[roenxi]

When did China ever rely on protectionism? I'm sure they have bouts of it here and there but the overt part of their strategy has been a willingness to work hard for low wages combined with refusing to let Chinese land or companies be sold to overseas buyers. But I claim no expertise. There should be a more serious effort to figure out what China's strategy was before there is a conversation about how best to copy it. Focusing on why China succeeded is more interesting and harder to get good information about.

> ... smart people in the US can make 2-3X as much in software or finance as they can in manufacturing...

Sounds like the price of manufactured goods is unsustainably low. Prices will need to go up or a new source of cheap labour be found outside the US.

[zdragnar]

> Focusing on why China succeeded is more interesting and harder to get good information about.

It isn't that hard, really. They had a massive population in relative destitute poverty that was willing to work very hard for a small, but significant, increase in their quality of life, starting with Deng Xiaoping's market reforms through fairly recently.

The surplus of cheap labor is shrinking, and the current "made in China 2025" plan is intended to drive the growth further by shifting more portions of their economy away from foreign services and goods.

The tactics are largely the same, though: massive subsidies to local companies that disadvantages foreign ones, tacit acceptance if not outright approval of theft of trade secrets from those foreign companies that do business in China, and until recently anyway, kept the yuan pegged to the USD, meaning that it is far cheaper to buy Chinese goods than elsewhere. Now, it is tied to a basket of currencies, but held in a fixed range, so it remains intentionally undervalued.

All of this put together ensures that foreign countries will buy Chinese goods and services, and that Chinese people will also prefer to buy locally.

Think of it as a "cold" trade war. Why they were allowed in the WTO with such policies I'll never know.

[roenxi]

It is that hard - you just handwaved all the hard parts. Most of the world is effectively destitute, making <$10k/annum [0]. The vast majority are willing to work very hard for small opportunities to benefit themselves. We're only seeing pockets of economic success in Asia as people copy their neighbors policies. And Deng's reforms ... you handwaved them. What were they? How many good 50 page reports are floating around that actually go in to them? We're talking 50+ years of economic policy between Deng and today, I expect a bit more than just a few Wikipedia links on this one. Even a decade of economic policy across China is a complex subject, China is huge and diverse.

And these massive subsidies - what evidence do we really have? Massive subsidies have not worked well outside of China. What magic is happening in there that makes them effective? Pre-1970 we had a series of superpowers that were effective because they avoided massive subsidies and let failures fail. China can't even afford massive subsidies for most of the period that mattered. The US government's spending might have been bigger than the Chinese economy for a lot of that period, and the companies the US has been subsidising aren't showing any of the vigour that the Chinese ones are.

> ... theft of trade secrets...

People have been screaming from the rooftops for years that the IP edifice is going to reduce innovation in the West. The question is why we subject ourselves to that madness. The amount of cultural destruction in not allowing 1900s works to spread freely is a tragedy, let alone the impact on science and technology. So certainly in theory I agree that the Chinese are getting a leg up here, but it'd be nice to see some analysis. And the problem isn't the Chinese attitudes to IP; that is the solution.

But to emphasis "it isn't that hard" to gloss over decades of highly successful economic policy is just not true. It isn't a serious attitude. If people in leadership positions hold that attitude the situation will worsen.

[0] China's average wage is above the world average, by the way. It crossed the line recently to much rejoycing. I think that is PPP adjusted. https://ourworldindata.org/grapher/gdp-per-capita-worldbank?...

[serf]

Production in China has included benefit from the opposite side of protectionism for some time now; when most countries abide by trade laws, those that don't gain increased exposure to international markets by virtue of offering cheaper goods via production-sans-design.

China itself may not, but the production groups within China have a pretty exhaustive recent history of largely ignoring IP regulations whenever profitable, and the market response has been widely happy-to-consume.

For a single example look at the history of composite bicycle manufacturing from the 60s onward, with specific detail on the emergence of China produced composite bicycles in the 90s -- it wouldn't have gotten off the ground at all without blatant IP theft spurring the first half.

[ramblenode]

The main problem with this take is that the US and China simply have different standards and rules for IP.

China is not "ignoring IP regulations"; they have different regulations. Both the US and China are parties to the WTO and Berne Convention and cases can and have been tried. The US has won many cases against China in the WTO; it hasn't done as well making cases for IP theft and protectionism, which is notable as this is a (relatively) neutral forum.

[ImPostingOnHN]

The main problem with this take is that it fails to explain the differences and their consequences.

If the differences and consequences are the same as if China was outright ignoring IP ownership*, why does it matter that you call the ignoring "different standards"?

*- not that they aren't already

[ramblenode]

Can you point to a case that breaks both US and Chinese law? Otherwise, this conversation will be about vague generalizations.

The issue is that IP is a legal creation, so it can only be stolen if it is recognized in the first place. That said, it does not seem like differences in IP law are usually what people are referring to when talking about IP theft. That is why I brought up the WTO, which is a forum in which the US has sued China for encouraging IP theft--but most of these cases have not been won.

[ImPostingOnHN]

> The issue is that IP is a legal creation, so it can only be stolen if it is recognized in the first place

The same is true of all crimes, they are all legal creations. And from what I can tell, China has the concept of IP. They're protective of their own, for example.

It sounds, then, like you're now agreeing that the IP is being ignored, just saying it's okay because China don't want to recognize it.

If not, I will ask again:

Suppose we have 2 IP owners, and 1 has their IP ignored by China and copied, the other has their IP "considered a different standard/not recognized" by China and copied.

_What differences do the two IP owners experience?_

This is the key question I asked before, and I am asking now. What's the difference for the IP owner? I ask because it seems like you're playing with words, not substance.

[ramblenode]

I'm not sure what you are trying to argue. US law is not the same thing as international law. Of course US law, including IP standards, will not necessarily be recognized outside the US unless part of a treaty. It's similar to how the US doesn't recognize mainland China's claim over Taiwan.

That said, there are treaties covering IP that both the US and China are a party to which require certain mutual recognition. The US has sued China in the WTO for violating the IP provisions, but has not won most of those cases (AFAIK).

US companies can also sue Chinese companies in China for IP infringement and some of those cases have been won. Chinese courts tend to award much more limited damages than US courts, so US companies don't find this satisfactory. But again, that is a difference of law.

[jjoonathan]

It's no secret how export-driven development works. Trade surplus/deficits are controlled at a policy level by debt issuance/purchase. Run a surplus and your export economy will thrive. Run a deficit and your export economy will die.

Running the reserve currency requires running a deficit (others want to export their savings, so you need to import their savings). This pumps assets and dumps exports.