We have some advantages, like our lead in technology, but few of them are natural advantages. So I actually think we're the long term losers of the second cold war. Especially if we try to ignore it as it starts.
You talk about a cold war as in specifically U.S. vs China. If it is just U.S. vs. China (meaning the U.S. isolates itself further from its allies in the future), then the U.S. will lose. China has a quarter of the world's population, heavily invests in science and technology, and has a population that is intensely nationalistic and works its ass off. The need for self-censorship and the cultural resistance to individualism means that the Chinese will always struggle in the arts, but that's about it.
What’s going to happen with the demographics in China?
China and Russia may not get along with each other or the West, but both have expended extensive effort building influence against the West and each other, and have their own extensive network of relationships to leverage.
The West’s advantage is productivity.
> China has a quarter of the world's population
1.4/7.8 < 18%
What's the practicality of that? It's not like the rest of the US is dealing less with China because it's less allied with them in the ways that really matter like business or trade.
Don't forget Western business interests, which are politically powerful and will often succeed at blocking any action that interferes with their short-term profits. Their loyalty is to their shareholders, and they'll sell everyone else out for them. I actually see this as the biggest problem preventing the West from taking effective action.
The PRC doesn't have this problem, because its businesses are clearly subordinate to its political apparatus (e.g. they've been making examples out of very large and successful companies lately).
True, and I don't know how much longer this can last. As an example, the rise of TikTok has certainly taken me by surprise. I've always seen world-class social media apps as a Silicon-Valley thing, something that only the US managed to produce. But now, not so much.
Taiwan recently overtook Intel in semiconductor manufacturing, another area where we used to be peerless. How long before China matches is on that front as well?
Chinese industrial policy is kicking our ass. The Fortune 500 executives that kiss Xi’s ass know this (https://thehill.com/business-a-lobbying/business-a-lobbying/...). That’s why they’re so obsequious.
> True, and I don't know how much longer this can last.
Yeah, especially since many, many Americans seem to stupidly reassure themselves by wishfully thinking it's some kind of natural advantage they have (e.g. the Chinese only copy, etc.).
IMHO, it's not too wrong to assume the PRC essentially has technical parity now, which should be pretty concerning to Americans because they also stupidly disposed of many of their other capabilities for short term business reasons.
Twitter/Vine did not want to pay creators. I don't know the history on why YouTube/Twitch/TikTok figured it out and why Snap/Twitter/FB drag their feet with it. I remember there was a turning point where many large creators on Vine decided to move to Instagram/YouTube because it was easier to monetize.
Come on, that's sorta like saying "Google's only interesting technology is its search algorithm" (I'm being a little loose here, but going back 20 years I'd say that's true). When it's the defining feature of your product, it's the only thing that matters and why it's the leader. Unless somebody can mimic TikTok's success, dismissing them seems arrogant.
> which I doubt is that different or innovative compared to Netflix or Youtube
Speaking from personal experience, Youtube has a horrible recommendation system, and Netflix is somewhere between okay and good.
China's drive to reduce dependence on imports of high-tech goods is a reaction to the US' attempts over the last few years to use this dependence against China.
The US has used its central position in the world's financial system to force other countries to stop doing business with certain Chinese companies, such as Huawei. This can be a death sentence for these companies. Huawei can't buy 7nm chips from anyone - including Chinese companies - because those companies are afraid of US sanctions.
China has recognized that it is vulnerable to this type of economic aggression, and is taking measures to insulate itself. I expect to see China, Russia and other countries targeted by sanctions build up financial systems that bypass the US dollar, and for China to try to reduce dependence on high-tech imports.
This all goes back to the aggressive foreign policy that Trump initiated, and which Biden appears to be continuing.
Biden is a bust and next time around we either get Trump or Kamala...I don't think any sane person would feel confident in either of them. The elite in this country caused this mess with China and they will end up finishing us off thanks to their election games.
Maybe leadership at the top doesn't matter. There is the rest of the government, a huge organization of mostly unelected life term bureaucrats many of whom have probably seen the last cold war. They may end up saving us or China stumbles massively and their disadvantages(aging population, badly built infrastructure) bite them enough for us to survive.
I think we don't even need the best leadership...just someone who is kinda courageous and somewhat competent. That plus all the good things the US has going for it might be enough to solve this crisis.
We have had instances in the past of a black swan coming out of nowhere to save the day. Maybe this will happen again in 2024. As far as I can tell the Democrats don't have to choose Kamala although how often has the VP not gotten serious consideration in recent times? Especially when she is the establishment favorite?
And while it would be nice to see Trump get knocked out in the primary, all signs point to him being too far ahead of any other republican to be knocked out.
Just a sad situation all around that we have to hope for a pleasant surprise.
Exactly 100% of the time that it was the election where the party had a first-term incumbent, back to Humphrey in 1965, and that...isn’t something the DNC probably wants to repeat. Harris is only a potential candidate in 2024 if Biden doesn't run for reelection, and even then isn’t a shoo-in for the nomination unless Biden resigns before the primaries and she runs as the incumbent President. Which is such an extreme scenario that its not worth considering.
Heck, even for outgoing Presidents, the sitting Vice President hasn't been a contender in the subsequent Presidential nomination contest since Gore on 2000 (neither Biden not Cheney were contenders), and the only VP to actually be elected (rather than succeeding on death or resignation) to the Presidency in...quite a long time...was George Bush in 1988.
The media bubble around Harris is driving Democrats straight to the cliff. Minorities, who make up 40% of the party and are over represented in critical swing states, don’t like her. She was polling at mid-single digits among Black voters in the south (behind Biden, Sanders, and Warren) before she pulled out: https://www.politico.com/news/2019/12/04/kamala-harris-black.... She was polling around the same among Latinos in her home state of California.
Apart from that, she’s a terrible retail politician. When I went to see the candidates speak in Iowa back in 2019, Elizabeth Warren stood around giving everyone hugs and taking selfies after the speeches were over. Harris, meanwhile, quickly retreated to her campaign bus to avoid having to shake hands and talk to people.
You mean the bubble of persistently hostile coverage, or something that doesn't actually exist?
This sort of coverage is a liability for Democrats because it insulates them from information. A glaring example of this is Elizabeth Warren. It should have been news from the beginning that she had failed to establish personal networks with Black or Latino voters during her tenure as Senator. Her Super Tuesday supporters were 80% white, for an electorate that was only 50% white. When Democrats win elections by turning out Latinos in the southwest and Black people in the south, Warren won just 5-6% of those voters on Super Tuesday, behind Michael Bloomberg.
Elizabeth Warren was a dead-on-arrival candidate because minorities didn’t like her and they’re 40% of the Democratic Party. That should have been a huge story. Instead, the media fawned over her for months because they personally loved Warren. Super Tuesday this blindsided everyone, even though it should have been predictable given what we knew about Warren from the beginning.
If Biden doesn’t run in 2024, expect to see similar fawning coverage of Harris, focused on her “historic” identity and papering over her flaws as a politician. That creates a very real risk that Democrats nominate someone who their own base doesn’t like very much.
We need someone who understands capitalism and favors markets but also knows when to control the markets and not allow them to sell us under the table. Someone who understands their responsibility is the American economy and its people and not how well companies do in China or Indonesia or not. Yes, sure, we need foreign markets and they need us, but we should not cave in and let them limit what we can do in their country but then allow them to do as they will here. It has to have some reciprocity. We also need to take into account labor laws and environmental impact when assessing tariffs.
Edit: At this point I believe that cutting the cords to China would at least incur a 50% drop in purchasing power of the average consumer in the medium term.
The ban on Huawei was a good 1st step, which should be followed with an protectionist approach to trade with China. (as long as it refuses to act in good faith with the US.)
It will affect the US economy in the short term, but the US has felt like a frog being slow boiled for the last 30 years. The CCP is now accelerating because they finally have the leverage to twist the US's arm in economic retaliation. Globalist trade is based around bi-directional open channels. The way the west has resigned multiple industrial disciplines to China, cannot be defended under any economic school of thought.
Post WW2 America knew what was up. They knew to export low-margin industries to nations they could tie up in stringent trade rules and had the militaristic asymmetry to enforce said rules. (They weren't necessarily unfair either)
With Africa, India and SEA being at the point of 1980s China, now is the time to pump some money and get large-scale low-cost manufacturing setup in these nations. It would be a win-win arrangement of monumental proportions. It helps that some of these countries are either deeply suspicious or are already in an exploitative neo-colonialist arrangement with China, making them willing to look at alternatives. (I do not mean doing stupid things like Belt-and-road though)
Now like all tug-of-wars of power, this is going to appear quite 'unethical'. But, I can't think of a single instance in history where an 'ethical' player beat a motivated 'hook-or-by-crook' player in a competitive setup. Also, as far as war goes, this is the most peaceful way to engage in it.
did they now? Frontline: Coming From Japan [The Fall Of The US Television Industry] (1992) https://www.youtube.com/watch?v=aesJTsZqm6c
"September 30, 1990. HOW DID Japan destroy the American television industry? The secret history of that strategy reveals how Japanese manufacturers and the Japanese government first created an anti-competitive cartel ..." https://webcache.googleusercontent.com/search?q=cache:iVdEh3...
Direct assault on the entire American electronics industry as a form of revenge for ww2, and the late limp dick non responses leading to total collapse of whole sector https://www.chicagotribune.com/news/ct-xpm-1987-04-23-870131...
Japan even had foreign currency quota and ownership limits just like China does today. "MITI'S SUCCESSES AND FAILURES IN CONTROLLING JAPAN'S TECHNOLOGY IMPORTS" https://www.jstor.org/stable/43294946
That's a first step, but not a stopping condition, IMHO. I'd say it should continue until there's less ideological conflict (e.g. movement towards political liberalization instead of away from it).
> Post WW2 America knew what was up. They knew to export low-margin industries to nations they could tie up in stringent trade rules and had the militaristic asymmetry to enforce said rules. (They weren't necessarily unfair either)
More than that, it knew not to become too economically dependent/entwined with ideological opponents. IIRC, there were significant restraints on trade with the Communist Bloc (off the top of my head: CoCom, tying trade policy to human rights (Jackson–Vanik_amendment), and requirements that trade be conducted with hard currency (e.g. no credit)).
I am reminded of 1940s US-Soviet relations where FDR & friends saw Stalin as the lovable rascal leading us all toward a lovely future of enlightened, global despotism under the new faith of dialectical materialism (nowadays otherwise named). Given the chummy trade relations we maintained with our 'enemies' throughout the 'Cold War', I suspect Soviet capitulation was kind of, like, an accident. I don't think our money-masters or politburo want Americans as we know them to survive.
Genuine question: doesn't Chinese crackdown on its tech industry and private education industry have a greater impact on Chinese people (who are also investors) than it does Americans?
Your post seems to imply that both actions were designed almost specifically to harm American pension and hedge funds. I would think that is just a side effect of the real goal (whatever that exactly is).
I am in China currently, but I am as ignorant of the underlying motives behind the crackdowns. I just know some Chinese friends involved in after school education (which is a huge market here) who are worried right now. I do believe it is possible, however, that the crackdown on private education is because of the pressure that kids are put on over here. But maybe it's naive of me to think that.
But the PRC government doesn't see it like that. Historically, they are far, far more vulnerable to their own people than they are to the US, which at the end of the day just wants to buy cheap junk and sit around streaming movies.
So if I see the CCP moving against financial interests inside China, I'm going to assume that they view those financial interests as the threat they're trying to control.
[1] And there are a LOT of such people here on HN.
1) it’s crazy expensive to have kids in china now. This is putting off people from having kids. Removing the one child policy hasn’t helped the birth rate and with a growing aging population, china needs more people to have kids. Removing things that cause having kids to be expensive will (their hope) make couples want to have kids.
2) the last couple of generations have worked their butt off to put their kids in higher education for the dream of a better life and a white collar job. Recently they tried to merge schools which would make some degrees useless and force graduates into blue collar jobs. After the recent protests the merging of schools got scrapped. I believe this move is a stepping stone to try and prevent some people from progressing to degrees and force more people into blue collar jobs and keep their manufacturing industry alive.
Most people in the west who get a degree as a lawyer don’t go work at McDonald’s for the next 40 years, despite the fact we have too many lawyers. They choose to not work at all until they can find a job with their degree.
[1] http://www.moe.gov.cn/srcsite/A06/s3321/201802/t20180226_327...
Why search for underlying motives when the overt motivates are clear; Chinese tech companies should 'come home' to mainland capital markets. The script is simple:
1) Ticket X is floated in an NYC-based exchange 2) China announces some regulatory crackdown affecting X, whose valuation falls precipitously 3) X goes private at a fraction of its original valuation 4) X is re-listed Shanghai / Hong Kong 5) The regulatory challenges affecting X miraculously dissipate
Here's the data to back it up: https://www.census.gov/foreign-trade/statistics/highlights/t...
China imports about $9 billion in German car parts each year. That's in addition to about $17 billion worth of cars exported from Germany to China each year, making China the 3rd largest export market for German cars.
The trade-offs with trade are a little more complex than that. For example, if foreign steel was super cheap, you could have the people previously working in steel work in construction, and build more buildings. Or if midwestern auto manufacturing jobs were middle-class due to unions, but the economy shifts to services like Amazon, there is no inherent reason why service jobs couldn’t also be unionized.
In principle it’s not that different from automation - you can think of either as a black box you put money in and get product out. If you are playing your other cards right (admittedly a big if) it would be possible to largely benefit from either.
Traditionally they’ve been worried about inflation but they’ve overestimated that most of the past decade (although it’s jumped up recently in response to the massive short term Covid spending). I don’t think the new stuff being proposed, while large, is nearly as high on a yearly basis so hopefully it can hit a non-inflationary sweet spot (although who knows).
One concrete thing I would 100% advocate though, which I guess is an example of a "nuanced" strategy as you alluded to:
Gimp / legislate away white-labelling of foreign products and drop shipping-like businesses. These have had a huge "spam" effect on products and consumer's brand-awareness that it'd be so worth it. It's made people unable to discern quality which is a huge win for places like China that at the bottom-end of the price spectrum simply don't have the quality we expect and would usually want to avoid by virtue of paying more.
* He was deemed a racist for many reasons. One of which was using his leadership and influence to stoke anti-Asian sentiment. You're not debating this point, right? Whataboutism is one thing, but worse when paired with denialism.
* "Politicians who willingly infected people with covid" - Does it bother you that politicians would downplay the safety of American citizens related to an infectious disease to suit their own political ends? Or is this is a criticism you only levy against your political rivals? Do you really want to compare scorecards on Trump vs. his political rivals on public health?
* Ignoring that the vast majority of BLM events were peaceful, which superspreader events are you referring to? They were outside, in the summer, often mobile, with a large share of mask-wearing attendees. I don't see any evidence of any of these events becoming superspreader events.
It’s hard to take seriously the claim that accusations of racism are always made carefully and never used as a cheap partisan attack.
The guy who was against it was a racist because he couldn't articulate anything other than "China bad" and his policies to address China were useless at best and harmful to America at worst. He only wanted to look tough against a made up enemy but refused to change anything at home.
If he was actually serious about competing with China, we would have been talking about Trump's infrastructure bill and had a plan on how to ween us off Chinese high-tech manufacturing (which is the best in the world), but now 4 years later we are scrambling trying to figure out how we will build fabs (one part of the equation) at home. For all the crying about China, he did shockingly little in actually addressing the issue (like almost all the issues he cried about).
Anyone who looks at out current situation and comes to the conclusion we need to bomb China is a racist in my eyes. They are only motivated a fear of a rising eastern power and have no motivation in actually investing stateside to improve American hegemony.
https://www.washingtonpost.com/news/wonk/wp/2015/10/10/steph...
My only question is China apparently doesn’t think it need foreign investment any more? I mean this latest move will scare a lot of foreign investment away (“that’s a nice valuation you have, would be a shame if we made all for-profit companies illegal”). No doubt the Chinese are smart enough to know this so I assume they have enough domestic wealth to supply any capital needs?
Still, scaring off the international markets seems like a bad move.
China hasn't really needed more foreign investment for quite a while. They get plenty of foreign capital from international trade.
What they needed was foreign IP, which they acquired by forcing foreign companies into joint ventures if they wanted access to the Chinese market. Not to mention state-sponsored industrial espionage.
At this point it's safe for any foreign investor to assume that any investment proposal in China that doesn't involve the transfer of IP to China is a scam.
>...Secured debt takes first priority in payment; it is also typically preserved during bankruptcy under what is referred to as the "absolute priority" rule — since the lender of secured debt offers a loan to a troubled borrower only because he is guaranteed first repayment when the loan is up. In the Chrysler case, however, creditors who held the company's secured bonds were steamrolled into accepting 29 cents on the dollar for their loans. Meanwhile, the underfunded pension plans of the United Auto Workers — unsecured creditors, but possessed of better political connections — received more than 40 cents on the dollar.
>Moreover, in a typical bankruptcy case in which a secured creditor is not paid in full, he is entitled to a "deficiency claim" — the terms of which keep the bankrupt company liable for a portion of the unpaid debt. In both the Chrysler and GM bankruptcies, however, no deficiency claims were awarded to the wronged creditors. Were bankruptcy experts to comb through American history, they would be hard-pressed to identify any bankruptcy case with similar terms. .
https://www.nationalaffairs.com/publications/detail/the-auto...
This battle was always going to happen! They just thought they had the better legal arrangement and would instead stick it to the pensioners. I have no sympathy.
No sympathy why? Because they're greedy investors and on the other side are hard working honest pensioners?
My actual issue is more along the lines of caveat emptor. People bought junk bonds in a company that then went bankrupt. That means they're going to be in court trying to recover money, and there's a lot of risk there about what they might or might not recover.
To the extent that the legal resolution was unprecedented... so was the top carmaker entering bankruptcy with all of those employees and pensions on their books. Biggest bankruptcy of that sort since the depression. Precedent isn't a suicide pact, when things get weird then people can adapt.
The example I quoted was about Chrysler. The actual largest bankruptcy was Lehman Brothers not Chrysler (or GM) The Lehman Brothers bankruptcy was about 15 times larger larger than Chrysler.
If the government wanted to save the pension, then the government should have increased the bailout to pay for it. This would have been better than breaking the rule of law just because the non-secured creditors have more political pull.
Surprise. Meanwhile the U.S. has no will to change anything.
The current global mercantilist scheme is not a good thing.
This is the result of at least fifty years of incompetence from US political "leadership". This isn't about democrats or republicans. They have all been ignored their duty to look after national interests. Instead, they continue to play dumb-as-can be political games for self and party as opposed to acting with people and nation as objectives.
The most current example of this is the, again, dumb-as-can-be infrastructure spending proposal.
I dare anyone to make a list of ten companies who have chosen to locate their operations somewhere other than the US due to issues with our roads and bridges. Just ten. That's not much to ask, is it?
One would not spend this kind of money to "bring back" one company. No. You would want dozens. Well, name ten. Just ten.
You can't. You can't because the entire premise is dumb-as-can-be false. NOBODY is going to relocate or make a massive investments in the US because we spend trillions of dollars on redoing perfectly good roads, bridges and government buildings. Nobody.
This is unbelievably dumb at a time when we need to be incredibly smart.
Here's a list of 397 cities in the US:
https://en.wikipedia.org/wiki/List_of_United_States_cities_b...
I dare anyone to find ten companies who chose not to operate in the US because they could not find good roads and bridges in any one of these cities.
Frankly, I can't even think of a single company, much less ten. We are being told we need to spend unimaginable amounts of money on roads and bridges. Put simply, it's complete bullshit and it is the kind of decision someone makes to lose, not to win.
What do we need to spend money on?
My guess is that #1 has got to be education. The problem with this is that it is a long term investment. This decision should have been made twenty years ago. It takes that long for results to produce economic returns.
The Chinese were sending their kids to US universities twenty years ago. They are all running companies in China right now. While this was going on our educators focused on race, class and ideological warfare. While China is trying to be as entrepreneurial as possible our educators focused on producing brain-dead socialists, a great example of which is representative Ocasio-Cortez, probably the best example of just how far off the mark US education has gone. As someone who actually lived in the kind of thing this moron is pushing I cannot believe she was not laughed off the stage within microseconds of coming to the scene, much less reach the level she has.
If you are the product of the kind of brainwashing the US educational system has delivered over the last couple of decades you will disagree with this. Of course. However, that does not make the fantasies you believe true. Anyone who has lived and has been educated outside of this distortion field cannot believe the nonsense US some young adults actually believe. Things like supporting socialism and wearing a t-shirt with Che Guevara (a mass murderer) as a sign of who-knows-what, are baffling to anyone who was not subject to ideological elements in US education.
This is the first time I have, in the decades I have lived in the US, heard a major leader on the left (in this case, Biden) finally speak the truth on communism and socialism:
https://youtu.be/eL2ThTOaHXg?t=18
Will our educators now stop with the nonsense?
Instead of burning cash on roads we need to put businesses on those roads. Industry. We need to dump billions into industries such as electronics and semiconductors. Heck, we need to dump billions into ever single industry, because they are ALL GONE.
Try to buy US-made wire, screws or connectors for example. Some, sure, however, the overwhelming majority of everything that goes into consumer, commercial, industrial and military products is made in China.
How is that a formula for success? At all? We are setting up to spend trillions rebuilding roads and bridges. This will not attract or compel even a single company to bring a non-trivial amount of jobs to the US. And, while we are busy spending money we don't have on absolute bullshit, Chine is going to continue to invest money as fast as they can on what really matters. They will invest on and subsidize any business or business segment that can deliver true long term competitive advantages for their nation and people.
We will wake up, ten years later, with a bunch of nice new roads and bridges and twice the unemployment. On top of that, this year, so far, we have let over a MILLION people come through the southern border.
https://www.reuters.com/world/americas/us-border-arrests-top...
At this run rate it is likely that this year alone that number will top a couple million. If we continue at this pace you are looking at five to eight million in four years.
BY DEFINITION and as a matter of cold-hard facts, 100% of these people are unemployed.
And, again, as a matter of cold-hard facts, we are NOT magically producing two million additional jobs per year to fully employ them.
And so, we have a situation where China is bound to take even more jobs out of the US while we invest in the wrong things and actively import millions of unemployed.
Despite what this might sound like, this isn't political at all. This is as common sense as things can get. If you give me the opportunity to damage a competitor by taking away business (China taking away jobs), driving them deeper into debt (waste money rebuilding roads and bridges) and increasing their baseline costs (importing millions of unemployed). Well, that's a dream. That's a competitive dream.
If your competitors insist on self destructing you take every possible opportunity to push them over the cliff. That's what China is doing. Not because they are evil. No. It's because we are stupid and we are doing it to ourselves.
Looking at it with detachment, from the perspective of a competitor, it's almost too easy. We have been consistently stupid for fifty years. What did people think would happen? You don't win a basketball game by giving your opponents free turnovers. You win by scoring more than they do and controlling the ball as much as possible. We have been giving it away for fifty years, and, just like in a baseball game, there comes a point beyond which reversing the score is simply impossible. If we don't demand more from our politicians the writing is on the wall, it has been there for all to see for quite some time.
Western governments and corporations underestimate China far too much. Western banking dynasties go back a few hundred years, Chinese history and culture is thousands of years old and they operate in time scales of multiple generations.
Western bankers and corporations are spring chickens compared to China.
China as a country and culture only cares about one thing. Making the entire world an empire for the Han. They see everyone else as inferior, barely human.
They will do anything to accomplish this, no matter how long it takes.
All these western corporations, investment bankers and governments who think China's the future are right and they're helping them along swimmingly, what they don't realize is, they have no place in the Chinese future and will be discarded.
To be fair a given business in the U.S. that produces something isn't going to care about geopolitics. They made things in the U.S. by underpaying immigrant laborers, then when they noticed wages were cheaper in mexico they moved manufacturing there, then did the same when China became even cheaper and higher quality than Mexico. All these business leaders care about is quarterly profits and getting bonuses to personally enrich themselves as fast as possible. They could care less about what happens in the world around them if they can afford to drink their cares away in utopian Napa.
Easy does it MAGA. The PRC is a different animal than regular Chinese people.
However, China's global ambitions and their xenophobia goes back much further than the PRC.
Because in the end, let's face it, the real problem is the CCP and not China itself. If China was a democratic country, the threat would be way smaller.
People really don't seem to get this. The communism red herring is just the same red herring it was with the USSR.
https://www.wsj.com/articles/investors-rethink-china-bets-af...
That's a huge amount of money and will dramatically and negatively impact the public pension funds. For instance, Illinois pension fund already has a $100-$300B deficit.
https://www.illinoispolicy.org/moodys-report-illinois-pensio...
Combined with this effort, not only has billions of U.S. dollars just went to China without anything in return, but now they're only purchasing within their own country.
This economic war is accelerating.