with an international degree.
How are they going to do AI research without advanced modern chips?
For a long time (basically forever) China hasn't really invented anything of it's own. China has a large, complex, and well run espionage network responsible for stealing trade secrets from western companies. There's a great book, Disunited Nations, that talks about it in gory detail. Essentially, China will steal anything it can and build it locally. Espionage like this is generally expected (even among allies) but the scale at which China operates this is breathtaking. Majority of the large scale hacks they have done in recent history are targeting organizations with special IP (for example military technology).
So, knowing this I would assume they will simply use this system to get access to patents for the chips they need and begin fabrication themselves. This blow slows them down but doesn't stop them. To stop them, you'd need to stop their well oiled espionage machine.
So, knowing this I would assume they will simply use this system to get access to patents for the chips they need and begin fabrication themselves. This blow slows them down but doesn't stop them. To stop them, you'd need to stop their well oiled espionage machine.
They will build their own.
It was the Chinese that pushed through RISC-V at the end of the day.
They are allocating absolutely ridiculous amounts of capital towards building their own lithography expertise now.
Trump pretty much forced Biden's hand when he stuck his dick in ASMLs relationship with China. By playing that card so early Biden effectively has to cut off access to TSMC, GlobalFoundries and Samsung for it to actually stick and not just have wasted the biggest and most important trade card W.R.T semiconductors.
It was the Chinese that pushed through RISC-V at the end of the day.
They are allocating absolutely ridiculous amounts of capital towards building their own lithography expertise now.
Trump pretty much forced Biden's hand when he stuck his dick in ASMLs relationship with China. By playing that card so early Biden effectively has to cut off access to TSMC, GlobalFoundries and Samsung for it to actually stick and not just have wasted the biggest and most important trade card W.R.T semiconductors.
Slowly
The communist clique that's enslaved the Chinese people is still reliant on obtaining technology from the West to do that.
People often talk about and accuse the Chinese government of being bad for its people, but in the absence of a better alternative their government is still the best thing for the people. What else would the people of China support?
If you really want to accuse the government of being bad then you must offer a better alternative. There was a point in time where any Chinese person would have given an arm and a leg for a visa to a western country. That’s now changing with the rising middle class in China. But if we really wanted to say the government is bad, then we also need to welcome their best and brightest, grant visas, and offer them an alternative.
Otherwise think about the impossible situation you levy on the ordinary Chinese citizen with rhetoric like “hey we don’t like how your government treats you because your government sucks, but also you can’t join our team. Therefore we will just fight you (in war) and you can either fight against us or help us fight your government (oh but sorry you still cannot join us).” Obviously the average Chinese person will most likely still support their own way of life and government, no matter how bad you think their government is for them, because at the end of the day you are not really doing anything better for them.
Even if you go and “liberate” them from the tyranny then what? Install a puppet government like in Afghanistan? Grant them all citizenship and annex it as part of the US (there are more Chinese people there so they would “take over” if that happened especially if we really believe in one vote per person)?
If you really want to accuse the government of being bad then you must offer a better alternative. There was a point in time where any Chinese person would have given an arm and a leg for a visa to a western country. That’s now changing with the rising middle class in China. But if we really wanted to say the government is bad, then we also need to welcome their best and brightest, grant visas, and offer them an alternative.
Otherwise think about the impossible situation you levy on the ordinary Chinese citizen with rhetoric like “hey we don’t like how your government treats you because your government sucks, but also you can’t join our team. Therefore we will just fight you (in war) and you can either fight against us or help us fight your government (oh but sorry you still cannot join us).” Obviously the average Chinese person will most likely still support their own way of life and government, no matter how bad you think their government is for them, because at the end of the day you are not really doing anything better for them.
Even if you go and “liberate” them from the tyranny then what? Install a puppet government like in Afghanistan? Grant them all citizenship and annex it as part of the US (there are more Chinese people there so they would “take over” if that happened especially if we really believe in one vote per person)?
Where does this meme come from that China is this horror show held together only by torturing and enslaving their population into submission? The Chinese government gets its legitimacy from thousand year old traditions and the fact that the people there have more than doubled their incomes every decade and accordingly it enjoys massive public support. The American government is basically the exact opposite of that.
The genocidal death camps of Xinjiang Muslims may have a role there.
https://www.bbc.com/news/world-asia-china-22278037
https://www.bbc.com/news/world-asia-china-22278037
But that is not most people's experience. China is 90% Han Chinese and the overwhelming majority of people don't live in those conditions. Trust in government in China is near an all time high (https://www.statista.com/statistics/1116013/china-trust-in-g..., https://news.harvard.edu/gazette/story/2020/07/long-term-sur...). None of this is to say that any of that is morally or ethically justified, just that in terms of social stability China is probably in the top 10% of countries.
Where does this meme come from that China is this horror show held together only by torturing and enslaving their population into submission?
History? Until Deng's reforms created a private market in food, block and village Chinese Communist Party (CCP) committee had absolute power of life and death over those under it through their issuing of food ration coupons. This data from some Chinese grad students I knew who lived through that and the transition, plus it was generally known. See also how the one child policy was implimented. They also still execute a lot of people, and politically a lot of corruption cases which sometimes go that far are clearly Xi and his new Tsinghua clique eliminating competition. Which has created a great many enemies in the CCP, that is its ruling class especially now with the suppression of tech companies.
At a higher level, the estimated 70 million people the CCP killed after gaining power in 1949? That may be high, a lot of it is from Mao's enemies, but on the other hand we keep increasing the estimates of deaths from the Cultural Revolution. Which Mao used to regain power after his very costly Great Leap Forward and the ensuing famine per those estimates killed tens of millions and cost him de facto paramount position.
Post-Mao and the Gang of Four the rulers of China made various agreements to ensure such things would not happen again. Xi and his new clique shredded them, and for a less contentious than the issues with Xinjiang Muslims example look at the brutality of Xi's Zero COVID policy. If Xi navigates the current every five year congress meeting to get his third term there's no reason to expect things to get better. Very possibly the same if he fails and is effectively deposed.
Those thousand year old traditions? Mao did his very best to stamp them out, especially in the Cultural Revolution. I would wonder if they're done at any greater than a cargo cult level today, although that might be enough for the public. Except of course those members of metro areas that are getting smashed when a few cases of COVID are found in them, those "owning" real estate, or those without a social safety net where 4 grandparents depend on 2 parents who depend on 1 child for the extremes of the effects of the one child policy.
For the economics you cite, also see how the residential property bubble is bursting now. That's not necessarily the fault of Xi, was inevitable sooner or later, but it is happening now in concert with other negative things including backlash like this very uncertain in its effects US chip tech embargo (the US Commerce Department has a great deal of discretion in what it will license someday).
History? Until Deng's reforms created a private market in food, block and village Chinese Communist Party (CCP) committee had absolute power of life and death over those under it through their issuing of food ration coupons. This data from some Chinese grad students I knew who lived through that and the transition, plus it was generally known. See also how the one child policy was implimented. They also still execute a lot of people, and politically a lot of corruption cases which sometimes go that far are clearly Xi and his new Tsinghua clique eliminating competition. Which has created a great many enemies in the CCP, that is its ruling class especially now with the suppression of tech companies.
At a higher level, the estimated 70 million people the CCP killed after gaining power in 1949? That may be high, a lot of it is from Mao's enemies, but on the other hand we keep increasing the estimates of deaths from the Cultural Revolution. Which Mao used to regain power after his very costly Great Leap Forward and the ensuing famine per those estimates killed tens of millions and cost him de facto paramount position.
Post-Mao and the Gang of Four the rulers of China made various agreements to ensure such things would not happen again. Xi and his new clique shredded them, and for a less contentious than the issues with Xinjiang Muslims example look at the brutality of Xi's Zero COVID policy. If Xi navigates the current every five year congress meeting to get his third term there's no reason to expect things to get better. Very possibly the same if he fails and is effectively deposed.
Those thousand year old traditions? Mao did his very best to stamp them out, especially in the Cultural Revolution. I would wonder if they're done at any greater than a cargo cult level today, although that might be enough for the public. Except of course those members of metro areas that are getting smashed when a few cases of COVID are found in them, those "owning" real estate, or those without a social safety net where 4 grandparents depend on 2 parents who depend on 1 child for the extremes of the effects of the one child policy.
For the economics you cite, also see how the residential property bubble is bursting now. That's not necessarily the fault of Xi, was inevitable sooner or later, but it is happening now in concert with other negative things including backlash like this very uncertain in its effects US chip tech embargo (the US Commerce Department has a great deal of discretion in what it will license someday).
There are a lot of things here that I don't understand:
- The issues around semiconductor manufacturing.
- How Chinese politics work.
- How the big Chinese manufacturing hubs like Shenzhen work. The exports are spectacular, so I suspect they're incubating capitalists.
But what I do know is China is ~1 billion people, is moving in to being a country with some savings and is really getting the hang of high technology (eg, Huawei is the cutting edge of telecoms and it is going to shock everyone in a decade that they are at the cutting edge of nuclear tech as their reactor program keeps chugging along).
If they are seriously challenged to a tech war, we are relying on the Chinese government to defeat the Chinese people. It isn't possible to intellectually starve out a country that big, especially not in the age of the internet. They can achieve miracles in 20 years.
- The issues around semiconductor manufacturing.
- How Chinese politics work.
- How the big Chinese manufacturing hubs like Shenzhen work. The exports are spectacular, so I suspect they're incubating capitalists.
But what I do know is China is ~1 billion people, is moving in to being a country with some savings and is really getting the hang of high technology (eg, Huawei is the cutting edge of telecoms and it is going to shock everyone in a decade that they are at the cutting edge of nuclear tech as their reactor program keeps chugging along).
If they are seriously challenged to a tech war, we are relying on the Chinese government to defeat the Chinese people. It isn't possible to intellectually starve out a country that big, especially not in the age of the internet. They can achieve miracles in 20 years.
> But what I do know is China is ~1 billion people
China built its massive manufacturing industry on vast quantities of cheap labor and a massive global consumer base. However, Chinese labor costs have been rising sharply for the past decade for many reasons but one major factor is that the one child policy was very successful and lead to a drastic hollowing out of their younger workforce and consumer base. Meanwhile the older experienced generation are aging out and China is entering a demographic winter which will lead to a 50-60% decline in population by mid to late century depending on whose numbers you trust. There is a similar hollowing out of the consumer base occurring all over the world with few exceptions. So it is highly improbable that China can fill in the most complex high tech supply chains by itself quickly enough to be useful while its workforce dwindles, it’s losing markets to sell to, and while its major trading partners are actively trying to thwart its progress.
China built its massive manufacturing industry on vast quantities of cheap labor and a massive global consumer base. However, Chinese labor costs have been rising sharply for the past decade for many reasons but one major factor is that the one child policy was very successful and lead to a drastic hollowing out of their younger workforce and consumer base. Meanwhile the older experienced generation are aging out and China is entering a demographic winter which will lead to a 50-60% decline in population by mid to late century depending on whose numbers you trust. There is a similar hollowing out of the consumer base occurring all over the world with few exceptions. So it is highly improbable that China can fill in the most complex high tech supply chains by itself quickly enough to be useful while its workforce dwindles, it’s losing markets to sell to, and while its major trading partners are actively trying to thwart its progress.
Very well said.
And it doesn’t have to be this way. America would take a much different stance if the Chinese system were less “malignant”. Live and let live. Like the Japanese, Australia, UK etc.
And it doesn’t have to be this way. America would take a much different stance if the Chinese system were less “malignant”. Live and let live. Like the Japanese, Australia, UK etc.
> if the Chinese system were less “malignant”
China is a country with so much racial, linguistic, and geographical diversity that it would likely break up if it were less draconian. Historically this has occurred repeatedly. This is likely to happen anyway sometime over the next few decades given the geopolitical and demographic headwinds and in a much more devastating manner than it otherwise would, but it shouldn’t be surprising that the CCP won’t lie down and accept it.
China is a country with so much racial, linguistic, and geographical diversity that it would likely break up if it were less draconian. Historically this has occurred repeatedly. This is likely to happen anyway sometime over the next few decades given the geopolitical and demographic headwinds and in a much more devastating manner than it otherwise would, but it shouldn’t be surprising that the CCP won’t lie down and accept it.
>one major factor is that the one child policy was very successful and lead to a drastic hollowing out of their younger workforce and consumer base
IMO just the opposite. One child policy was also "very successful" in concentrating wealth and is largely responsible for why PRC is spitting out 11M STEM graduates a year, around all OECD combined. There will be generation wealth transfers once old folks start dying (many in tier1/2 own homes + have enough savings) and analysts are predicting increasing consumption when multiple inheritances get concentrated in the one-child gen households.
> improbable
11M STEM grads per year = PRC has the LARGEST demographic divident of SKILLED LABOUR in human history trying to capture high tech supply chains by itself. They just started moving up Academic + S+T + R&D over last few years, will take another 5-10 years to filter way through industry. The chances are not only good PRC will succeed but it's likely PRC will eclipse west in medium term. As for internal market share, the point of moving up value chain is to produce wealthier consumers. Shedding 600M lower income who buys $1000 rmb phones while gaining 60M upper income who buys 10000rmb will increase the value of the consumer base. Meanwhile we're still looking at PRC with ~700M until 2100s, which is still a stupid large market to serve. It's the kind of scale that enables PRC to drive down costs in any industry state decides to focus on.
> thwart its progress.
Once PRC starts reaching parity, it will start to thwart back. Not only will western high tech lose 1/3 of PRC revenue, they'll start losing market share from emerging economies, meanwhile PRC could turn on that industrial policy valve to ensure western high-tech become permenantly loss making unless supported by huge industrial policy.
IMO just the opposite. One child policy was also "very successful" in concentrating wealth and is largely responsible for why PRC is spitting out 11M STEM graduates a year, around all OECD combined. There will be generation wealth transfers once old folks start dying (many in tier1/2 own homes + have enough savings) and analysts are predicting increasing consumption when multiple inheritances get concentrated in the one-child gen households.
> improbable
11M STEM grads per year = PRC has the LARGEST demographic divident of SKILLED LABOUR in human history trying to capture high tech supply chains by itself. They just started moving up Academic + S+T + R&D over last few years, will take another 5-10 years to filter way through industry. The chances are not only good PRC will succeed but it's likely PRC will eclipse west in medium term. As for internal market share, the point of moving up value chain is to produce wealthier consumers. Shedding 600M lower income who buys $1000 rmb phones while gaining 60M upper income who buys 10000rmb will increase the value of the consumer base. Meanwhile we're still looking at PRC with ~700M until 2100s, which is still a stupid large market to serve. It's the kind of scale that enables PRC to drive down costs in any industry state decides to focus on.
> thwart its progress.
Once PRC starts reaching parity, it will start to thwart back. Not only will western high tech lose 1/3 of PRC revenue, they'll start losing market share from emerging economies, meanwhile PRC could turn on that industrial policy valve to ensure western high-tech become permenantly loss making unless supported by huge industrial policy.
> 11M STEM graduates a year, around all OECD combined. There will be generation wealth transfers once old folks start dying (many in tier1/2 own homes + have enough savings) and analysts are predicting increasing consumption
If STEM graduates alone could increase a country’s wealth then India would be the global superpower. You need a consumer base in proportion to your production which China lacks, and your production needs to be focused on high value add production which China’s is not. Wealth transfer between generations only works if there is a large enough number of people to buy or at least value the assets being transferred. When your population is going down sharply then there are too few people chasing too many assets which leads to an asset price crash so that wealth will go up in smoke to a significant degree. Similarly, a surge in spending based on concentration of inheritance is inflationary which leads to a loss of wealth. This is not a recipe for economic strength.
If STEM graduates alone could increase a country’s wealth then India would be the global superpower. You need a consumer base in proportion to your production which China lacks, and your production needs to be focused on high value add production which China’s is not. Wealth transfer between generations only works if there is a large enough number of people to buy or at least value the assets being transferred. When your population is going down sharply then there are too few people chasing too many assets which leads to an asset price crash so that wealth will go up in smoke to a significant degree. Similarly, a surge in spending based on concentration of inheritance is inflationary which leads to a loss of wealth. This is not a recipe for economic strength.
> If STEM graduates alone could increase a country’s wealth then India would be the global superpower.
India is plausibly on the way to being a global superpower [0]. Unless something changes that they can outdo the US in the next 20 years.
If the Chinese government goes dictatorial and predictably suicides their own economy, and the US government keeps committing to the print-money-no-worries "strategy" it isn't out of the question that India could be the global superpower by 2040.
[0] https://www.weforum.org/agenda/2019/01/india-will-overtake-t...
India is plausibly on the way to being a global superpower [0]. Unless something changes that they can outdo the US in the next 20 years.
If the Chinese government goes dictatorial and predictably suicides their own economy, and the US government keeps committing to the print-money-no-worries "strategy" it isn't out of the question that India could be the global superpower by 2040.
[0] https://www.weforum.org/agenda/2019/01/india-will-overtake-t...
Good thing PRC isn't India and has the infra and institutions to move up value chain, which it has consistently over the past decade, from capturing 8$ in iphone assembing fees to 25%/~100$ by iPhoneX to YMTC and other suppliers chasing after rest of BOM, which triggered current US efforts to contain. PRC export data over couple few years reflect PRC exporting much less low-end goods and more intermediate/high end (i.e. passing Germany in car exports), and trend is only continuing specifically because PRC is focused and succeeding in transitioning into high value add production. So PRC not only has talent but also the base to support it, she's is demonstrably moving up various innovation/S&T indexes and value chain. Unlike India, PRC is by all acounts a super power.
>economic strength.
Hence the huge savings rate. Yes, a lot of housing wealth will (hopefully) get inflated away / go up in smoke. There still is significant amounts of general savings currently locked away will naturally be released into consumption, particularly by T1/T2 consumers which is enough to drive demand to sustain competitive indigenous industries. Like the shit tier consumption right now from small % of high-income PRC markets is still enough to make PRC significant market for many global companies, that share is set to increase as population mix shift away from poor migrant workers in informal economy to high income, high skilled workers. Overall the share of consumers who sustains transition into advanced economy will be growing, which is a recipe for economic / comprehensive national strength. The wealth transfer release won't be a surge (deaths spread out over time) but over decades along the predictable demographic pyramid slope that is also relatively easy to plan for. Also historically, countries moved up value chain fine without the recent absurd financialization of "wealth", which is arguably a social detriment. IMO PRC that address issues relating to wealth is one that will be "stronger" than societies that can't.
>economic strength.
Hence the huge savings rate. Yes, a lot of housing wealth will (hopefully) get inflated away / go up in smoke. There still is significant amounts of general savings currently locked away will naturally be released into consumption, particularly by T1/T2 consumers which is enough to drive demand to sustain competitive indigenous industries. Like the shit tier consumption right now from small % of high-income PRC markets is still enough to make PRC significant market for many global companies, that share is set to increase as population mix shift away from poor migrant workers in informal economy to high income, high skilled workers. Overall the share of consumers who sustains transition into advanced economy will be growing, which is a recipe for economic / comprehensive national strength. The wealth transfer release won't be a surge (deaths spread out over time) but over decades along the predictable demographic pyramid slope that is also relatively easy to plan for. Also historically, countries moved up value chain fine without the recent absurd financialization of "wealth", which is arguably a social detriment. IMO PRC that address issues relating to wealth is one that will be "stronger" than societies that can't.
Huawei stole its telecom tech from Nortel. I wouldn't call them innovative, more like great at industrial espionage.
I do not doubt that Huawei would not have hesitated to steal from Nortel, given an opportunity, but everything that I have read about the alleged theft from Nortel did not seem to indicate that Nortel really had something valuable to be stolen and there is little doubt that Nortel's doom was caused by their management and not by thieves.
On the other hand, I know for a fact that Huawei has entered the mobile phone market by buying, and not by stealing, all the required technology and know-how from various companies, e.g. from Siemens.
Like other Chinese companies activating in various domains, after being taught well how to duplicate Western designs, Huawei was able to make them both better and cheaper, so the companies which have foolishly sold their smartphone technologies to Huawei have exited the market, while Huawei would have become the dominant producer, had it not been sabotaged by USA in order to prevent that.
Those who believe that the only reason that explains the commercial successes of the Chinese is IP theft are delusional.
Obviously they have started by copying whenever they could do that, but in recent years the Chinese companies have been much more innovative than most US companies, which are too risk-averse and too much oriented only towards corporate customers or towards very rich customers, to be able to launch any really innovative product.
On the other hand, I know for a fact that Huawei has entered the mobile phone market by buying, and not by stealing, all the required technology and know-how from various companies, e.g. from Siemens.
Like other Chinese companies activating in various domains, after being taught well how to duplicate Western designs, Huawei was able to make them both better and cheaper, so the companies which have foolishly sold their smartphone technologies to Huawei have exited the market, while Huawei would have become the dominant producer, had it not been sabotaged by USA in order to prevent that.
Those who believe that the only reason that explains the commercial successes of the Chinese is IP theft are delusional.
Obviously they have started by copying whenever they could do that, but in recent years the Chinese companies have been much more innovative than most US companies, which are too risk-averse and too much oriented only towards corporate customers or towards very rich customers, to be able to launch any really innovative product.
That has been debunked on a HN a few times already.
I'd call this post a lot of wishful thinking that doesn't look at where the economy in China is heading nor the attitude of countries around the world to China.
There are uncertainties, but it is hardly wishful thinking to theorise that the world's premier manufacturing superpower could figure out how to manufacture something new.
If anything it speaks volumes about their 2nd rate governance strategies that the outcome is in question.
If anything it speaks volumes about their 2nd rate governance strategies that the outcome is in question.
Russia was the premier manufacturing superpower yet rapidly fell behind the west in many areas of manufacturing.
Just because you make a lot of widgets doesn't automatically mean you can climb the value chain.
Just because you make a lot of widgets doesn't automatically mean you can climb the value chain.
> They can achieve miracles in 20 years.
Why they didn't do so already?
There hardly been a single regime in history so eager to slaughter hens laying golden eggs.
China is extremely anti-business, and anti-development (unless it's real estate development.) I first understood it when I seen block, and blocks of factories being bulldozed to make space for luxury hotels, and hooker parlours. Tells of priorities of people in power.
Why they didn't do so already?
There hardly been a single regime in history so eager to slaughter hens laying golden eggs.
China is extremely anti-business, and anti-development (unless it's real estate development.) I first understood it when I seen block, and blocks of factories being bulldozed to make space for luxury hotels, and hooker parlours. Tells of priorities of people in power.
> Why didn't they do so already?
China's GDP has increased 8x since the year 2000.
It has an enormous and well educated population. Thousands of universities. Their research and development output is soaring.
It's become a manufacturing hub like nothing the world has ever seen before.
There are lots of challenges with respect to the ideology of the government.
But the development in China the last couple of decades has been miraculous already.
China's GDP has increased 8x since the year 2000.
It has an enormous and well educated population. Thousands of universities. Their research and development output is soaring.
It's become a manufacturing hub like nothing the world has ever seen before.
There are lots of challenges with respect to the ideology of the government.
But the development in China the last couple of decades has been miraculous already.
> China's GDP has increased 8x since the year 2000.
China was a 3rd world nation which experienced an industrial revolution, which like all industrial revolutions beforehand was faster and more prosperous because they could just buy the relevant technology and expertise, which was now even cheaper then it was for the previous industrial revolution.
Their GDP growth tells us nothing about whether their government is good at running a modern economy (evidence says no): because you have to pretty much be actively trying to fail to not have "miraculous" GDP growth when industrializing up from subsistence level farming.
China was a 3rd world nation which experienced an industrial revolution, which like all industrial revolutions beforehand was faster and more prosperous because they could just buy the relevant technology and expertise, which was now even cheaper then it was for the previous industrial revolution.
Their GDP growth tells us nothing about whether their government is good at running a modern economy (evidence says no): because you have to pretty much be actively trying to fail to not have "miraculous" GDP growth when industrializing up from subsistence level farming.
> China was a 3rd world nation which experienced an industrial revolution
Why did that happen? Why isn't it happening so rapidly for other "3rd world" nations? I mean it wasn't luck. Economists will point to specific policies of the Chinese government that made it happen so quickly.
Why did that happen? Why isn't it happening so rapidly for other "3rd world" nations? I mean it wasn't luck. Economists will point to specific policies of the Chinese government that made it happen so quickly.
> Economists will point to specific policies of the Chinese government that made it happen so quickly.
> they are the same "industrial policies" that japan, south korea, and the u.s (and many other advanced countries) used to develop rapidly and fully
At a very high level yes. But when you look closer, not at all. Abenomics for example, can be contrasted with Reagonimics [1]. Because while there are some similarities, there are also important differences.
But more importantly, why does this matter? No one said the Chinese government used "special secrets" for the wildly successful past two decades. The original question was "when will China start".
You seem to be of the same view as everyone else here: they already did start.
You also avoided the question I asked. Can you answer it?
Why didn't China's rapid rise out of poverty happen to other "3rd world" nations? Some poor countries have the same industrial policies as the US but aren't quickly rising out of poverty. You need to explain why China is different.
[1] https://www.wsj.com/articles/BL-JRTB-18051
At a very high level yes. But when you look closer, not at all. Abenomics for example, can be contrasted with Reagonimics [1]. Because while there are some similarities, there are also important differences.
But more importantly, why does this matter? No one said the Chinese government used "special secrets" for the wildly successful past two decades. The original question was "when will China start".
You seem to be of the same view as everyone else here: they already did start.
You also avoided the question I asked. Can you answer it?
Why didn't China's rapid rise out of poverty happen to other "3rd world" nations? Some poor countries have the same industrial policies as the US but aren't quickly rising out of poverty. You need to explain why China is different.
[1] https://www.wsj.com/articles/BL-JRTB-18051
> Abenomics for example, can be contrasted with Reagonimics [1]
what i was referring specifically to was the period of dramatic growth and improvement in quality of life, so japan up until the 90s, the us until around the end of the 60s etc
in those periods, they had real honest-to-god industrial policies how they wanted to direct research and development, improve technology and investment etc
abenomics and regonomics are basically the opposite and signal the neoliberal turn in thinking
> The original question was "when will China start".
You seem to be of the same view as everyone else here: they already did start.
> You also avoided the question I asked. Can you answer it?
Why didn't China's rapid rise out of poverty happen to other "3rd world" nations?
> Some poor countries have the same industrial policies as the US but aren't quickly rising out of poverty.
You need to explain why China is different.
following neoliberal economic thinking (mainstreamed in the 70s) that austerity and free-market economics (including allowing vast monopolies) and privatization of public services would somehow bring everlasting high growth (supply-side economics) but instead results in lower growth, higher costs (just look at cost of healthcare in the us) and bigger wealth-gap causing all kinds of issues
many "3rd world" countries followed those neoliberal economic policies and quickly found out that austerity and privatization of too many public services (to name just a few things) just caused collapse and chaos, and then they cant pay off their imf loans meaning... more privatization and austerity as part of the condition to extend payments (this just causes a downward spiral and locks many countries in and almost "debt peonage" type of situation)
---
actually this is really a long discussion hard to do in hn, but probably we are more in agreement than disagreement i am guessing
but if you have a different perspective im very curious to see your explanation as well, so please by all means ^^
> Why didn't they do so already.
They did. The Chinese economy has pulled more people out of poverty in the past few decades than any economy in human history. By far.
"In 1990 there were more than 750 million people in China living below the international poverty line - about two-thirds of the population.
By 2012, that had fallen to fewer than 90 million, and by 2016 - the most recent year for which World Bank figures are available - it had fallen to 7.2 million people"
Mistaking the China of today for the China of 50 years ago would be naive and dangerous. Fortunately most world leaders are savvy enough to be taking action to compete.
This is not an endorsement of the Chinese government. It's just a factual observation of recent history.
They did. The Chinese economy has pulled more people out of poverty in the past few decades than any economy in human history. By far.
"In 1990 there were more than 750 million people in China living below the international poverty line - about two-thirds of the population.
By 2012, that had fallen to fewer than 90 million, and by 2016 - the most recent year for which World Bank figures are available - it had fallen to 7.2 million people"
Mistaking the China of today for the China of 50 years ago would be naive and dangerous. Fortunately most world leaders are savvy enough to be taking action to compete.
This is not an endorsement of the Chinese government. It's just a factual observation of recent history.
I never quite understood that line since they pretty much purged themselves in the first place and were "lifting themselves" after sinking themselves in the cultural revolution. They opened up after visiting Asian Tiger economies and realizing they were far behind Singapore, South Korea, et al.
If you want to blame them for the bad you need to give them credit for recent accomplishments.
Unless you think it's a line that Americans sunk themselves in The Great Depression and therefore American leaders should get no credit for the following recovery.
Leaders change. Economic policy changes. China changed direction and lifted a huge number of people out of poverty. It's as simple as that.
> They opened up after visiting Asian Tiger economies and realizing they were far behind Singapore, South Korea, et al.
And? What's the point? That they learned by observing? Is that bad?
Unless you think it's a line that Americans sunk themselves in The Great Depression and therefore American leaders should get no credit for the following recovery.
Leaders change. Economic policy changes. China changed direction and lifted a huge number of people out of poverty. It's as simple as that.
> They opened up after visiting Asian Tiger economies and realizing they were far behind Singapore, South Korea, et al.
And? What's the point? That they learned by observing? Is that bad?
The Great Depression was not a deliberate purge, markets follow boom and bust cycles.
>And? What's the point? That they learned by observing? Is that bad?
It's a self-serving bias to attribute their economic development to their leadership. They would've developed sooner and are simply taking credit for getting out of their own way. Sure, you can point to specific projects and say "the government bankrolled this therefore it exists" but it's not like in their absence nothing would have developed. Hong Kong, Singapore, Taipei, Seoul, Tokyo et al have pretty skylines and good public transportation too.
>And? What's the point? That they learned by observing? Is that bad?
It's a self-serving bias to attribute their economic development to their leadership. They would've developed sooner and are simply taking credit for getting out of their own way. Sure, you can point to specific projects and say "the government bankrolled this therefore it exists" but it's not like in their absence nothing would have developed. Hong Kong, Singapore, Taipei, Seoul, Tokyo et al have pretty skylines and good public transportation too.
> The Great Depression was not a deliberate purge, markets follow boom and bust cycles.
Right. You're doing exactly what I pointed out before: making excuses for US economic policy when it fails but giving it the credit when it succeeds.
> They would've developed sooner and are simply taking credit for getting out of their own way.
Who is "they"? You do realize China has had more than one leader in the past 50 years?
> They would've developed sooner
Uh sure. So what? The point is that they are wildly succeeded the past couple of decades. The original claim that started this was they haven't done anything remarkable yet. Which as a matter of historical record, is wrong. The past 20 years have been remarkable for wiping out poverty in China. Regardless of whether or not that poverty could have been wiped out earlier, it was wiped out. And this happened under the current Chinese government. So the claim that the current Chinese government can "achieve miracles" in 20 years -- while exaggerated -- is far closer to the counter claim that they have achieved nothing yet.
> taking credit for getting out of their own way.
That would not be how most economists would describe Chinese economic policy. It doesn't even describe the relatively less controlled US economic policy.
Right. You're doing exactly what I pointed out before: making excuses for US economic policy when it fails but giving it the credit when it succeeds.
> They would've developed sooner and are simply taking credit for getting out of their own way.
Who is "they"? You do realize China has had more than one leader in the past 50 years?
> They would've developed sooner
Uh sure. So what? The point is that they are wildly succeeded the past couple of decades. The original claim that started this was they haven't done anything remarkable yet. Which as a matter of historical record, is wrong. The past 20 years have been remarkable for wiping out poverty in China. Regardless of whether or not that poverty could have been wiped out earlier, it was wiped out. And this happened under the current Chinese government. So the claim that the current Chinese government can "achieve miracles" in 20 years -- while exaggerated -- is far closer to the counter claim that they have achieved nothing yet.
> taking credit for getting out of their own way.
That would not be how most economists would describe Chinese economic policy. It doesn't even describe the relatively less controlled US economic policy.
"China is extremely anti-business, and anti-development". Really? Are you absolutely sure about that?
Certainly Xi doesn't think that he's anti-business, and much that he's done mirrors the EU's actions vs monopolies. But Xi also has no understanding of business, and wants to micromanage everywhere. I think he's already had a large chilling effect without wanting to do that. He could easily, clumsily, kill off most of the geese laying golden eggs for him by instilling more terror of the government than hope of profit. I'm not sure that'll happen, but reading his speeches to this new PRC congress I suspect so.
>first understood it when I seen block, and blocks of factories being bulldozed to make space for luxury hotels, and hooker parlours
The US did this on a national scale.
The US did this on a national scale.
"block, and blocks of factories being bulldozed to make space for luxury hotels, and hooker parlours"
Where did you see this?
Where did you see this?
This is likely to turn out to be the biggest failure of US policy maneuvering of this century.
By keeping China coupled to the Wests semi-conductor supply chain there was always pressure that could be applied in various ways, veiled threat of back-doored chips, etc.
Instead all you are doing is creating the perfect incubating scenario for a massive surge in Chinese semi-conductor technology.
If you think about where the Chinese are right now economically etc they are ready to move away from their previous growth engines and onto new things.
Part of that started happening about 10-15 years ago when they started massively investing in solar and kicking off their nuclear program. These days they produce ~80% of the worlds solar cells and the cells they produce are straight up better than what you can get elsewhere. CATL and their perfection of the LiFePO4 chemistry is another.
So maybe for the next ~5-10 years the US/West will have a substantial lead in semi-conductor process nodes. Unfortunately this is essentially the least effective time to do this. Moores law scaling has massively slowed down, we still get faster processors each years but not at the same rate as before and not so much through increased transistor density and even where that scaling is still relevant it's not scaling at the same cost anymore. True increased performance of computer systems in this day and age comes from software and the Chinese are not behind on that front at all and it's incredibly unlikely anything can be done to slow them down.
After that all it's really done is create most likely the ultimate competitor with infinite amounts of funding with a huge pipeline of STEM grads that will be encouraged to go into semiconductor supply chain tech. All the while with an expanding consumer class to buy all of this stuff and keep the wheels moving.
Sadly I just don't see this ending well for the West and in particular countries like mine that are at odds with China and yet dependent on them for economic continued existence.
The only way I could see it working would be to find some means to bring back trade agreements like the TTP that Trump canned and also work to ensure India doesn't get pushed into a closer relationship with China but I really don't believe the US has the required nuance in international relations to make that happen anymore.
By keeping China coupled to the Wests semi-conductor supply chain there was always pressure that could be applied in various ways, veiled threat of back-doored chips, etc.
Instead all you are doing is creating the perfect incubating scenario for a massive surge in Chinese semi-conductor technology.
If you think about where the Chinese are right now economically etc they are ready to move away from their previous growth engines and onto new things.
Part of that started happening about 10-15 years ago when they started massively investing in solar and kicking off their nuclear program. These days they produce ~80% of the worlds solar cells and the cells they produce are straight up better than what you can get elsewhere. CATL and their perfection of the LiFePO4 chemistry is another.
So maybe for the next ~5-10 years the US/West will have a substantial lead in semi-conductor process nodes. Unfortunately this is essentially the least effective time to do this. Moores law scaling has massively slowed down, we still get faster processors each years but not at the same rate as before and not so much through increased transistor density and even where that scaling is still relevant it's not scaling at the same cost anymore. True increased performance of computer systems in this day and age comes from software and the Chinese are not behind on that front at all and it's incredibly unlikely anything can be done to slow them down.
After that all it's really done is create most likely the ultimate competitor with infinite amounts of funding with a huge pipeline of STEM grads that will be encouraged to go into semiconductor supply chain tech. All the while with an expanding consumer class to buy all of this stuff and keep the wheels moving.
Sadly I just don't see this ending well for the West and in particular countries like mine that are at odds with China and yet dependent on them for economic continued existence.
The only way I could see it working would be to find some means to bring back trade agreements like the TTP that Trump canned and also work to ensure India doesn't get pushed into a closer relationship with China but I really don't believe the US has the required nuance in international relations to make that happen anymore.
Did anyone else watch/read Doug's podcast with YAVB about SiTime? I tried to read the transcript but gave up about 1/3 through, obviously podcasts are a low signal medium but even for a podcast I thought the pitch was very speculative and hard to follow.
Sorry to hear that - I would like to think it wasn’t speculative!
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Pretty dramatic stuff but unsure how this will benefit the US since obviously to have this much western talent and IP the Chinese weee investing heavily. Remains to be seen if the west is going to do likewise.