Hacker News Reader

Comment by runako | Hacker News Reader

> dumping cheap supply wherever they can to secure market share, all enabled by heavy state subsidies

Assuming for a moment this is more true for China than for other countries. Why would the average Canadian prefer to pay more for their next car versus having a similar car subsidized by the Chinese taxpayer? Most Canadians do not work in the auto industry. Further, the protectionism practiced in the EU/US/Canada is not likely to be successful long-term, meaning those auto industries are doomed.

Best path forward is to let in competition, make the domestics stronger, and let consumers get cheaper cars in the meanwhile. Provide some additional temporary support if necessary. (This is more or less how the US absorbed Japanese and then Korean cars.)

View on HN

> Best path forward is to let in competition

To compete with China in the ”open market” now, Canada will need:

- 25 years of investments in infrastructure and education in STEM and manufacturing

- Targeted state subsidies of chosen branches, which will require

- transition to at least partially planned economy, which will require

- at least partially transitioning to some form of dictatorial governance

- increase population at least twofold (you need multiple multi-million metro areas to support large high-tech clusters)

- devaluate CAD about 2x and accept about the same drop in local purchasing power (which likely will happen anyway, but could be not that harsh and fast).

China at the moment has like 10x advantage in industry ober Canada, it’s impossible to compete. It’s like saying that your immune system must be able to handle bubonic plague, so let’s just inject the body with the pathogen and let it adapt without any external support. A noble idea, but you’ll likely die in the process.

> Canada will need:

- Also a much larger population to create the labor pool necessary.

I was speaking mostly about the Western bloc of countries (EU + USA & Canada) that have their heads in the sand. As a semi-unit, they already have most of the pieces necessary to be competitive.

The auto industry is a shockingly high percentage of the Canadian economy, somewhere around 10% of GDP. Direct auto manufacturing roles are themselves about 1% of jobs nationally. If we start counting everyone involved with the sector, it's >5% of people in Ontario. It's not a winning political move to make all of those people unemployed.

Fair for Canada. In the US, the entire auto production economy employs fewer people than Amazon does in the US.

Let's be real, if Trump wants to reshore US auto factories from Ontario to Detroit, as he has stated explicitly, Canadian politicians can't do shit, USMCA be paper after all. Right now CAN just waiting for term to blow over and hope there's no Trump3. But ultimately if CA auto is going away / shrinking to irrelevance, at some point winning political move is to give masses cheap cars.

Reply on news.ycombinator.com