It is not as though other countries could not choose do the same.
It seem to me that China choosing to subsidize industry it is not so different than the US choosing to subsidize Roads, Autos and OIL.
In both cases it does seem to work splendidly as intended.
Other than political inertia (or economic reasons far beyond my ability to fathom) there is nothing to stop the US from following suit.
I accept "free market" is a term of art probably from before global trade reality and could be narrowly redefined to mean whatever one wants (or wanted when it was coined) but in my ignorance I see it simply as free to choose actions and responses.
But I am far far away from opinions I am qualified to hold,
think I will shut up now.
I think even the Chicago school would agree that roads should be public
> autos
I absolutely detest US policy with respect to autos so I will not refute this
> oil
Matter of strategic importance that isn’t related to spying or subterfuge. The Nazis probably would have won WWII if they hadn’t run out of diesel. I’m not sure digital cameras come close to this.
But you could imagine a country that invested, in addition to roads, cars, and oil, in public transportation, cities that you can get around on foot, and in renewable energy. Such a country might be better off that the US is now.
Not everyone wants public transport. I never use it. Don’t like being so close to other people. And it is much more expensive where I live. Four friends going for a day trip to the big city is €120+ by train and bus.
Had another look. It’s €265 just for the four train tickets alone, in the lowest class. €375 if you want to travel in comfort class. Two hour journey.
You could imagine that this wasn’t the case, right? Or you could imagine that investing in it for those people who do want it might improve your own life (e.g. by reducing traffic) not to mention society as a whole?
I think the overwhelming and undeniable success and prosperity of China is the biggest concern to the west, the neoliberals consistently predicted their immediate downfall that never came. Except we are all still led by the same neoliberals proven wrong about everything, the contradictions everywhere are driving us all into collective insanity. If we don't manage to purge our media and governments from these vile people the only path forward is collective decline, increased totalitarianism and our repression leading to a war with China. Wars don't always end in the right side winning, and the cold war was won by the wrong side.
So ridiculous. So a bit of subsidy is ok, but no more than the US does? As a country that’s suffered from the US subsidising its own industries, my sympathy is zero.
I would assume that China is your biggest trade partner for both of those categories. Is the US a major trade partner for either of those categories? I find it hard to believe. The US (and most rich countries) have way too much domestic dairy farm capacity. As a result, there is lots of govt subsidies paid to dairy farmers.
This particular complaint is tripple hypocritical. US whole deal is to sell under price until competition dies and only then bring up prices or remove offering.
It winner takes all econony is literally based on destroying the competition as such.
I read up on it, and it's not clear to me that it's actual dumping.
As in "selling below the cost of production".
I would say that China is trying to steer the car makers away from competing locally, as it's going to result in a price war. But that's not quite dumping per se.
That is (factually) a giant overstatement, and ignores domestic US politics.
It's almost like you believe the US remains interested in promoting free trade.
If it did, it wouldn't be levying illegal and constantly changing import tariffs, in violation of international trade agreements that it has signed up to.
I'm waiting for one of these "no you're wrong" comments to explain why it is that I'm wrong. I get that I didn't provide evidence either, but I'm relating the conventional wisdom on BYD-type cars. The C.W. is often wrong! But, like, you have to say why.
"Dumping" is a term of art in international trade.
It's the thing that happens when a foreign exporter sells goods in your country below their production cost (or far below what they're charging domestic customers). It's done to fuck up the foreign markets for those goods, or, in China's case, as a relief valve for malinvestment.
China drastically overfunds EV production. There's a whole weird story where provinces apparently competed to get slices of the EV production business, which resulted in a large number of competing firms, producing far more vehicles than the Chinese domestic market could consume.
This isn't just a US thing. Europe tariffs the heck out of these cars.
I'll take a stab. How about something like not more than 50% greater than OECD average per industry? My point: It seems reasonable that some countries was to specialise in certain areas. For example: Taiwan and (East!) Germany chose to build-out their semiconductor industry starting in the 1980s. It has paid pretty good dividends with a healthy amount of industrial subsidies. I also think the OECD should be raising tariff rates to protect against ridiculous levels of Chinese subsidies.
Appeals to fairness are difficult to accept when the rest of us out here in the world have been hurt by the US imposing tariffs and sanctions on us over the past few decades, and with intense chaotic energy in the last few years.
How do we make a system everyone is to abide by when the US can just rewrite the rules when it suits? Order collapses when a huge country behaves this way.
Basically every "made in USA" consumer product has a DOD contract. The DOD is mandated by law to purchase from US companies, so there is a huge sector of small-to-medium businesses which only exist because there is a guaranteed order coming every quarter for uniforms or boots or other equipment that would likely be 1/3 the price if they were contract-manufactured in China or Vietnam.
Not saying this is uniformly bad, because without the law the number of businesses with the ability to manufacture this stuff would trend toward zero, but it is a form of subsidy.
I wonder if this pattern is true for all militaries in rich countries. I think it sounds like good economic policy. If you want to grow your military, then you need to make sure it is spent domestically. Also, the "finish good" may include lots of parts that were built overseas. Think about a Tomohawk missile: I am sure the microchips are all made overseas. That said, the intellectual property is developed domestically (or with very close allies) and final assembly is done domestically.
US Arms exports bring in around $13 billion a year. The military industrial complex is a domestic jobs program that sells the vast majority of what it makes domestically. The US is clearly not spending a trillion dollars a year subsidizing defense in order to make their products more competitive in other markets.
I'm not sure I agree. In the aircraft industry especially the US has strongly pushed for exports. Overseas programs (TRS2, Avro Arrow) were terminated for political reasons (and replaced with F111 etc). More recently see F35 impact.
That's before we discuss the advantage Boeing has in the commercial market thanks to DoD contracts.
Your link shows that the US exports the same as the next 20 countries added together. That suggests some market dominance.
I also suspect these numbers do not include "military aid" - where weapons and munitions are "given" by the US to Ukraine wherever[1]. (But they may, I don't know.)
I agree though that the primary benefit of this is not "sales". And even if it was these aren't consumer goods. So it's not easily compared to China's approach. I'm not suggesting it's a terribly good subsidy. But it's still a subsidy.
[1] there are a lot of political benefits to be gained by having bases in foreign countries, or by port visits by US ships. Unfortunately most of those benefits have been eroded in the last 2 years. The gutting of USAid (which saved basically nothing), leaving the WHO, the tarrif nonsense, bombing Iran - all have destroyed a benevolent reputation 75 years in the making.
Sure the US benefits by giving arms to Ukraine, or having bases in other countries.
But that has nothing to do with the topic at hand which is market dominance for some industry.
>Boeing DOD contracts
This is probably the closest comparison to what China is doing. But it’s still not the same thing because the US buys equipment from Boeing, they don’t just give them direct subsidies.
The equivalent would be if China awarded Bambu a contract to provide 3d printers to schools.
To the extent that the US pursues policies that help defense companies. They don’t do it in order to help those companies compete in foreign markets. They do it because they want those companies not to go out of business for national security reasons, or because they want those companies to provide domestic jobs.
The US does other shady things, but spending massive amounts to help domestic companies outcompete foreign companies in foreign markets isn’t one of them.
If a country hands out enormous subsidies but yet isn't leading in anything, then maybe it's time to consider what structural reasons are causing these subsidies to be squandered and whose bottom lines are being padded.
I heard that when some country wants to pay in a different currency than USD for oil, a coup suddenly happens, or a helicopter comes and the president gets kidnapped
Ever wondered why everything in the USA contains corn syrup? Because sugar is artificially expensive (roughly double the global price) due to import tariffs that protect US sugar cane farmers.
Successful Chinese industries tend to be subsidized at the level of cities and regions. This creates fierce intra national rivalry that forces rapid evolution and excellence. Electric vehicles are an example.
Anything the federal government pumps money into tends not to do as well.
Or when one country can print endless money while threatening the rest of the world with all kinds of punishment if they stop using it as a reserve currency.
Stop crying already. US subsidizes a boatload of things.
It seem to me that China choosing to subsidize industry it is not so different than the US choosing to subsidize Roads, Autos and OIL.
In both cases it does seem to work splendidly as intended.
Other than political inertia (or economic reasons far beyond my ability to fathom) there is nothing to stop the US from following suit.
I accept "free market" is a term of art probably from before global trade reality and could be narrowly redefined to mean whatever one wants (or wanted when it was coined) but in my ignorance I see it simply as free to choose actions and responses.
But I am far far away from opinions I am qualified to hold, think I will shut up now.