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by MinimalAction 7 days ago
Just looked up Chinese production capacity (~1700 GWh). That's orders of magnitude higher than the rest of the world. What did they do differently?
10 comments

> What did they do differently?

The Chinese government established and committed itself to a long-term renewable energy strategy in 1992.

And the US voted for "drill, baby, drill" in 2024.

Says a lot about the future we should be expecting and strategising for.

We've got clean, beautiful coal, though.
Something like the IRA but started years ago. They invest and subsidise and tax-incentivise in their own industry but do use competition within their own market to weed out losers.
They also accept higher environmental impacts such as anthropogenic lakes of battery waste.
Which they might very well look to neutralise in the future - humans globally need to get much much better at addressing the externalities of their consumption.
Well, a single order of magnitude... They actually prioritized strategic industries that would be useful in the future, rather than prioritizing last-generation's industries like the US did with oil and fossil fuels, which receive massive tax subsidies.

Biden's IRA changed this massively for the US, and beyond just meeting our own needs for battery production, we were on track to being highly competitive.

> we were on track to being highly competitive

Gosh, I'm sure there was a very good, some might say even the best, reason why that is no longer the case.

They have the culture and infrastructure to support manufacturing and research. Just so much stuff in one place.
A near monopoly on rare earth mineral mining and refining certainly must play a part.
It's a "near monopoly" because a bunch of engineers made a plan, stuck to it, and now have vertical integration.

There's nothing preventing others from also processing concentrates (the post physical mining product).

The mining aspect is hardly monopolised either - much is sourced from Australia, South America, etc.

Put in an order, buy a 49% share of a resource company and now you're part of the action.

Well environmental regulations prevent companies from processing rare earths at economically competitive rates in many countries. Sure they could do it, but why would anyone pay 3x as much for “clean” rare earth when you can just get the Chinese stuff?
Sure, but if anybody can truck refuse and clean sewers but only one person will actually do it, that's not really a monopoly by Kenny the toilet cleaner*, that's more like a caste system with "the unclean" over there.

I'd also point out that the US has a large land area, mapped out by the USGS (below ground structures) and is capable of creating a large shallow lake area sealed off from deeper aquifers and able to be treated with neutralising agents.

On the scale of the market for global battery production the additional costs for doing it right are not punitive and arguably fall under the "national security" umbrella that see magnitude larger shovelfuls of money going to defence and traditional fossil fuel industries.

* https://www.themoviedb.org/movie/13140-kenny

How are rare earths used in batteries?
The Chinese Communist Party was willing to invest heavily to capture the solar and battery markets early on. Obama tried to counter them, but got roundly criticized for "picking favorites" and in the end the US gave away the entire industry to China.
I wish the Democrats wholeheartedly picked favorites look at what the POS in power are doing now
They were forced to invest in new energy technology because of lack of oil/gas reserves.

The US was on course to invest more as well (I guess the reason Musk saw the opportunity in Tesla), but then fracking happened and the US became energy independent with fossil.

Add the energy industry lobbying to kill clean tech and two Trump terms.

we publish the 5 year plan and finished it... basically every time.
They have a centrally planned economy. It's almost like the Chinese communist party is indeed made up of communists.
> They have a centrally planned economy.

Pre-1978, not now.

No, most investment is still done by banks controlled by the Party whose priorities are set by Beijing.
Is that similar to the Fed system here in the US?
No. Beijing instructs Chinese banks what to invest in (e.g., AI, electrical generation infrastructure). The Fed has never done that. When there is an economic downturn, e.g., the Dot Com crash in 2001, the Fed makes it easier for US banks to borrow money. When there is a lot of investment, e.g., now with all the investment in AI, the Fed makes it harder for the banks to borrow money (because the money is not needed as much because the economy is being stimulated by all the spending by the recipients of the investments into AI). Beijing does that, too, no doubt, but again they also decide for the majority of the investment money, which parts of their economy get the investment.
It's still 1.4 billion people, 100 million party members, and a mostly capitalist economy where nobody stops you from starting a business. Decisions get made at all levels.

What's interesting is that, however you want to characterize their system, they're actually investing in a more diverse set of things than we are. Yes, AI is on the five-year plans but so are lots of other things. The US elite investors are pretty much only AI, all the time right now.

https://en.wikipedia.org/wiki/Five-year_plans_of_China

Have a chat with deep seek about the goals of the CCP. When you run local models you run socialism.

> When you run local models you run socialism.

Indeed, the American proletariat need not seize the means of production through local AI. Instead, full control of AI ought to be left in the benevolent hands of the billionaire capitalist class, and the benefits will trickle down, perhaps some time after after the 100th sponsored study into UBI (which very different from socialism)

Well, they have an industrial strategy. Not exclusive to communism, places like South Korea and Singapore managed it as well.
This attitude of denial and stuck in the past beliefs is exactly why the USA isn't competitive. Y'all, and your politicians leading the country, just keep telling yourselves these things and then wonder why you're getting lapped by a bunch of cut-throat capitalists.
Cheaper labor, for sure
Everything and anything that China does better than the west: It must be cheap labor.
It's not the only thing, but it's a big one
The "dark" EV plants making cars aren't using any labour, let alone cheap labour.

There's also that thing that made China what it is today - the USofA using China for cheap labour and a place to outsource all the dirty parts of high consumption.

China's moved on, US perceptions haven't.

They are most certainly using cheap labor to design, plan, operate and maintain those "dark" plants.

Very highly automated production lines (cars) have similarly moved along the labor-price gradient in Europe (~east) during the last decades, despite language barriers: You need some engineers, electricians, constructions workers, janitors, etc regardless, and those still scale with general labor costs, even if there's no human hands in the assembly line.

The perception gap is the assumption that cheap means dumb or low-quality.

Those dark EV plants were designed and built by engineers and technicians working 996 for cheap on an hourly basis.

And this is why the US doesn't have fully automated parts in drive out EV factories?
Most of the cost of batteries is in labor? So why not outsource them out of China where labor is quite expensive vs developing countries?
Because no one in their right mind will work the Chinese 996-esque schedule in the 21st century, except the Chinese?

They are actually importing Chinese workers to their Brazil factory, leading to the slave labor expose by Brazilian authorities [0]. They have the same trouble recruiting in Thailand, where workers have functioning unions and enjoy modern working rights, instead of 19th-early 20th century Industrial Revolution type stuff.

[0] https://en.wikipedia.org/wiki/BYD_Brazil_working_conditions_...

Labor is expensive in China?
now yes, it's no longer 2005
Compared to their neighbors is SEA yes labor is very expensive