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Comment by toss1 | Hacker News Reader

The Western financial elites thought they were exploiting cheap Chinese labor by promoting outsourcing of manufacturing - it would make for far greater profits.

Meanwhile the Chinese were exploiting the West's myopic focus on quarterly profits to gain access to and experience in fabricating and designing the top western technology.

The scale of this strategic blunder by the Western societies will be considered of historic importance.

The analysis in this article brings that into focus as well as anything I've yet seen. If the West does not rapidly regain focus on the things that matter -- real manufacturing, engineering, and AI (not consumerist opiates for the masses) -- we are soooo screwed.

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Taking a quick look at the YC S21 offering that is posted here - it seems all this capital is still mostly based on software that stimulates more consuming.

Startup seeks to raise funding or generate profits as quickly as possible -> VCs invest and hope for 50x return within 10 years -> Liquidity event may take startup public where they focus on quarterly profit

This is a system of private funding that generates maximum profits within a 5-10 year horizon while China and its public funding and actions is focusing on generating foundational returns and innovation that will last well beyond that 10 year horizon. The US approach of subsidies for loss leaders and laissez faire when it comes to regulation is kicking the can and optimized to pump out millionares/billionaires that can provide outsized returns to people in the market (employees/founders/congress/entrepreneurs) but less for people on the sideline.

Yup, consume now, profit some this quarter. Nevermind putting in the effort to invent new technologies that could profit and dominate for decades.

It is exactly the myopic financialist's approach. It works great for a while, juicing artificial growth. Meanwhile it starves the real growth engines, so when it stops working, there is no hope of recovery before failure (but the finance wizards have by then moved on).

Normally this applies at the scale of companies, but here it applies on the scale of nations or societies.

Ignore at our peril.

> The analysis in this article brings that into focus as well as anything I've yet seen. If the West does not rapidly regain focus on the things that matter -- real manufacturing, engineering, and AI (not consumerist opiates for the masses) -- we are soooo screwed.

When China can build a decent airplane then I'll be interested. Until then, they produce/replicate relatively simple tech and for whatever massive scale they have in their manufacturing, they lack sophistication and complexity in many ways. They're doing their thing and doing it well but they don't produce sophisticated, leading edge things or processes for the most part.

The USA has never manufactured more than it does today. Don't confuse manufacturing labor force size with outputs. High tech manufacturing in the USA leads the world by a significant margin today. Much of what China is manufacturing is considered routine and trivial.

Excellent points, about leadership in innovation - there are many ways in which the West still leads, and in many ways China is still merely a copycat - e.g., note how critical China sees it to get access to the tech and local ownership.

But, China is advancing, making some genuine homegrown breakthroughs and is certainly much further along the learning curve than the West in many areas such as solar panels.

Mostly, it is key to note that China recognizes this, has a long term strategic plan and is executing on the plan.

Unless we make appropriate structural & strategic changes, at the very least, treating a far wider swath of tech as sufficiently strategic to require development & production at home or among allied countries, we are on a slippery slope.

Edit: Plus, by the time we see them making stuff as good or better than in the West, it will be too late to catch up. Those growth curves tend to be exponential (compound interest on knowledge gains, network effects of multiple experts or multipl6field leadership, etc.).

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