In the perspective of Chinese government, it is simply unacceptable that a toilet ordered by the air force cost more than $20k, or the number of ship manufacturers diminishes over years, or the average age of NASA engineers went from below 36 to above 55, or the best minds of the country spends their prime time figuring out how to increase CTR for ads revenue. Manufacturing and advanced research is a key to a nation, and China recognizes it.

Why do people get hung up on this? Specialty parts cost a lot.

To have a trained air force employee designing toilet seats is questionable, is that what the military should do? Maybe and the air force should explore 3D printers, so it's a waste that might be worth it. But lets not pretend $10,000 went to $300.

The Air Force’s $10,000 toilet cover - https://www.washingtonpost.com/business/capitalbusiness/the-...

I wonder if there are any follow ups on what else they 3D printed?

The military is kind of an odd organization. As the world in general increasingly specializes, the military doesn't. Not really. At the end of the day the military is there to "interface" with the rest of the world - and that's basically been how it was and how it's going to continue to be. Them having knowledge of how things - even toilet seats - are manufactured could be legitimately useful in their military function. It's essentially letting them get a first-hand view on how the world - particularly in terms of manufacturing - works. What steps, technology, infrastructure, etc etc are required to build things?

Ideally of course they would, and still should, get subject matter experts in to advise them for strategy and planning and all that. But it's somewhat naive to suggest this is likely to work perfectly all the time. It rarely does, because humans are going to human. If they can get some hands on experience it gives them some trusted internal people who can better communicate with the subject matter experts and ultimately reach better conclusions.

I think what's important is not they bought 3 toilet seats for $10,000 on planes that costs $100,000 a hour to fly.

Universal Camouflage Pattern costing $5 billion to develop and make, then gets ditched because it sucked feels like a bigger story. How does that happen.... Isn't that the military's main interface with the world.

The US government and military do plenty of things badly, and plenty of things well, and practically none of the people discussing them have any idea what either category actually contains.

Additionally as always with complex regulations and specifications there are ways to comply maliciously. This means comply by letter but charge for bullshit.

Another bonus are hurdles to enter the market for your competitors. If they don't know how to talk with government and comply they can't sell to government. This makes things expensive for government.

If every single part of the toilet has to be manufactured from raw materials, and fully tested and documented at each step of the manufacturing process, then a toilet can add up to $20k easily.

Also, anything that will be installed in a regular old non-military passenger plane is extremely expensive, because they must be able to prove that parts will not break off mid-flight, that it will not catch fire, and will be manufactured consistently and reliably.

Similar to Tesla's secret plan to produce cheaper and cheaper vehicles at larger scale, the boring truth isn't a big click winner.

There's identification of very specific technologies that currently need to be imported: "high-purity electronic materials such as photoresists for ICs." There's realism rather than hype: "Promote the demonstration operation of the C919 large passenger aircraft and the serialized development of the ARJ2I regional passenger aircraft." The C919 project, to build an airliner comparable to the Airbus A320, hasn't been going well, although prototypes are flying. So the goal for this plan is merely "demonstration operation". The ARJ2I is a 90-seat or so regional airliner now in early production. So those goals should be met. "Dominate world aircraft industry" might be nice, but that's not in the 5 year plan.

There's a longer range 2035 goals document, in which one goal is to get GDP per capita up into the middle of the developed country range.

Think if Equifax got pulled for "leaking" user data

[1] https://www.librariaeminescu.ro/ro/isbn/606-020-215-8/Vlad-P...

Actually, the CCP never formally accepted the foreign stock ownership structure, for example. It was always a grey area.

Nah, a lot of people just don't read the articles before commenting, whether it is on HN or anywhere else

Even to take it down a notch, what has happened in the US is just boring. You almost can't have a conversation without one of 5 of the same companies coming up.

This hasn't been really put to the test yet, has it? What's the cost of labor delta compared to the places where outsourcing from China would be attractive currently?

Yes. Their textile industry has been gradually leaving for much of the past decade, as cheaper production exists in several other countries at this point. Textile dominance by China peaked around 10-15 years ago. They will lose labor cost sensitive industries to their cheaper competitors as their economy continues to climb, as labor costs continue to climb. It took many decades for the US textile industry - the world's largest for a while in the 20th century - to be worn down by this same process. During the first 2/3 of the 20th century the US was often a leader in inventing new textile technology and manufacturing processes. Toward the waning days many US textile makers tried to modernize and or consolidate their domestic operations as a competitive advantage, it didn't stop the process. Most sent their manufacturing overseas ultimately. China is currently attempting to modernize, reduce labor in the manufacturing process, and that also won't stop the industry from leaving. Textiles are one of the first major industries that tend to leave due to being particularly labor cost sensitivity.

China is still the world's largest textile exporter, and may retain that crown for a long time yet given their size. A large chunk of their market share is going to be gradually dispersed across two dozen other nations.

Vietnam for example became the largest textile exporter to the US in 2019 (pre pandemic), overtaking China. Vietnam's GDP per capita is $3,600 versus $11,800 for China. Vietnam is in the position that China was 15 years ago in that regard. China will struggle to compete with labor that costs 1/2 or 1/3 what theirs does.

If the US could automate low-value manufacturing through robotics and get a significant cost advantage over China and pull back much of the low-value manufacturing that it lost, while getting very little labor benefit in the process, it would still be ideal for numerous reason to achieve that outcome (tax base, deprive China of that value, onshore capital and technology investment, some construction & maintenance value, wider economic ecosystem, and so on).

China's big problem with this process is of course that they have 1.4 billion people. High-value replacement jobs for so many of their low-value manufacturing workers is something beyond difficult (you don't need 100 million software developers to build China's tech infrastructure; you don't need 10x the workers to build as many planes as Boeing or Airbus do). High-value manufacturing for example doesn't absorb labor like low-value manufacturing does. Their social welfare costs over the next 30-40 years will be extraordinary as their demographics rapidly shift toward being an older society. They're already into a workforce decline demographically, those aging & retiring workers begin to shift more to the liability column in terms of cost. They need their workforce employed and pumping tax dollars into the system. Automation is not China's friend, even if they're the ones doing it to themselves (if they had a critical national labor shortage, that would be a different matter).

If China were to take over all of Germany's auto manufacturing (obviously we're talking a huge share of the global auto market), how many jobs is that worth to China and how does that scope to their 1.4 billion context (Germany has a mere 83m people)? What does something like that do for their context. That's the essential China labor and automation problem going forward. They could conquer a lot of high value manufacturing and be worse off overall than they are now, unless they can somehow keep all of their people employed, keep most of their low-value manufacturing employment simultaneously. And if China did use 4x the labor to build the equivalent of Germany's auto output (say they absorb their labor oversupply that way), that then caps the ability for that labor to rise economically, the margins won't be there to support far higher incomes, which has serious social consequences in terms of stability in China long-term. China would probably need to own all high-value manufacturing globally to both keep their people employed and keep incomes rising like they have been.

I think this question of unemployment and underemployment is one that's simply going to get worse everywhere, and I don't see a non-political solution. I just don't see a realistic way to employ everybody, or even a majority, in a high automation society.

So my feeling is, the countries that will be best placed to tackle this are the ones that are able to push forward a political solution. I'm not entirely sure of how socialist china is, but there are certainly some socialists in the CCP who would be perfectly happy for everybody to be unemployed or underemployed, and to pay for them from the profits of highly automated industry.

I think it's probably a question of ideological flexibility. Because China is both officially marxist, practically capitalist, traditionally confucian, and pragmatically developmentalist, they have a lot of options open when it comes to political solutions that western countries don't. So they could, for instance, just pay everybody UBI, then point out that China is a socialist country if elites object. That would be a harder argument in officially capitalist countries.

I don't imagine they'll go that way, but I guess the basic point for me is that productivity, employment, and welfare are largely the result of political decisions. You can run the economy like they did in the DDR, where everybody had a job even if it was totally meaningless. You can run the economy like in Japan, where if you have a job, you'll probably never lose it. These things have different tradeoffs. The biggest challenges are usually how hardened the political discourse is around work itself.

Honestly, I think the PRC's hubris is more than matched by the US's (and Western world's). They're still overconfident from the collapse of the Soviet Union, and seem to think the chips will inevitably fall on their side, so they still engage with a large amount of wishful thinking.

> And the ones that initially built the factories in China, can always pack up and move to a different country. So global corporations are now kind of "cycling through" a list of alternate underdeveloped countries to build factories in, and keep going until the options are all exhausted.

I'm not so sure...

1) I think it's ultimately the PRC's goal to have domestic champions replace those global corporations in the global economy (e.g. Apple declines as Huawei ascends)

2) I don't think the PRC is as stupid as the US was, and will not allow those companies to "pack up and move" to the degree it's disruptive to their ability to provide an unmatched manufacturing supply chain.

Yes, I still definitely agree with that one. US’s hubris is the undeniably the largest in the world.

> I think it's ultimately the PRC's goal to have domestic champions replace those global corporations in the global economy (e.g. Apple declines as Huawei ascends)

Maybe, maybe not? We’ll see if this goes well as planed. Easier said than done.

> I don't think the PRC is as stupid as the US was, and will not allow those companies to "pack up and move" to the degree it's disruptive to their ability to provide an unmatched manufacturing supply chain.

The point is, companies are already doing this. You’ll be surprised how much conglomerates like Samsung has already taken production out of China.

My understanding is that China's manufacturing supply chain is so well-developed that companies like Apple don't think they even have a choice except build their stuff there. The only things they're missing are a few things at the very high end. If they lack a commitment to free markets, its conceivable that they could use that advantage to slowly strangle their global competitors (e.g. allow their domestic champions a price/quality/volume advantages, while keeping the value proposition for global companies just good enough that continued dependence makes economic sense). To counter that, the US would also have to take bold steps away from free market dogma, against the interests if its corporate sector, which has relatively more political power, and against its reigning ideologies [1].

> The point is, companies are already doing this. You’ll be surprised how much conglomerates like Samsung has already taken production out of China.

I'd be interested to know how truly disentangled they are. My understanding is that even when companies move production away from China, they're still seriously dependent on China's manufacturing supply chain (e.g. they have to ship all the components from China to Vietnam for final assembly). I'm not aware of any efforts to replicate the range of capabilities elsewhere.

[1] The right would have issues with stepping away from free market economics, and I think the left would be skeptical of the international competition aspect.

> Two decades ago, as Apple’s operations chief, Mr. Cook spearheaded the company’s entrance into China, a move that helped make Apple the most valuable company in the world and made him the heir apparent to Steve Jobs. Apple now assembles nearly all of its products and earns a fifth of its revenue in the China region. But just as Mr. Cook figured out how to make China work for Apple, China is making Apple work for the Chinese government....

> No Plan B

> In 2014, Apple hired Doug Guthrie, the departing dean of the George Washington University business school, to help the company navigate China, a country he had spent decades studying.

> One of his first research projects was Apple’s Chinese supply chain, which involved millions of workers, thousands of plants and hundreds of suppliers. The Chinese government made that operation possible by spending billions of dollars to pave roads, recruit workers, and construct factories, power plants and employee housing.

> Mr. Guthrie concluded that no other country could offer the scale, skills, infrastructure and government assistance that Apple required. Chinese workers assemble nearly every iPhone, iPad and Mac. Apple brings in $55 billion a year from the region, far more than any other American company makes in China.

> “This business model only really fits and works in China,” Mr. Guthrie said in an interview. “But then you’re married to China.”

BFRI and VIEL for anyone whos interested.

The Germans do it differently and can get a better return investing in themselves.

In China they have invested heavily in the robots that make the robots. Sure they are playing catch up in some areas, for instance, chips where they don't have a TSMC yet.

Even farming, where do those green and yellow tractors go? Cotton picking in China.

Some China tech is way ahead of the rest of the world. The difficulty of competing is getting really hard hence sanctions against Huawei. They had got 5G and The West didn't even know what it was for.

We have seen it before, Japan was way ahead with electronics and commodity cars. But China has a vast internal market and can proceed without making cheap goods for the West. If Western companies want to outsource to Burkina Faso then fine.

Also into the mix is that Chinese brands are desirable in China and increasingly abroad. China has barely got started.

I have few bridges in Brooklyn to sell, good price.

I do agree that "power" is the issue here. It doesn't take much for China to look at how Bezos or Elon act and say "yeah, no, we're not going to have corporate leaders challenging the Party publicly".

Now the thing about five year plans was that they worked rather well at the beginning, so approximately until 1960. Back then, the economic power of a country was measured by its heavy industry, and in a post-WWII world where there was war damage to be fixed, an entire eastern part of the country (Slovakia) to be modernized from its earlier rural state, and new housing stock to be built, concentration of our five year plans on heavy industry made sense.

But slowly the world development started to diverge from the coal-and-steel line. And our central planners didn't take notice, or rather underestimated the significance of that development. They had, after all, a lot of success earlier with coal and steel, so they continued to plan for more coal and steel. Also, a lot of workers in those industries were card-carrying members of the Communist party, so it made sense to reward them for their loyalty.

We slowly lost our development edge, fell behind the West in automation, computer technology, semiconductors. The overemphasis on industry led to major ecological problems and pollution, and the emerging ecological initiatives proved to be a fertile ground for opposition. In 1989, the regime fell, and we were left with a huge, absolutely bloated, but mostly obsolete coal and steel industry that could not compete anymore. And its subsequent collapse was a source of significant societal disruption.

I saw the collapse of that industry first hand, growing up in a coal and steel city (Ostrava; just take Google Maps and look at the enormous chunks of industrial structures located literally inside the city, with residential buildings right next to the factories).

Now China does not seem to fall behind yet, they also allow a lot more capitalism than Communist Czechoslovakia did (in our country, even a private café was a rare sight; the regime was so ideologically pure that it purged even most self-employed people from independence into formal jobs).

But I can see a similar "it-must-stay-the-same-itis" in their proclamations that the country must never deindustrialize. Never is a bad word in mortal's mouths. If they fixate on industry at the cost of all other developments, they may go down the same route as Czechoslovakia eventually.

There isn't such kind of boneheaded inertia in China. Yet.

That is price paid for a system that kept a totally dumb person at the head of the country for 12 years. And when we got rid of him, the Soviets arrived in their tanks to correct our heresy (1968).

As for China - TBH we do not yet know what happens within China. The flow of information is fairly restricted. A lot more of the economy is outside direct control of the Party, and those parts of the economy are likely to be fairly functional; they have to compete on the international market, after all. But within the Central Commmittee, I wouldn't be surprised if boneheadedness wasn't a significant problem. Many politicians are of the "dumb, but cunning" sort, even in the West.

There's some of that. There's an official push in China towards self-sufficiency, and eliminating reliance on imports. The US used to have such a policy during the Cold War.

The coal and steel fixation created the European Union, which was originally "the European Coal and Steel Community". Britain grew to be a world power through coal and steel. As those declined in importance, they were taken over by the Government, under what was derisively called "lemon socialism". There was British Steel, British Coal, British Rail... All the old labor-intensive plants.

China has problems with inefficient state-owned businesses, which tend to be jobs programs. They're mostly owned by provincial and municipal governments, not the national government. Lots of steel mills and coal mines, inevitably. But since they make steel for export, they can't be too inefficient.

Sounds like smashing to me. Smashing down on private companies and innovations. Smashing down on private wealth and power. Smashing down on freedom and growth. You can tell the dictator is getting desperate if he stops the train of innovation.

Also, do you really think innovation will come from state companies? In that case, why didn’t 1980 China or 1980 Russia thrive?

You need a stronger argument to prove that state-associated companies can't innovate.

There's also plenty of counter examples too. The internet itself was largely created via DARPA, a US state-sponsored research agency. Ditto for the space station and most other space-related achievements prior to SpaceX.

I think the more nuanced, and boring, view is that a well functioning state can innovate, and so can well functioning private companies.

This comment probably isn't the place for it, but I do think for-profit companies will tend towards different sorts of innovation than for-the-public-good government agencies... but yeah, not for this comment.

It's totally consistent with their long term plans since the 90s or so.

Maybe it‘s about time to read the Chinese 5 year plans in depth.