[amou234]

> The future of Chinese tech belongs to companies that are much more fast moving

Not at all. The future of Chinese tech is state owned enterprises [1]. Just like other Chinese industries, such as state owned real estates [2] or state run communal restaurants [3]. Just like Soviet Union, before it fell.

"The Peterson Institute for International Economics analyzed the market capitalization of China's top 100 companies. It found that the share of total market capitalization held by state-controlled enterprises, in which the government holds a stake of 50% or more, rose to 50% by the end of 2023, the highest proportion in five years"

[1] China's favored state-owned companies squeeze private sector https://asia.nikkei.com/Business/Markets/China-s-favored-sta... [2] https://www.reuters.com/world/china/chinas-state-owned-devel... [3] https://www.thinkchina.sg/not-everything-has-be-run-state-th...

[rtpg]

Aren't you presenting a false dichotomy here? Perhaps they are having their cake and eating it too, so to speak. Not to comment on the supposed economic malaise of the moment.

Sometimes state-owned enterprises might be able to outperform a private structure!

[realusername]

> Sometimes state-owned enterprises might be able to outperform a private structure!

They can ... until they don't and there's no market correction in place anymore to keep them in check.

It's going to take another decade to feel this effect but it'll be there in full force.

[temporarely]

This is sound analysis sans ideological bs. The system lacks a self-correction mechanism.

The profit driven system is supposed to self-correct. We see this today, with Boeing for example (yes /s).

Now beyond snark, we can ask is the same thing happening to us that happened to the "commies" with the 'defense and national security' establishment raising troubling doppelgangers of "state industry" from the body of "market driven" neo-liberal capitalist societies?

So, we see issue is not really "ownership" but rather establishments ..

[edmundsauto]

In fairness, there is a good chance Boeing is self-correcting now. After deaths and lawsuits. If it were a governmental entity, it’s plausible that would not happen and the company would continue as before.

At least that’s the idea, I think. May as well steel man the argument.

[lazide]

Eh, Boeing is a defacto state owned enterprise. Check out their board composition if you don’t believe me.

Or are you more complaining about the lack of honesty in these defacto situations?

In China, any company larger than a tiny one is state controlled anyway - someone from the CCP needs to have a board seat, and everyone knows what happens if you anger the party.

[dav43]

State owned enterprises will outperform private in this environment when there is no option to compete as a private structure

[refurb]

Considering the the stated goals of the Chinese government and past actions, I can’t see how anyone would consider the state owning a major share of a Chinese company to be either a net negative or neutral at best.

[logicchains]

>Sometimes state-owned enterprises might be able to outperform a private structure!

But it's extremely unlikely, given how often the opposite occurs instead in historical data.

[coldtea]

How often does it really occur? In historical data, not in "free market" ideological narratives...

[mensetmanusman]

When you are subsidized by a billion tax payers, you better beat the private sector!

The more important question is if it is worth it, since money spent is zero sum.

[coldtea]

It's not "zero sum" if you have exports...

Also, we could use more zero sum that redistributes wealth towards huge masses, even if that means some billionaires will have fewer billions...

[amou234]

It's a bit hilarious that there are attempts to convince people on a board for hackers and startup founders that state owned enterprises are great and amazing!!

[rtpg]

I think it’s good to be clear headed and acknowledge empirical evidence when it’s there. Context is useful in understanding the mechanisms of society!

“This thing goes against my orthodoxy therefore I refuse to see it” is exactly the sort of attitude that gets you far away from success.

For the record, I was merely saying it’s possible for a state owned enterprise to do things quickly, even if in practice most of them don’t. So much of the world is just about having the right kind of people at the right place, and that’s true in the public sphere and the private one.

[amou234]

Sure, then by all means share your evidence or data for a successful state owned enterprise vs private enterprises

[rtpg]

I mean the topic of this thread is basically on how we have a bunch of well performing, pretty fast Chinese companies. This is happening despite these companies having a lot of buy-in from the state (down to outright ownership).

One might start trying to say "well a bunch of money from the state isn't enough to consider it a state owned enterprise", but then the contention is a bit more specific than just about being state owned.

[obsoletehippo]

I invite you to share your evidence that all private enterprises are strictly superior to any state owned enterprises, as that is clearly the stronger (and less likely to be valid) position.

[coldtea]

It shouldn't take much effort, the results speak for themselves...

We did get to the moon with "state owned enterprises" anyway...

[amou234]

no profits involved in the moon effort, was not competing with any private enterprise at that time

[Teever]

Believe it or not but not everyone shares your enthusiasm towards the idea of privatizing United States Postal Service.

[refurb]

The idea? It’s already a private corporation.

[stefanfisk]

Read the first line: https://en.m.wikipedia.org/wiki/United_States_Postal_Service

[refurb]

There you go.

For some reason I thought it was a quasi-private company owned partially by the government.

[redserk]

Well, this is a forum where some degree of openmindedness is encouraged.

There have been far many more economic and capital systems on this rock than just American capitalism.

[wil421]

I used to think it’s open mindedness but I think it’s more hubris.

The other day a guy was complaining about being in jail for a time and how unfair it was that he had a criminal record. Lots of open minded people praising him.

Then a new user called him out for trying to get with a 12 year old. Yikes.

[redserk]

Regardless, China figured out some formula that has been incredibly successful the last couple decades. While I have doubts about this approach being sustainable, hindsight is 20/20 and we can’t predict the future.

[qwerasdf5]

The "formula" was capitalism, introduced by Deng Xiaoping, which lifted hundreds of millions of Chinese out of poverty.

However, Deng also introduced China's 1-child policy (decidedly not capitalism), which is now beginning to seriously strain the system. The future is indeed uncertain.

[amou234]

Sure, then by all means share your evidence or data for a successful foreign state owned enterprise vs private enterprises in that country and other countries

[jonnybgood]

Aramco

[nickff]

Aramco’s not a perfect example, as it was built up as a private corporation, and only nationalized as a relatively mature corporation. It also has a state-sanctioned monopoly on a very low-cost, high-price commodity. On the other hand and to be fair to Aramco, the Venezuelans managed to make a mess of their state oil monopoly.

[nebula8804]

I don't know man, from the outside looking in it seems like despite this arrangement, the people doing the day to day work are fiercely competitive and they want it all. This is just an anecdote but I have seen talks where the Chinese look at the silicon valley grind culture of long working hours and sacrifice and think how can these people be so lazy?

Maybe state ownership will collapse it all, maybe the coming demographic implosion will do it. But it does not seem like your daddy's communism....more like a capitalism-communism fusion that combined with nationalistic pride and a desperation to account for all the over production might lead to surpassing what the soviet union could only dream of.

[kurthr]

Check out a couple of phrases on Chinese media (they are heavily censored): tang ping (躺平) bailan (摆爛)

If you just want English language go for SCMP: https://www.scmp.com/yp/discover/lifestyle/article/3194858/l...

The money has already been made by those in power and the only way to make more is to follow the government gravy train. For the last decade that has meant batteries, EVs, semiconductors, displays are all so heavily subsidized (factories are built with free government loans) that doing anything else (other than buying property) makes no sense. That doesn't mean the people aren't motivated, smart, and ingenious, but they won't be making back the $T in loans.

[nebula8804]

The lie flat movement is a legitimate movement that touches upon the same problems the youth are experiencing elsewhere around the world but it appears to be a fizzling movement everywhere. Even the US equivalent of quiet quitting and utter hopelessness is waning in the US with the slow demise of the far left and right.

[squigz]

> Even the US equivalent of quiet quitting and utter hopelessness is waning in the US with the slow demise of the far left and right.

This is all news to me.

[nebula8804]

Its easy to see this in the US. Ignore the news and Twitter and look at results. This election cycle Justice Democrats: the poster child of the progressive left has no choice but to just defend their existing seats having already lost one and some of their top stars nearly losing their seats last cycle.

Ignoring the age issue in the far right (not enough young people replacing the dying elders in the movement), we have repeated losses in special elections due to their stance on abortion indicating their current plan of action is not in sync with where the country is. That does not look long term promising for the movement. Either they move left or they will continue to cede power at all levels of the government.

[nindalf]

No one doubts that Chinese people work incredibly long hours. They do so because there’s been a strong link between input and output. The harder you work, the wealthier you get. That has been incredibly motivating … so far. In an economy that isn’t growing quite so fast, people might not see the same returns for their labour that they did between 2001-19. They might not work as hard.

That’s speculation though. What we do know is that the CCP is changing the way of managing the economy. Between 1992 and 2019 they leaned heavily on the private sector for growth. They would do anything they needed to help private enterprise succeed. That approach paid rich dividends, it’s obvious.

Xi Jinping is going a different way now though. He reckons he knows better than Deng, the architect of the Chinese economic miracle. His approach is to pick winners and losers. It may succeed because he’s picked good horses so far - EVs, solar panels, AI, semiconductors. And state led capitalism has had success in China, with major players like Huawei doing well despite major headwinds.

Because of this shift in approach you can’t extrapolate from the success of 2001-19 and say China’s future success is inevitable.

[Log_out_]

If a country were a company and Xi the CEO, would that be "ideologically kosher"?

[spaceguillotine]

there is zero link between hard work and wealth. There is a link between wealth and exploitation.

[logicchains]

If you define hard work as intellectually challenging work, there absolutely is a strong link between hard work and wealth in China. Even the corrupt bureaucrats have to pass a difficult exam to become bureaucrats.

[Log_out_]

Which one and why is cheating nepotism not as widespread as with everything else? In a company or functioning democracy in competition, if you nepotism, you kill the company..

[lazide]

Only if the person picked via nepotism isn’t competent.

Which is less likely (one would hope) than via other methods, but the correlation is not as strong as we’d all like.

[refurb]

Clearly not since even the middle class in the US holds trillions in wealth and the vast majority did it through work.

[adampk]

If you work more hours and take more overtime, you will make more money you can use to build wealth.

Seems like a clear link.

[nebula8804]

Yeah like I said it could still collapse, but I am not ready to write them off so quickly like others are, thats all.

[kiba]

This is just an anecdote but I have seen talks where the Chinese look at the silicon valley grind culture of long working hours and sacrifice and think how can these people be so lazy?

Working long hours isn't necessarily efficient.

[amou234]

Exactly. The OP didn't know any English teachers in China, or else they can verify that Chinese workers in private enterprises nap on the job/play on their phone/waste a ton of time, to get through the long working hours.

[com]

Interestingly I’ve heard this observation about American managers in US multinational businesses in Europe, that they seem to performatively do the long hours, for the sake of their own managers view of them, but that little of it is actual productive time.

I’ve not really observed it myself, and I’d suspect that part of it might be very different styles or ways of working. But maybe there’s a grain of truth there.

[nebula8804]

The output in relation to competitors is what matters in the end. At this point their results are impressive.

[refurb]

From what I’ve seen the motivation of Chinese workers is the same as any worker - to make money.

[nebula8804]

There is an argument to be made then when a country is on the rise and developing rapidly there is a sense of PMA(Positive mental attitude) among the people. Maybe you are just projecting American stagnation on Chinese?

[mharig]

You would be astonished how many people want to live a calm and good life, with making money as just one mean, and hence secondary, if you would come out of your capitalist bubble.

[refurb]

Stay on topic bro, now isn't the time for your anti-capitalist views.

We're talking about "the people doing the day to day work are fiercely competitive and they want it all".

Do you really think those people's main goal is "to live a calm and good life".

[amou234]

No state owned enterprises in the history of the world has the quality you've just described - fiercely competitive, nationalistic pride, desperation.

China is now Soviet Union, but with horrendous demographics, mind-numbing debt, and wealth flooding out of the country. China is old and broke. China is fucked.

[nebula8804]

You say that but then we see things like BYD introducing products like this.

[1]: https://www.youtube.com/watch?v=izvdO-zdlKg

Unless you want to keep your head in the sand and pretend this is the soviet union all over again, you better start paying attention to how fast they are iterating.

>China is now Soviet Union, but with horrendous demographics, mind-numbing debt, and wealth flooding out of the country. China is old and broke. China is fucked.

Yeah this is the Peter Zeihan thesis but you know what, it might take a while for this to play out and in the meantime, China may not leave the arena until after they have taken out a large chunk of the western incumbents.

[amou234]

BYD is not a Chinese state enterprise...yet. And yeah, I'm not worried.

Nio Loses $35,000 A Car. https://www.carscoops.com/2023/10/nio-loses-35000-a-car-that...

BYD lost its EV crown to Tesla after just one quarter as China’s EV market slumps https://fortune.com/asia/2024/04/03/byd-loses-ev-crown-to-te...

The EU just got a step closer to hitting Chinese EVs with additional tariffs—and may even apply them retroactively https://fortune.com/2024/03/07/eu-nears-hitting-chinese-evs-...

[nebula8804]

Ok feel free to not be worried.

I'd rather listen to Elon in this regard, this is one thing he does have experience in.

[1]:https://www.reuters.com/business/autos-transportation/tesla-...

>The EU just got a step closer to hitting Chinese EVs with additional tariffs—and may even apply them retroactively

The EU having no major tech giants to call their own has pivoted to regulation and tariffs against both China and the US.

[vikramkr]

You're really gonna take a statement from a CEO that it's important for the government to intervene in order to protect his profits at face value? Elon's made some stupid decisions in the past but I don't think he's stupid enough to be honest. Not lobbying for protectionist measures even if they aren't needed would probably be some sort of corporate malpractice.

[Turskarama]

Chinas situation is so incredibly far away from what the Soviet Union was. For one thing they aren't spending the majority of their GDP on a cold war.

[shiroiushi]

They've been massively increasing their defense spending, though you're right, it's not a majority of GDP.

In addition, they've been trying to massively increase their military capacity, but throwing money at it only does so much: you also need young men, and there's not that many that think being in the military is a great idea, and people aren't having kids any more. At least in the old Soviet Union, there was no lack of young men being raised.

[eunos]

Uhh what? Non SOE BYD kicks the buts of SOE carmakers (FAW SAIC BAIC etc).