[churchill]

>every one of them will fold within the next 3 years

The same way China has been predicted to collapse every year since 1990? No matter how much money you lose, you can grow yourself out of it. Which is why OpenAI can raise $6b at nearly $150b, despite losing $5b annually. So, why do you suggest the CPC will let BYD - their EV golden goose that has thoroughly thrashed Western competitors - to fail?

[dehugger]

Parent was fairly explicit that BYD won't be allowed to fail, but the rest don't have the same state-funded assurances.

[evantbyrne]

The idea that an economy with so much production would fully collapse is kind of far-fetched, but it also seemed like there were some major issues last I looked. Their housing bubble did burst and there have been periodic bank runs. I haven't been following Chinese news for a while now though so I couldn't tell you where things ended up.

[audunw]

Who predicted Chinas imminent collapse back then? It was certainly not a mainstream prediction.

More serious predictions have been made in recent years. And lo and behold we got Evergrande. The news since that has not been great. Some successes, and progress, yes. But also more and more deep fundamental issues brewing under the surface.

Nobody of note has claimed China will collapse over night. This is a process that spans over years if not decades.

The predictions of collapse have had demographics as its primary factor. People don’t go from 40 to 70 overnight. Yet the demographic factors are completely undeniable and its consequences bearing out year by year relentlessly.

And that is on top of a debt to GDP ratio which is utterly insane if you include shadow banking.

“CPC”, eh? Hmmm..

[jncfhnb]

No, not like that. This is a case where China has offered disgusting subsidies to anyone willing to make an EV. And therefore tons of companies have done so with no intention of ever really being a car company

[snowe2010]

Please do provide a source for these “disgusting subsidies”

[tim333]

Yeah I was thinking the number of them:

>According to Bloomberg, there were 500 Chinese electric car manufacturers in China in 2019. After fierce competition, only 100 manufacturers remained by 2023. According to Wired, as many as 300 manufacturers, both domestic and international, were offering electric vehicles in China in 2023. (wikipedia)

looks more like a capitalist free for all than a few state appointed winners. BYD got a big boost in the early days when it got investment from the US company Berkshire Hathaway, rather than the Chinese govt. Which was because Charlie Munger thought the founder seemed like a new Thomas Edison.

[jncfhnb]

The reason there were 500 manufacturers in the first place was the enormous subsidies.

The Chinese government strategy is to fund a massive number of attempts and then suffer a huge number of failures and consistent end up with far too much production capacity leading to a large number of unprofitable companies.

It’s not a terrible strategy if you can dump vehicles elsewhere. It may or may not work if you can’t.

It’s not stupid but it’s probably a bad strategy.