If China is the enemy then why do we have entire stores selling nothing but Chinese made goods in the US? Why is everyone running to China to manufacture anything? If China is the enemy the whole world is in bed with them.
All that talk about competition being good for the market goes out the window when it comes to China seemingly.
China adopted an intentional strategy where western companies for benign reasons of profit leveraged China’s immense human capital to produce products and lower costs for everyone across the planet. This was a win for many. China got to industrialize and lift citizens out of poverty, and companies across the world were able to deliver mass produced good (eventually high quality) for cheap. The United States for example was the champion of China joining the WTO.
But China because it’s a communist dictatorship restricted its market and began doing things that were long-term oriented toward depriving others of power and manufacturing capability for their regime’s private gain. For example today we see that China has over-built its manufacturing capacity (like it did with housing) and has used artificially cheap labor, unjust laws, and currency manipulation (among many other things) to prevent entry into their market while running companies from other countries out of business leaving them dependent on Chinese manufacturing. Prominently you can look at Germany today where sales in China have collapsed, and at home their vaunted manufacturing industry is going through what happened in the US in the so-called “rust belt”. The US has smartly enacted tariffs and other measures to protect its market to some extent from China’s strategy here.
So when someone says something like “all this talk goes out the window about competition when it comes to China” you’ve got to understand a bit more about how China has behaved toward other nations and the egregiously unfair trade practices it has enacted to understand why many countries ranging from the US, to Mexico, to Australia and of course the EU have enacted various restrictions and industrial policy to combat China’s embarrassing and poor behavior on the global stage with respect to trade.
Anything but actually stop having a complete dependency on China for their entire way of life of course because that would be too hard. So just do vague gestures to collect votes and move on.
Everyone wants more independence to some degree, it’s just that not everyone is prepared to pay the same price, or is willing to accept the same compromises. So yeah, if you personally put the line somewhere, you will be disappointed if a given government sees things differently and puts it somewhere else. It does not mean that everything is terrible and they are lazy or stupid.
As other states famously don't do things for their regime's private gain? (Even calling it "private gain" is arguably stretching it in the case of China, the other superpowers USA and Russia are certainly much better at the private gain part)
"Depriving others of power" other states definitively do whenever they can, and they're often better at it. Depriving others of manufacturing wasn't so much China did, as something it said "yes please" to and played along with. Manufacturing was offshored to a lot of other countries than China, this was something western leadership, for whatever reason, deeply wanted.
That is equivalent to saying that the Chinese have been as good businessmen as the Americans.
"Embarrassing and poor behavior on the global stage with respect to trade" is a phrase that is equally applicable to USA.
For decades USA had succeeded by various means of bribing and blackmailing to destroy the local industries in many countries, based on the propaganda about a free global trade, forcing those countries to not protect in any way their industries that competed with US companies, because supposedly if they bought instead cheaper and better US products that will be a win-win situation, even if they become dependent on USA, but they should not worry because USA can be trusted as a commercial partner and will always provide those products in advantageous terms.
But in the recent years, USA has made a U-turn, and now it makes desperate attempts to protect its own industries in the same way that it had forbidden other countries to do and moreover USA has invented bogus legal theories that when any products that contain even a few percent of parts with a US origin are sold to someone, the buyers do not own what they have bought, but USA has the right to dictate to them what to do with those products, so that now everybody knows that USA cannot be trusted as a commercial partner and buying anything from it must be avoided.
The Chinese may have used many unfair commercial tactics, but this is really not something that Americans may criticize, because since WWII USA has been a champion of unfair commercial tactics, of which most Americans do not appear to be aware.
As an example, I have seen in USA comments that when NATO has expanded by incorporating many Eastern European countries, that was a favor made to those. Nothing could be farther from the truth. Those countries were forced to buy their memberships with many billions of $. They were blackmailed to accept in exchange for their membership to make contracts worth of many billions for buying products or services from certain US companies at greatly inflated prices, so certain well-connected US shareholders must have gained a lot of money from the NATO expansion.
This was a single example, but it was just typical for how USA has always acted in the global trade since WWII, by using any means possible to gain commercial advantages for its major companies.
If one subscribes to the theory that the only mission of any company is to make as much money for its shareholders as possible, and that the state should assist in this objective, one can see the behavior of USA as legitimate, but then the fact that China was clever enough to also ensure as much profit for its industries as possible is equally legitimate.
As non-American and non-Chinese, I dislike equally their dominance in the global trade. In my opinion, the only way that would benefit to the entire mankind is to not have the production of anything concentrated in a single country or in a couple of countries, but it should be possible to produce locally everywhere any of the products that a human needs, from food and clothes to electronic components. The advantages in avoiding excessive dependencies from others far outweigh any economies of scale of mass production.
A half of century ago, this was not an unusual economic model, e.g. many US companies were licensing their IP to local producers in various countries, so they could produce there things that had been designed in USA, instead of importing finished products and becoming dependent. Nowadays companies are much greedier, so they are no longer content with a modest revenue from licensing, but they want to milk all the profit that can be obtained by being the only source for the end product, without alternatives, so patents and the like are used only for preserving a quasi-monopoly position, by preventing competition.
USA and China are free to act in their own best interests, but other countries should make much more serious efforts to reduce their external dependencies.
Perhaps you believe that, but it doesn't come across in your writing. You spent your entire post discussing and criticizing the United States, but your only mention of China has been "well America did it anyway" and "China was smart". Both true but besides the point - unless you want to continue cycles of mercantilism, in which case your criticism of the United States can be thus rejected. What's good for the goose is good for the gander, as they say.
I'd challenge you if you truly equally dislike the dominance to spend a similar amount of time criticizing China. If you are unable to do that, it's difficult to take your statement and attempt at positioning yourself as "I don't like either" at face value.
Nonetheless, right now, as an European, I know about bad past actions of China or suspicions of bad future actions of China from hearsay, as I have never been affected directly from any of them.
On the other hand, by what I consider as cheating, USA has already stolen a lot of money directly from my pocket, by many actions during the recent years, all of whom had only the purpose to eliminate the competition for US companies, to restrict the supply of various kinds of consumer goods and to raise their prices, in order to increase the profits of certain companies. Millions of ordinary people all over the world have lost money because they were forced to pay inflated prices for consumer goods, as a result of the anti-competitive actions of USA. The money lost by those people were eventually transferred to the shareholders of some US companies, and also of a few South Korean companies, which were the only beneficiaries of these US actions.
These anti-competitive actions have started with the sabotage of Huawei, exactly in the moment when it was predicted that it will pass soon from the 3rd position to the top of the smartphone vendors, in front of Samsung and Apple, while using their own chipsets, which were superior to those of Qualcomm.
The result of eliminating the main competitor for Qualcomm and Samsung has been a great increase in the price of the "flagship" smartphones. Before that, I could buy a "flagship" smartphone with e.g. $600, but nowadays smartphones that cost much above $1000 or even above $1500 are considered normal.
The second big step was the sabotage of the Chinese makers of flash memory and DRAM memory, also exactly in the moment when they were positioned to take a significant share in the memory market.
This action has preserved the dominance of Micron-Samsung-Hynix, which has created the necessary conditions for enabling the huge price increase of memories after the AI companies have hoarded most of the DRAM and SSD production.
To top all, the war started by USA has diminished a lot the supply for a lot of materials used in the electronic industry, which has raised a lot of prices. Now even the PCBs have become much more expensive than in the past. I have lived many decades, but today the ratio between the prices of computers, of smartphones and of many other kinds of electronic devices, and the revenues of normal people has become greater than during any other time that I can remember. There are also cheap products, but those have performance characteristics much worse than the corresponding old products, so buying any of those will not be an upgrade, but a serious downgrade.
Like many people, I was forced to make a few upgrades this year, even if I will delay any other upgrades as long as possible, so I already lost a lot of money.
So yes, for the moment, when I look at my accounts, I am more inclined to criticize USA for what they have already done, than to criticize China for what they might do in the future, if we are foolish enough to become dependent on them.
Why would, for example, the United States demand that Huawei be removed from the networks of NATO allies? Could you think of a couple of reasons why that might have occurred?
If your concern is only cheap products, I have to assume you're also in favor of removing minimum wages, removing trade restrictions that the EU has enacted to for example protect its auto industry, dismantling labor unions in Europe, and removing other European market restrictions and protections which affect the United States (for example)? Would you be in favor of ASML being able to license out its technology to China? What do you think might happen? That will get you lower prices that you want. Why might you not want to do that? What is your answer for the destruction of Germany's automobile industry (and probably Italian and French automakers - remember you can't have protections in your world view here) and the hundreds of thousands of jobs that people will lose as China exports its cars from China to Europe?
It seems like you're just cherry-picking things to be mad at the US about but not holding a very logically consistent position while ignoring the actions of other actors on the world stage. It's a bit like having blinders on - the US is shining so bright and it's so important to everything in your life that you're neglecting the actions and policies of others, which of course is leading you to more extremist positions (low prices at all costs even if that results in crises in Europe).
However, what matters are the actions, not the words. The US "sanctions" had major effects on the markets for various consumer products and on the profits of certain companies, but they had little or no effect on anything that truly matters for national security.
Attempting to prevent Huawei from making smartphones has absolutely no relationship with the US national security.
Forbidding the use of Huawei communications equipment in critical infrastructure has absolutely nothing to do with the US "sanctions". Choosing what to buy is an internal matter of USA or of any other country that institutes such regulations and only incompetents will use in critical infrastructure black boxes that may be controlled by another country.
Trying to equate a measure taken against the world and in favor of Qualcomm, by sabotaging the production of smartphones at Huawei, with an internal regulation like forbidding the acquisition and use of Huawei equipment for infrastructure, is a logical fallacy. Only the second of these 2 is justified.
> Would you be in favor of ASML being able to license out its technology to China?
ASML is free to license its technology as they please, but obviously they would be very stupid to do so.
More than twenty years ago, Huawei entered the smartphone market by licensing the technology for making smartphones from Siemens. Siemens sent engineers in China, at Huawei, who stayed there for a half of year or more, to teach the Huawei engineers how to make smartphones.
Already at that time, I considered what Siemens was doing as being incredibly stupid. Of course, a few years later Huawei was making better and cheaper smartphones than Siemens, while Siemens decided to abandon the smartphone market. All that is the fault of the management of Siemens, not of anyone else. The worst part was not the licensing of the technology, even if that was very dumb, but the incapacity of the management to prioritize the continuous improvement of their products, both by becoming better and by becoming cheaper, while Huawei was very motivated to do this, so starting from at most the same position they still pulled far ahead.
I have seen plenty of companies which were forced to abandon markets, or went bankrupt or were acquired by competitors, and which blamed their fate on supposedly unfair competitors, e.g. from China. But in all those cases I have never seen any attempt from those companies to really compete. All were complacent to have products that were successful in the past and now they were making only negligible changes to them, especially from the point of view of the production costs, hoping that those products will continue to make money forever, even without any significant improvements.
I hope that the European car industry will survive, but if anything happens to it it will be only due to mismanagement, not due to China, because what should have been done to make competitive electric cars was known for decades and in Europe there was more expertise in power electronics than anywhere.
You accuse me of being in favor of things that directly contradict what I have said in my first comment.
I have already said that one of the things that I dislike at USA is that it has fought for decades to dismantle all protectionist barriers in all countries, to enable US companies to sell more there, which has lead to the destruction of many local industries. Now USA feigns forgetting all what has been said and done in the past, while trying to implement trade barriers.
I have also already said that I consider the availability of locally-produced goods, to avoid excessive interdependencies, more important than the lower price that could be achieved when all the production for the entire world of a certain item would be concentrated in a single giga-factory.
But protective measures must be chosen wisely. As long as there is no local production, there is nothing to protect. And also, if local production is protected from competition, there must exist alternative legal means to force them to design and fabricate competitive products, instead of exploiting the privilege of being protected.
Until I will see the resurrection of the European industries of memories and of smartphones, I would prefer to buy them cheaply from China, instead of being forced by the actions of the US government to buy them at triple prices from Micron and Qualcomm.
So what? The EU and China use their own bespoke language when they want to do something that doesn't in the minds of perhaps outsiders have a good justification.
> The US "sanctions" had major effects on the markets for various consumer products and on the profits of certain companies, but they had little or no effect on anything that truly matters for national security.
Which sanctions specifically? The ones we put on Russia which raised the cost of oil and gas and other commodities? I'm sure you are not in favor of those since it caused prices to rise. Right?
> Attempting to prevent Huawei from making smartphones has absolutely no relationship with the US national security.
The US didn't prevent Huawei from making smartphones, the US required that Huawei not be utilized in major infrastructure because of security concerns. The Chinese are obviously adversaries to the United States, Europe, Canada, Australia, Taiwan, and others and so utilizing their infrastructure which would of course have backdoors and permit Chinese spying on allied activity isn't acceptable. Seeing how Russia went on to invade Ukraine (supported by China) it proved to be a prescient move.
> Choosing what to buy is an internal matter of USA or of any other country
Exactly like how utilizing tariffs is an internal matter of the United States or any other country and allows us to choose what we buy. So you can't criticize American tariffs and also hold this view.
> ASML is free to license its technology as they please, but obviously they would be very stupid to do so.
They're actually not free to license their technology, believe it or not, because some of their key patents are American, but that's besides the point. But just to be clear, if allowed you would support ASML setting up shop in China, licensing its technology, and so forth to Chinese companies. If they did that, how long do you think it would be before ASML began to suffer the same fate as many other companies are now?
> I have already said that one of the things that I dislike at USA is that it has fought for decades to dismantle all protectionist barriers in all countries, to enable US companies to sell more there, ...
The US (along with Europe) worked to remove protectionist trade barriers over time to lower prices which you've advocated for. Europe wanted those removed (and then went on to add protectionist trade barriers back in while the US didn't) so they could sell more products to the American market.
> which has lead to the destruction of many local industries.
That's actually the fault of China. But I'm confused because you also support the destruction of local industries as long as it means lower prices. Why pay triple the cost for hand towels which could be manufactured in Portugal when you can get the same thing from China? Europe then allowed the imports of those products and your local industries collapsed or relocated manufacturing to China.
> I have also already said that I consider the availability of locally-produced goods, to avoid excessive interdependencies, more important than the lower price that could be achieved when all the production for the entire world of a certain item would be concentrated in a single giga-factory.
You said that but your comments don't support those claims. For example you want and are ok with the European car industry being destroyed by cheaper Chinese cars, but that would create excessive interdependencies (bye bye auto industry) and would remove locally-produced goods such as automobiles and the factories, raw material inputs, machinery, and parts used to create those vehicles.
> would prefer to buy them cheap from China, instead of being forced by the actions of the US government to buy them at triple prices from Micron and Qualcomm.
Europe chooses to engage with the United States for security. Europe also supports democratic Taiwan. You are blaming the wrong entity here. If Europe would no longer like the United States to support it militarily it can choose to do that. If Europe wants to support China over Taiwan they can do that. Spending 5x more on your military will result in some sort of cost increase or standard of living shuffle, but maybe that will be counteracted by additional cheap imports from China as you stop supporting democratic Taiwan? I guess it remains to be seen.
While EU and the other definitely need to deal with Chinas and its practices, the worst threat right now is USA. Speaking about egregiously unfair trade practices and poor behavior.
Obviously many businesses are working around this, but it raises questions about whether Alice Huang was actually a government spy vs someone doing shady import business. Why was her day job circumventing a government policy if she's a government spy?
Because geopolitics is a lot more complicated than leaving a group chat? This is like the inverse fallacy of Trump's take on trade deficits. Trade volume isn't the sum total of foreign policy.
> All that talk about competition being good for the market goes out the window when it comes to China seemingly.
I'm no fan of the "but muh free market" arguments, but generally competition is seen as good for the market only when it's "fair"...