This is not how free markets function.
It stops being free when government attacks economic activity, not when it promotes it.
In this regard, the Chinese government pouring large subsidies into solar panel production both spurred the economic activity around installing solar panels, and attacked / thwarted in around production of the panels themselves, if the production happens outside China. Only the US was able to somehow develop solar panel production.
Thats competition. It is a feature of markets.
not a bug.
No buyer has power to set prices and no seller does either.
A lot of private companies effectively operate above the law too! In theory the law can be enforced on them. In practice it often isn't.
Governments have lots of other incentives (like job creation, elections, income distribution)
A government has a monopoly on violence. A government has a monopoly on money printing and taxation. A government has a monopoly on the legislation. A government has far more human and financial resources than any other economic actor within its borders.
If a company goes out of business, people lose their jobs. If a government goes out of business, people lose their lives.
It is not a difference in degree, it is a difference in kind. There is a reason that economist distinguish between private firms and government.
Yes, they do favor their own companies and provide subsidies etc. that’s not the problem though, the problem is that they’re undercutting other companies by selling below cost thanks to those subsidies. Otherwise, we would have to call our farming subsidies the same.
I was originally trying to point out that it has always been important to keep your vital industries secure, it was very stupid of Intel and others to transfer so much technology abroad (to anyone) just to increase their margins, I think ASML did the best: You can purchase our machine, but that’s pretty much it.
Sounds like a nirvana fallacy. Yes, nowhere has a perfectly free market, just as nowhere has a perfectly corruptionless justice system and railroad tracks are never perfectly parallel. But there are definitely markets that are less free than others and actions that distort markets further, and it's right to call those out.
The whole point is that when in some market there is some nation trying to disturb the free market mechanism in its favor, other countries can't just be naïve and stand by doing nothing. They have to counter act and this is what happend in The Netherlands.
The US used its massive state surveillance apparel to spy on essentially every country in the world, not only for diplomatic advantage, which you might argue would be fair game, but also to steal industrial secrets and promote US companies (see e.g. https://www.mediapart.fr/en/journal/france/290615/revealed-m... for France, one of their supposed allies).
Paraphrasing you:
> The US heavily subsidize their companies and have large government bureaus that strategically guide industries over long time frames. For example, the US has been on a long, intentional path to destroying all international corn producers via subsidies, dumping, etc.
The US essentially destroyed the traditional crop growing in Mexico by a combination of subsidies and free trade agreements.
It is _true_ that China does not play a fair free trade game. It is _not true_ that the US, or any other country, does. (The reasons for it should be obvious btw, free trade only works if legislation is more or less the same everywhere, otherwise it's just stupid.)
You should see what Microsoft did. Forgetting the corruption the open document format, free/subsidised licences for students is almost the same thing.
Let's rather choose a set of principles and apply them without exception?
And my point has nothing to do with Chinese or Dutch or European, even though those are the examples I used.
The main thing is that it was a mistake to sell vital industries, and some people are really hypocritical when other countries do something like this, but in this particular case they’re finding out reasons to side with the Dutch government. I just want consistency, it is seldomly okay to allow any other entity into critical industries.
As far as I understand, Samsung, TSMC, and SMIC are all closely guarded by their respective governments. And China doesn't (didn't?) allow foreign companies to operate in China without a local partner at all. So I don't see the irony - everyone practices protectionism, some are just more subtle about it than others. Some China-specific examples:
tmnvix points out the perfectly analogous Chinese restriction of rare earth exports: https://news.ycombinator.com/item?id=45572420
China imposes more trade and investment barriers, discriminatory taxes, and information security restrictions than any other country by a vast margin. - https://ecipe.org/wp-content/uploads/2017/06/DTE_China_TWP_R...
As with most countries, China has adopted some policies aimed at protecting or promoting its domestic industries, including targeted quotas, subsidies to certain key industries and rejection of patents in critical industries. - https://www.rfa.org/english/news/afcl/fact-check-china-prote...
https://en.wikipedia.org/wiki/Made_in_China_2025 - government plan with securing first local, and the global key markets, for indigenous firms, the acquisition of foreign technology companies, and independence from foreign suppliers, as explicit goals.
A few more than half century old examples don't change what we can all see is the case in the present day.
They only backed up when the US told the Brits and France they would tank their economies still on US life support.
And, pray, why did the Machado win the hypocrisy prize on Friday? Why are American ships outside the waters of Venezuela?
The British and the French were concerned about the Suez, but Israel was not dependent on the Suez and went to war over their navigation being blockaded by Egypt in the Gulf of Aqaba and the Straits of Tiran, which was a violation by Egypt of maritime law. Aqaba is in the Sinai peninsula which is also bounded by the Suez.
https://en.wikipedia.org/wiki/Israeli_passage_through_the_Su...
> They only backed up when the US told the Brits and France they would tank their economies still on US life support.
But they did back off. The US was willing to stand up for Egyptian sovereignty even against their own allies. That isn't an example of non-western countries being unable to enact protectionist policies, it's an example of the opposite.
I suppose installing el-Sisi is also an example of protecting Egyptian sovereignty:
https://www.cato.org/commentary/ten-years-after-coup-us-stil...
> My example is about European piracy under the pretense of that foreign ownership supersedes sovereignty.
The British and French did something wrong 70 years ago and the world called them out for it, therefore it's hypocritical for the Dutch to call out a similar wrong thing being done against them now? Nonsense.
[1] https://www.latintimes.com/nicolas-maduro-losing-it-venezuel...
For some reason, over the past few decades the powerful countries from the West employed rhetoric to suggest that their actions are guided by principles and morals. That was most likely a reaction to a huge wave of anti-colonial revolutions and national liberation struggles that tore the Western empires apart. However, USA and Israel have taken off the mask over the past 2 years, and that weasly rhetoric is now over.
[1] https://en.wikipedia.org/wiki/Siege_of_Melos#Melian_Dialogue
But talking seriously, the OP didn't say that other countries never do it. Just that the powers have innumerable examples of coups to knock out governments that do this. A lot of them were democratic and popular governments.
Why do you feel the need go single out "the west"? I mean, where do you think the container ships crossing the Suez go to and come from? Do you think that the likes of China would be totally ok with their main trade routes being severed and instead having to go all the way around Africa?
You're framing things as if there's still a British empire syphoning the economies of their colonies all the way from Great Britain, with no one else involved or committed to any trade whatsoever.
Why do you think this is relevant in discussions over who would respond to shutting down the Suez canal? I mean, do you have a map?
Hell they're explicitly exploring using the northeast passage to bypass the Suez.
It would be foolish to sell off a great value like ASML or others that adds incredible value. But one should also not get mad when other countries do it, because they see their industries as valuable things as well.
Our markets are just getting more closed and different groups are being formed. Let’s hope other high value companies gather their IP rights as well.
This reads like a straw man argument. No one gets mad when other countries do it. At most, you see complains of protectionism being unilaterally imposed while benefitting from your competitor's openness. See for example the criticism directed at the likes of China for preventing foreign companies from even investing in their domestic market without a government-minder-as-a-partner scheme, while China throws a tantrum when there is even a hint of suggestion that Chinese companies should be subjected to the same type of treatment when operating abroad. See the case of TikTok, for example.
There is a huge difference between establishing from the beginning clear rules that set limits to foreign investment, like in China, and changing the rules afterwards, after luring foreign investors, and then taking ownership of their assets, like for Tik Tok and Nexperia.
Obviously I agree that USA and the EU have acted very foolishly in the past by exporting technology to China (foolishly for the national interests, while a few have been greatly enriched by this), but at least they followed consistent policies, not like now, when they change the rules of the game whenever they see that they are the losers.
Philips Semiconductors should have never been sold and become non-Dutch, but if they have been so stupid as to do this, they should assume their responsibility and finance the creation of a new European semiconductor device manufacturer, to ensure the independence of hostile entities.
If tit-for-tat is our policy, then we should at least be upfront about it and enshrine it in law, instead of using some ancient law to slap China with: that's arbitrariness.
But of course it benefits everyone at the expense of deficit countries, so why change or truly address the literature. Appealing to international law today as such is just appealing to entrenched interests.
But the matter of fact is that in a true free trade regime, imbalances should rebalance back to zero. The fact that the deficit is only growing is more than enough evidence that China is obviously the violators here. And everybody knows this.
Under a multilateral Bancor System which Chinese economists themselves advocated back in 2009, China would have been immediately subjected to massive FX overvaluation to degrade their conpetiveness.
I had to look that up and this stood out
> U.S. Secretary of the Treasury Timothy Geithner expressed interest in the idea of greater use of SDRs as a reserve. However, he was criticized severely for this in the United Statess, and the dollar lost 5 cents against the euro in exchange markets following his statements. He and President Barack Obama shortly afterwards backtracked Geithner's comments.
https://en.wikipedia.org/wiki/Bancor#Proposed_revival
I'm beginning to see a pattern of which country is blocking any progress here.
Anyway, the Dutch should then make a law that demands WTO status or smth. As this is NOT nicely applying rule of law.
I think China is complaining about changing the rules retrospectively when they become successful in a field. But I’m not following how this is any different than French subsidies or limitations on farming products from Ukraine.
If they’re abusing the system, which I presume we all can agree that they do, why don’t we force them to play by the rules, or do we not like losing so we keep changing the rules when somebody else starts to win.
Again, I wouldn’t allow such vital industries from medical equipments to military tech to be outsourced to this level. It was silly to begin with.
Tesla was the first to buck this trend.
By "finding a partner" you actually mean have Azure-branded services provided by Chinese companies through isolated data centers.
Which kind of proves OPs point.
For some MS software, you need to sign an additional agreement consenting to cross-border transfer of personal data before use. But the features are the same.
Same applies to the US gov cloud regions and Apple's iCloud.
Western companies have virtually no IP in China. It gets stolen and IP rights are not enforcible - western companies basically cannot sue Chinese companies. Chinese companies can enforce their IP against western companies, who have to surrender theirs to access the Chinese market. The system is completely rigged in China's favour.
The only way to level that playing field is for western nations to do the same: Let their domestic companies freely steal Chinese IP and selectively enforce IP rights, as China does.
> The only way to level that playing field is for western nations to do the same: Let their domestic companies freely steal Chinese IP and selectively enforce IP rights, as China does.
China literally just gives it away for free. They are the top supplier of open source LLMs.
The answer I heard at the time was to get local suppliers and workforce up to Tesla standards.
It appears to have worked out for China quite nicely.
Chinese Teslas had higher standards early on, panels aligned and such.
And the west always said that China is bad for doing it.
That’s the irony part.
So now Europe are doing the same thing.
Not really. Everyone was extending courtesies to China, but China opted to unilaterally reject the notion thay others could receive the same benefits they were enjoying. Now you're seeing this sort of courtesies being pulled for the first time. And you opt to frame this as hipocricy?
I think the question is: did China ever took over a foreign company because "national security" or whatever perceived risk?
Even those 'local partnerships' in China were not above board - they existed to steal the intellectual property from the partnered Western company.
It seems the only thing that can be nailed down are 'consumer brands' which are difficult to duplicate.
[1] https://www.planetizen.com/node/47241
At least in the context of trade over the last 35 years, there has been an imbalance.
As for 'Arbitrary Rules' - it's a fair claim and the US, EU etc. need to establish clear and fair terms. So should China, India, Brazil, everywhere else.
If, for instance, we call out China for surveillance of their citizens and then start doing the same, isn‘t that ironic?
This is not the same as surveillance, that's internal affairs. This is external affairs.
"The west" criticizes China because the ruling regime imposes a series of arbitrary restrictions to foreign companies, including outright banning them, while demanding that Chinese companies should have unrestricted access to foreign markets.
You are now faced with an exceptionally rare event where a member of "the west" enforces restrictions that are similar to the ones China broadly imposes on foreign companies, but does so on an isolated incident. And you call that irony.
Beware of the beginnings.
Why do you presume this is bad?
If it’s bad why doing it?
We would like for western companies to be able to operate in China the way we let Chinese companies operate in our nations, but since China don't want to reciprocate and want to play an unfair game, the only real option is to level the playing field - if China wants to make the rules, lets take those rules and apply them domestically to. We should:
* Require Chinese companies to have a domestic partner.
* Selectively enforce (or rather ignore) IP when infringing on Chinese IP.
* Force IP transfer as a condition to access our markets.
* Require Chinese visitors to tell the police where they're living.
* Many more policies which are unfavourable to the Chinese.
China, chief hypocrite, will of course complain about anything which discriminates against China abroad, while doing exactly that thing at home.
No; the restrictions the West places on Chinese companies are not remotely comparable in proportionality or form.
But worse - China does not just have the opportunity to operate in the West in an asymmetrical fashion, but they're fairly aggressively openly stealing intellectual property etc., not just as a matter of 'national security' but as a matter of normal business operations.
The Chinese government operates police stations in foreign countries to surveille and oppress local citizens of the Chinese diaspora, and to coordinate activities.
There are always geopolitical shenanigans, but the West acted in roughly good faith inviting China into the WTO and was happy to play by some reasonable set of rules.
It's fair to use the label 'hypocritical' for what seems like arbitrary action in the West, but it's not truly arbitrary because it's a reaction to what was lack of good faith at least on the terms that were understood, and the term 'hypocritical' could be used tenfold in the other direction.
Also - even if everyone was playing roughly fair according to their own competitive advantages, the imbalances in some areas would be so problematic that there would have be some kind of reckoning anyhow.
The terms need to be reset, capital flows need to be adjusted, the USD cannot maintain such a high ranking position if they don't want to import, vast offshore tax shelters need to be shut down. Dubai is 'Mos Eisley' on Tatooine it's really just bad money.
The US did the same when it was young, along with large instances of exfiltrating tech (Samuel Slater, kicked off the American industrial revolution).
This is one of the most persistent misunderstandings about China.
China had a closed, planned economy. It began opening up to foreign investment in the 1980s, but not all at once in every sector. China's general approach has been gradual, instead of the "shock therapy" that the ex-Soviet Union went through (which destroyed its economy).
China initially allowed foreign investment in certain sectors, with conditions like involvement of a local joint-venture partner. An example of this was Volkswagen building a factory in Shanghai in 1984, with the Chinese company SAIC as a local partner with 50% ownership.
Over time, the number of sectors that are open to foreign investment has increased (most sectors are now open), and the rules on investment have been loosened. For example, joint-venture requirements in the automotive sector were phased out and completely eliminated by 2022. Tesla completely owns its operations in China. Toyota has announced that it is buying out its JV partner. Other Western automotive manufacturers have taken majority stakes in their operations.
China has been moving towards more openness to foreign investment over time, not less. It does have policies like "Made in China 2025" that are intended to move up the value chain, and avoid getting stuck making low-value plastic toys forever. China wants to be like the US and EU, after all - a developed economy that manufactures lots of high-tech goods.
After they lost most of those same foreign investors that got tired of handing over their IP, the "local partnering" (what often resulted in state/court backed judgements against the foreign investors), ...
The disasters "wolf warrior" politics, combined with the above mentioned issues. And the stringent monetary policies limitation on moving money out of China did not help (translation: We want you to put money in, not being able to pull it out).
This has resulted in a reduction of foreign investment by almost 70% (given the 15 year average). What used to be easily be 200 a 250B investments per year, has now dropped to barely 100B, and is still declining.
The European and American car manufacturers, for example, never lost their considerable competitive edge over their Chinese rivals. In the end, it was an entirely different technology - electric cars - that allowed the Chinese to leap-frog the legacy car manufacturers, and not because of IP sharing, but because of Chinese R&D in battery technology.
> This has resulted in a reduction of foreign investment by almost 70% (given the 15 year average). What used to be easily be 200 a 250B investments per year, has now dropped to barely 100B, and is still declining.
Foreign investment in China peaked in 2022. The reasons for the decline are cyclical (not just because of China's internal economic situation, but because of international factors like the hike in US Federal Funds Target Rate since 2022), not because China suddenly started demanding IP sharing or suddenly changed its currency rules in 2022 (none of which happened).
What a nice exercise in public relations.
Foreign investment was already in a down trend from 2013, investment kept somewhat stable in the 2015-2019 periode. Until a little unknown virus hit the world, resulting in a total shutdown / disrupted market.
There was a peak in 2021 as of the resulting reopening of the Chinese market, you know, kind of hard to do business when your companies employees need to spend a month in a hotel in quarantine. So there was a strong recovery in those years, a known effect from the 2020 pandemic and the eventual recovery.
I do not even know where you get the peak in 2022 when it was 2021. 2022 was barely on the level of te 2015-2019 periode. In 2023 it ended up crashing to 1990's level of investment.
And has been a negative FDI for the past 3 years. That means more investment is being pulled out of the country, not in anymore.
So unless you want to dispute macroeconomic data, your information is highly off. I am not even going to touch the whole IP comment "massively overblown" as there are plenty of reports on how it absolute not overblown.
No offense but your comments read like a propagandist. I let the readers make up their minds, as my information can be easily google on.
You're just wrong about this, as you can see by looking at a chart of FDI into China: [0]. The story from 2013 to now is not "downward trend." 2013 was a peak year. Then FDI declined through 2017, before generally increasing until 2021, when it reached its all-time peak. You're right that I got the year wrong: the peak was in 2021, not 2022. But the story you've told of there being a steady decline since 2013, due to foreign companies not wanting to share IP, is just completely disproven by the chart. It also doesn't make sense based on how Chinese IP sharing policies have changed over time - they have been rolled back in the last decade, not increased.
There have been huge changes in the world economic outlook and in financial policy since 2022. The US ended the zero-interest-rate policy in 2022, which has huge implications for global monetary flows.
> No offense but your comments read like a propagandist. I let the readers make up their minds, as my information can be easily google on.
Yes, readers can Google it (or look at the World Bank data below) and see that the story you're telling is just plain wrong. People in the US are exposed to such a crazy level of constant fear mongering about China that any kind of moderating comments are seen as propaganda.
0. https://data.worldbank.org/indicator/BX.KLT.DINV.CD.WD?locat...
You can’t socialize losses and privatize gains.
Yes, yes, and yes.
We kept doing this, a bank or company stretches too much after making record profits, and then cries for federal funding and free money.
The federal reserve is a lender of last resort and they shouldn’t have given that much money without any collateral etc. Even if they just kept the stock and then sold it afterwards, we wouldn’t be in this much debt. We spend trillions covering private losses, this was plain stupid.
The Fed only lends against collateral.
Hold on, the logic is any country that socialises anything to any degree is communist? Where the hell did you get that from?
OP [1] is the first person to make the argument that socialising anything implies communism in this thread. The entire shtick is a straw man. It doesn't need to be argued if it's only brought up by the side tearing it down.
Except they’re not. They’re only mis-used in this thread by those claiming they’re mis-used.
Great forward-looking concept. Terrible ex post facto. The precedent set is that the government can demand equity for past favours at any time.
Also, now that the U.S. owns a stake in Intel, where does that leave competitors? We're already seeing a push to force AMD and Intel to merge [1].
[1] https://www.tomsguide.com/tech/us-government-considering-cas...
Companies do this all the time though.
For example, here in Louisiana the utility companies do this. After a major hurricane, Entergy will fix and upgrade tons of infrastructure and then get to tack on a +$15.00/m on to your utility bill for the next 5 to 10 years to recoup the costs all while they are making millions in profits each year.
Why pay for it themselves when they can just force the public to do it.
Stay quiet.
So, my thinking is that there could be less patents, because they’re less likely to share the technology and patents might let others copy stuff.
Which iPhone?
https://www.gsmarena.com/apple_iphone-pictures-1827.php
https://www.gsmarena.com/samsung_i9000_galaxy_s-pictures-311...
Samsung was the original manufacturing partner for Apple, which allowed them to amass incredible amount of knowhow to create their own, and before that they were not even in the phone market much, yet alone launch their own phone.
Samsung was just better at marketing and other business aspects.
> and before that [Apple] were not even in the phone market much, yet alone launch their own phone.
This applies to Apple, too. Samsung learned how to make them. As did HTC, Sony, Huawei, Xiaomi, Oppo, OnePlus, etc, etc. Turns out, making smartphones is a very competitive business, but a lot of companies were good at it, at least for periods of time.
But I don't think the other players want that order to live forever, so we will see. I just hope we don't get WW3, and that's good enough for me.
We live in a "Rules Based Order" - one rule for thee, another one for me.
Early America had no regard for intellectual property rights because all the good media came from abroad - then we built Hollywood and saw the light. The west pushes deregulation and free trade because we've got the money and the only thing that can keep us from sucking a market dry is government intervention. The Dutch just seized a company because a geopolitical opponent was using it to exercise leverage, which is also how TikTok became a sub-brand of Oracle.
Nation states will use whatever words are necessary to justify their actions, but the game is and always has been power, leverage, and interest. Given the rise of China, I'm guessing we're going to get a lot more opportunities to tut and shake our heads about how hypocritical western governments turn out to be with regards to national economic interests.
(And, to be clear, I'm not saying this is like it's a good thing. I'm not a government, I'm a person, so all I get is the pointy end of all this happy rhetoric.)
I don't think this is the epiphany you think it represents. The whole point of laws and regulations is to protect interests.
Do you think that any regime passes and enforces laws that are detrimental to their best interests?
In free market economies, laws and regulations are put in place to foster competition, and antitrust legislation is in place to prevent anticompetitive practices. However, laws and regulations are also in place to prevent strategic interests from being captured or even threatened. The motivation is rather obvious and to the point. Where is this window dressing you speak of?
> Nation states will use whatever words are necessary to justify their actions, but the game is and always has been power, leverage, and interest.
Your post shows some degree of confusion, specially by the way you imply inconsistencies. There are none, and the whole point is rather on the nose. Internal competition and level playing fields are promoted as they pressure companies to improve their competitiveness. "Competitiveness" is the operating principle. Having a rival third-party perform an action that threatens your competitiveness is obviously not acceptable.
And yet the sale was allowed - 7 years ago - and only voided now under cloak and dagger, via a never-before used law. The window dressing is the entire "international rules based order" we hear so much about. If it's all just interests, then you can't complain about Russia invading Ukraine, Israel annexing land from various neighbors, China taking Taiwan and seizing TSMC, etc.
Having a rival third-party perform an action that threatens your competitiveness is obviously not acceptable.
And yet that being acceptable is the entire basis of the free market system. So yes I'm just whistling past the graveyard, but the hypocrisy is real and there should be no crying about principles later. The embrace of "the strong do as they will and the weak suffer as they must" - just as the west's relative strength is at its lowest ebb in perhaps hundreds of years - is at the the very least a bold strategy, Cotton. Let's see if it pays off.
Now, we're in an era of petty self interest, in which no one trusts anyone else, international institutions and laws carry no weight, and everyone is poorer and less safe in the long run.
"Window dressing" from the cited comment isn't about the existence of law, it's about the story told to legitimate a choice already made on interest grounds. When a principle helps the home coalition's position, it's foregrounded, when it threatens it, it's narrowed, reinterpreted, suspended etc. The principle is the sales pitch and the selection and timing are about power.
Countries push openness most intensely in sectors where their firms can penetrate foreign markets (finance in the 1990s, software/IP heavy goods in the 2000s etc). Because openness abroad protects their capital, openness at home is celebrated until it starts eroding strategic capacity. Then come security reviews, export controls, local content rules, subsidies etc and everything is wrapped in principled language.
> Internal competition and level playing fields are promoted as they pressure companies to improve their competitiveness.
Until internal competition threatens a national champion in a strategic race. Then we let consolidation happen (or subsidize it) and call it "industrial policy". We laud the disciplining function of foreign competition until the foreign rival is big enough to discipline us, then it's "unfair trade", "security risk", "systemic rivalry" etc
For decades, openness to China was "win win globalization". As China's capability rose, the same flows (capital, tech, data etc) got relabeled as channels of leverage. Now we create controls, seizures/forced restructurings and targeted decoupling justified by a different principle than yesterday's.
So basically your "policy serves interests" is a truism that ignores the commenter's claim about how principles are instrumentalized. I mean free markets, antitrust, IP, security, sovereignty etc aren't a tight contradiction free doctrine. States pick the item that best advances leverage at that moment and explain it with whatever noble language fits. It's a realistic description of how advanced economies behave when the balance of advantage shifts.
The west and the US specifically has operated on an open market policy partly as a result of two world wars we got dragged into in relatively short order. Economic integration was thought to reduce the likelihood of another great war.
However what we have currently is a relatively developed economy (China) using currency manipulation and protective policies to prop up their own economy long after it has passed out of the "developing" phase. Plus massive and ongoing state investment and debt deferral. China effectively subsidizes massive amounts of economic activity that makes any US or EU tax breaks / protective policies look like chump change.
When you have such a large market participant behaving that way it is little wonder that people lose their faith in free markets and want to intervene. Including doing explicitly punitive things against China. It is an attitude of China's own making. After all... China will not allow you to buy a freakin' popsicle stand as a foreigner let alone a shipbuilding company or anything else.
China wants all the access to the rest of the world and wants everyone to buy their products... but they do not want to reciprocate.
There's a history with the West where they have been manipulated and taken advantage of in a way that the US never has.
It's possible their desire to force companies into partnerships is genuinely based on a fear of that happening again.
You say that China wants everyone to buy their products. There's also the implication that this is bad for the US economically. However China wouldn't benefit if their customers are poor.
That's definitely possible but I think the cause is much simpler: initially they wanted to bootstrap their own industries and now nothing forces them to do anything different so they just continue with hyper-protectionist policies.
On the side of the west: Outsourcing to China is the new group-think. The new "No one ever got fired for buying IBM" for the MBAs. A box of Bandaids now says "made in china" on it. Bandaids are churned out entirely by machine. Packed entirely by machine. Boxed entirely by machine. By the millions per day. Human labor input is more or less irrelevant. Why outsource that to China? Because that's the only thing management knows how to do and the only thing so-called investors understand. It certainly isn't to save money or make the product better.
> However China wouldn't benefit if their customers are poor.
If I had a nickel for every time a government or leader adopts bad policies despite the obvious future negative consequences I'd be the world's richest person.
>If I had a nickel for every time a government or leader adopts bad policies despite the obvious future negative consequences I'd be the world's richest person.
This is everyone. The voters are at fault as well because sometimes they support those that create short term wins over the long term.
For outsourcing politicians beliefs that the US workforce would become the white collar workers of the the world which is true would increase the quality of working life.
The motive for recent boat bombings is supposedly stopping illegal drugs. Though IMO it has more to do with distracting from the release of certain human trafficking records. This US administration seems bent entirely to the will and ego of one person.
(Which isn't to say the US has clean hands. Our list of attempted coups in South America is long.)
People voted for Chavez and then (at least once) for Maduro because the massive inequality was unsustainable. If the US had accepted that and worked with them instead of against them, maybe we'd be in a different place right now. But the interests of oil companies always come first, sadly. (obviously this does not absolve the Venezuelans from their responsibilities.)
We’ve recently seen a major reversal on China in particular, because it has dawned on people they were being played, not that they were the player.
But they did it.
That's rich, coming from a country which outright bands foreign corporations from even operating within their borders, and those who they allow have to operate through a state-controlled corporate minder.
What country do you know Globalnode is coming from? Just interested in the high level of assurance.
on edit: thanks for pointing it out.
China is nothing like your paranoid fantasy.
- Certain industries are restricted or prohibited for foreign investors.
- The “Negative List for Foreign Investment” explicitly bans or limits foreign participation in many areas (e.g., media, education, data services, telecoms, mining). - Some sectors require a Chinese joint venture (you can’t have 100% ownership).
So even though the law allows foreign entry, policy barriers and regulatory discretion make it hard in practice.
To use your example of Volkswagen, their ownership in China is structured around several joint ventures, where it shares ownership with Chinese companies like SAIC Motor, FAW Group, and JAC Group. https://en.wikipedia.org/wiki/SAIC_Volkswagen
That's a very good for them, by looking at the list. Look at how big a problem the EU now has with its reliance on US tech and military. Sovereignty is very important in strategic industries and in those that allow foreign powers to influence your population.
> of use your example of Volkswagen, their ownership in China is structured around several joint ventures
Volkswagen is a cherry picked example, look at Tesla, which isn't a joint venture. BMW still uses a JV but now holds 75% of BMW Brilliance etc. And it's no longer required for car companies to use joint ventures, that rule was lifted in one of the recent years and more industries were actually opened in the same time.
No cherry picking. Purely random. FWIW, according to my quick research there are only 3 vehicle manufacturers that operate and manufacture in China while retaining 100% ownership as a foreign company. They are Tesla (Gigafactory in Shanghai), Lexus (EV plant in Shanghai), and Scania (truck manuf. in Rugao). If this list is comprehensive, then it is very very short, and my original point stands which is that technically the market might be open (barring the exceptions I mentioned), but in practice it is pretty closed because it is so hard to enter due to all the barriers that are put up.
I think it is fair to say, and I think you would agree, that on a spectrum of free trade, China doesn't rank very high.
BMW example I mentioned is an example of exercising that choice, it lifted its stake in BMW Brilliance from 50% to 75% once the rules changed. And Tesla ias wholly owned in Shanghai (enabled by the 2018 NEV opening). That's precisely the point I made, it wasn't an "exception" as you framed it, to a still binding rule, it was an early use of the liberalization.
So since 2022 ownership is a strategic choice for these companies. Many legacy JVs remain not because they don't have a choice but because of scale, supply chain integration, dealer networks, local partners assets etc, so on other words it works for them like this better, but any OEM with the capital can take majority or go 100% (as BMW did and as Tesla/Scania/Lexus show).
Saying "technically the market might be open ... but in practice it is pretty closed" doesn't hold up to the post 2022 facts.
The capitalist propaganda, "freedom", is so ingrained that we cannot easily paddle back on it. So we will become helplessly hypocritical instead.
perhaps the US is doing that for other reasons (RFK Jr.) but the good news is that in the post US hegemonic order, that country can go ahead and collapse into flames and the rest of the world won't be taken down with it.
For me consumerism seems much worse than free trade. Buying clothes and use it once, change the car each year or other similar behaviors seem unsustainable because nobody cares about the generated garbage or the energy/material requirements.
Sure, now in some countries we can associate free trade with consumerism, but it's not everywhere the same.
I don't believe in putting the responsibility on individuals. Billions upon billions of whatever currency are being poured into ads, marketing, influencing, lobbying, propaganda (and whatever other manipulation mechanism I'm not thinking of), employing some of the most brilliant mind of this generation, to ensure that individuals are consumerist. Because that's what will make companies the most money, and "making more money" is the only incentive this society has in place.
Show me the incentive and I show you the outcome: the outcome is enormous externalities. We need to fix the incentives, not expect individuals to somehow act against them en masse.
> "making more money" is the only incentive this society has in place
Which society? I lived in 3 different societies (more than a couple of years), and while it is true that money is one of the incentive I think there were fundamental differences that were not obvious about what makes people tick. And by looking at the political situation around the globe - my impression that people care about many more things than their bank account.
That does not mean I propose specific solutions, I am just very skeptical that without free trade things will be better on average for more people than without, if anything is just a red herring so that nobody deals with the more complex issues.
Isolationism sucks. You have a domestic industry but it's not allowed to sell to other countries in retaliation for you doing the same to them, so it's small and consolidated and when the domestic providers are correspondingly terrible the trade barriers inhibit you from using the foreign ones.
"Free Trade" (but not actually) is even worse, because you take down your own trade barriers nominally in exchange for others doing the same, and then some of them don't. They subsidize their industries so that the global industry consolidates into one country and then if that country sucks you're in even worse shape because it's also a single point of failure and subject to foreign political forces.
What we should be doing isn't going back to trade barriers, it's creating sufficient tax incentives to sustain a domestic industry for strategically important products and then letting other countries do the same and consumers choose which company they want to buy it from. Because then you don't have trade barriers but you do have both domestic production and competition.
The price is that companies in those industries would essentially be paying lower taxes than they currently do or receiving some subsidies in order to make them competitive with the other countries doing something equivalent. But maybe that's not the worst of the three options.
Trade happens because not a single country has or can produce all the (strategically important) products it wants, without trading with others.
The US can internally produce: food staples, fossil fuels and nuclear fuel, most (but not all) industrial chemicals and construction material, defense systems and major military equipment, generic drugs and many medical devices.
However, vulnerabilities exist in: semiconductors, rare earth minerals, speciality chemicals and pharmaceutical raw materials.
Even if the EU were a country, it has high self-sufficiency for: temperature agriculture, industrial chemicals, some aerospace and defense components. However, it is import dependent for: energy, specialty metals and rare earths, pharmaceuticals, high-tech electronics and semiconductors.
Lastly, what about the remaining 167 countries in the world (195 - US - EU)? 90% of the world's population live outside the US and EU.
Trade is really really important for human flourishing.
The US used to produce nearly all of those things and would benefit from having the industrial capacity to process rare earths even if some of the mining happens in Brazil or India or Australia.
> Lastly, what about the remaining 167 countries in the world (195 - US - EU)? 90% of the world's population live outside the US and EU.
They would then have the option to buy any of them from the US, the EU or China instead of having only one of those monopolize global production.
>Trade happens because not a single country has or can produce all the (strategically important) products it wants,
This is an interesting claim. What if instead, a single country could produce all the products it wants and needs, but that doing so would be less lucrative for a certain subset of the population that can take advantage of trade? In such a case, that single country might fail to do so and import a bunch of crap anyway, don't you think?
If you only provide subsidies then consumer prices go down rather than up because the mechanism of operation is for the subsidies to make the domestic supplier more attractive rather than for tariffs to make foreign suppliers less attractive. Meanwhile the subsidy is paid by the government and then the legislators will be trying to keep it down rather than raise it because it reduces the money they have to spend on other things rather than increasing tariffs which do the opposite.
Russia has nationalised a number of Western companies since 2022, even McDonalds.
Nothing happened.
The problem with China is that the "free access" was always one-sided as we did not insist on reciprocity - not for the Internet, not for tourism, not for companies, not for goods.
We gave China everything - we allowed their people to study at our universities, we allowed their tourists, we gave them virtually full access to our economic market, we gave them access to the Internet, we gave them seriously discounted shipping rates and customs exemptions.
And look where that got us. They lock in their population in a way reminding me of the GDR/Stasi era - if you're not an obedient citizen, you don't get permission to travel, everything is subject to surveillance and the one will of the Party -, they use their access to the Internet to steal, hack and run secret police organizations while locking their population behind the Great Firewall, they buy up our companies and shift crucial knowledge back to China. And in the meanwhile, good paying jobs in our countries were lost en masse to China, what used to be high-quality products that would last many years if not decades got replaced by China made ultra cheap junk.
Personally, I'd rather pay extra for high quality goods made ethically than some planned obsolescence or plastic garbage.
Nitpicking a little, but the Chinese also make high quality stuff. It is not advertised as much though.
One might be tempted to say that offshoring the manufacturing pollution was the point - the Silicon Valley is the US' top Superfund site for a reason [1]. Now it's not Western countries that get to deal with the legacy of a few decades of exploitative capitalism, it's China, Taiwan and India which are out of sight, out of mind to us.
> Personally, I'd rather pay extra for high quality goods made ethically than some planned obsolescence or plastic garbage.
Indeed but that's a niche market which means R&D costs alone make products so much more expensive that it's basically impossible to compete... and for the stuff that is made domestically, manufacturers love to go for "planned obsolescence" and other strategies to turn consumer spending into recurring revenue - always remember BMW and subscription seat heaters.
[1] https://www.theatlantic.com/technology/archive/2019/09/silic...
> We gave China everything - we allowed their people to study at our universities, we allowed their tourists, we gave them virtually full access to our economic market, we gave them access to the Internet, we gave them seriously discounted shipping rates and customs exemptions.
Lol, when you have to convince people that working in services instead of manufacturing is the future, that's what you get. Mindset is also a big issue, I know enough people who played the Erasmus game and graduated in double the normal time just by coasting that I think it's just normal at this point. And the problem with this spiral is that it just compounds, Europe is shifting to a continent of pensionists, highly educated people that live with their parents til their 40s and nepobabies playing airbnb landlords.
IMHO it's both. It did make sense to introduce China to the Western markets, even leaving the MBA BS aside, just out of moral fairness. It was the right thing to do ethically, the execution was just fucked up - in no small part as you say due to the rise of neoliberalism.
> Lol, when you have to convince people that working in services instead of manufacturing is the future, that's what you get.
Yup. The problem with anything manufacturing is the associated pollution, energy usage and the healthcare costs from dealing with old-aged former physical laborers... we shifted all of that to China.
> Europe is shifting to a continent of pensionists, highly educated people that live with their parents til their 40s
Not by choice though. The problem is that real estate markets are fucked over, in the hot markets where the jobs are, even as a gay DINK couple (aka landlord's dream - two full time incomes and a very low chance of them adopting a child which makes noise and causes complaints from other renters) you don't stand a chance.
I'm impressed by their generosity (whoever you're referring to as "we"). Did they also allow the Chinese to win Math Olympiad trophies at some point?
So it is true that the Western first world aligned countries have greater access to each others assets. And there is a dark network at play at trying to limit the same to second world and third world nations.
Here is an example how China raided and took over Chinese ARM subsidiary, along with all stolen western IP.
https://newsletter.semianalysis.com/p/the-semiconductor-heis...
It’s a continuation of recent trends and closing markets.
Nobody in their sane mind would allow a company like ASML or the likes to be purchased by competitors.
But the irony is that when a non-European entity were to do something like this, e.g. nationalize their oil or mining etc. industry or a firm, the whole hell would brake loose.