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Xi Jinping's colleagues rejected an 'unequal' trade deal (nikkei.com)
63 points by 1PlayerOne 6 days ago | hide | past | web | favorite | 81 comments





The part I find most interesting is about the strength of Xi's grip on China.

Either Xi has rejected this (at least for the moment), and has directed his puppets to "reject" it (to give the appearance of them stopping him from doing something he was reluctantly willing to do)...

Or Xi is not as firmly in total control of China as various events had led me to believe.

His thought is enshrined in the constitution. He's breaking precedent by remaining in charge for life, not just for ten years. But he can't approve a trade deal if others don't like it? Is this "you can be dictator as much as you please, but mess up the economy and you're gone"?

I also find it telling that "you can't keep taking our IP just because we're doing business" is termed "unequal". Interesting idea of "equality" there...


I think this is actually rather typical of dictatorships - the more 'absolute' the power of the leader, the less dispersed sovereignty is, the more they end up having to go with the current. There are two standard reasons for this. First, when you have a coalition, even in a non-democratic state, and the coalition agrees to do something, you're pretty safe - because you have everybody who matters on board. Second, people often end up in the position of absolute tough-man dictator because, unfortunately, that's what a lot of people want from their leaders. So it's often the case that the strongman stuff follows from a relatively weak grasp on power, rather than the other way around, as the leaders are pushed to play the part the audience wants from them (pre-WW2 Japan has been said to have been like this).

PS: This is actually the classic Roman formula. The Emperor uses the support of the mob (soldiers, citizens, etc) to counterbalance against the traditional nobility (senate). So you get guys who technically are the absolute ruler and god of the state, bending over backwards to keep public opinion sweet.


Party beauracracy runs China not Comrade Eleven. Have no doubts that Xi will be dealt with if he does not obey.

This is how most autocracies work internaly. The ruler is only as powerful as tangled web of intrests and loyalties that keeps him in power. So he must accomodate his partners.

> This is not a personally run empire but a huge and difficult-to-manage bureaucratic machine with its own internal rules and principles,” “It happens time and again that the president says something, and then nothing or the opposite happens.” [1]

[1] https://www.nytimes.com/2019/03/23/sunday-review/how-powerfu...


You will then be horrified to learn that US intelligence has a written mandate to obtain foreign technology that the US lacks and make it available to US industry.

A well-kept little dirty secret.


Source?

Classic what-about-ism.

And I deeply resent you putting words in my mouth (or at least attitudes in my brain). It's a dishonest, cheap rhetorical trick.

And apparently you can't see the difference between the government trying to take it by spying, and the government forcing you to give it away by contract as a condition of doing business. Hint: One you can take countermeasures against; one you can't.

And, like others, I would like to see your source.


Please keep the whataboutism cliché off HN (see https://news.ycombinator.com/item?id=19862258 for more).

Also, please keep deep resentment off HN. If that's how you're feeling, find some other way to process it before returning to comment here. (Edit: I know that's not easy, but it's necessary for this place to not burn.)


What I'm trying to fight is this trope: "If you are in favor of A, then you must also favor X", where X is something almost-but-not-quite-completely different from A. (That's why I picked X instead of B.)

And that's usually the end of the comment. There's no explanation of why X and A are like each other in any way that matters. There's no conclusion, like either "Since I presume you're not in favor of X, you can't consistently be in favor of A either", or the opposite, "Since you're in favor of A, you really ought to reconsider your position on X".

What there is, though, is what feels to me like an attempt to put words in the other person's mouth. This feels to me like a step beyond whataboutism. It's not just "what about X", it's "You must also agree that X is true".

I've been seeing this pattern increasingly over the last 6 to 12 months. (Alternately, I've become more sensitive to this pattern in the same time.) I consider it to be... let's just say it's not a positive contribution to the discussion.

So: How should one respond to this? Flag every instance? Ignore? Simply respond "Non sequitur" and leave it at that?

You don't like how I responded. Fine; you have the right. But what do you think I should do instead?


I'll give you two answers, one specific and one general. The specific answer: your post above already contained a good reply. The trouble was that it also broke the site guidelines. One can turn it into a good comment by editing those bits out. If I do that, this is what I get:

There's a difference between the government trying to take it by spying, and the government forcing you to give it away by contract as a condition of doing business. One you can take countermeasures against; one you can't.

That cuts not only the first two paragraphs, but also the flamey bits from the third ("Apparently you can't see" and "Hint:"). Doing all that yields a substantive, respectful reply. (I'm not considering whether it's a good argument here—just whether it's offside or not.) And of course it's fine to ask politely for the other person's source, or how they know what they claim.

The general answer: one good way to reply to a comment of the form "If you are in favor of A, then you must also favor X" is to mention significant difference(s) between A and X that show why A doesn't imply X. For example, something favorable in A that X lacks; or something unfavorable in X that A lacks. And to show why the difference is strong enough to break the assumed arrow from A to X.

There's an aspect to this that is unfair. pinkfoot's comment was pretty lazy (opting for snark and a drive-by rather than giving the reader enough information to really establish anything). If you're going to reply to a comment like that, the temptation is also to take the path of least resistance—for example, to vent, rather than to put much thought or work into a reply. The other person didn't put much thought or work into theirs, so why should you?

The answer is that you don't owe it to the other person, but to the general reader and the community. Your reply to such a comment will either raise the quality of the site or lower it. (Responding on the same level is lowering.) The two good options are: put in the thought and work to come up with a specific reply—cutting any flamey bits because by then you don't need them and they weaken your case anyhow—or, if you don't have the time and energy to do so, simply not to post.


Most important decisions require the approval of the 7 men Standing Committee of the Politburo[1], of which Xi is only one member.

[1] https://en.wikipedia.org/wiki/Politburo_Standing_Committee_o...


Xi has enormous amounts of soft power with which to influence the Standing Committee.

China manipulates world currencies, does not enforce or respect copyright and trademark law and finds other ways to bend international laws around IP. This is holding them to account and in so far as that is concerned, this seems in the long-term interests of America since China just rips the tech and localizes/monetizes while restricting access to their domestic markets from the foreign players that developed the tech in the first place.

> These cries came not only from the party's conservative left but also from the rank and file -- from the core of workers and management at state-owned companies, from industries that rely on subsidies for survival and from the bureaucratic institutions that protect them. The proposed deal threatened their interests.

That might not sound good to these particular special interests but this sounds good for China as a whole.


This is largely the same story as can be read here:

https://www.scmp.com/news/china/diplomacy/article/3010456/wh...

I find it amazing that this deal appearantly was close to coming through.


Why is it so "amazing"? They're between a rock and a hard place. Their economy is guaranteed to collapse if the US keeps erecting trade barriers. The US is much less dependent on them than they are on the US. It will hurt here (with a nice side-effect of import diversification), but it will be totally unbearable over there. They know this perfectly well. The US has a tremendous leverage in this negotiation. China's main sticking point is they want to remove this leverage and make the deal unenforceable. Yeah, that might have worked with Obama (who was, IMO, too eager to please), but the current administration knows better than to sign something like that.

The article really explains it well.

It is USA, a foreign power, dictating detailed law in China; that digs deep.


The US is right to try to seek some reasonable guarantees that the terms of the deal will be adhered to

Um, yeah, trade deals tend to "dictate law" in other countries. TPP would have done a lot of that. What's so bad about not forcing industrial espionage on US companies if they want to operate in China? No one is forcing China at gunpoint to take the deal. If they have another market they can sell to, they should consider doing that.

"No one is forcing them at gunpoint to take the deal."

The Trump administration did choose the "nuclear option" just one day later.

https://www.bloomberg.com/news/articles/2019-05-16/trump-s-h...

I think the above bloomberg article explains just how extreme an action it is; and also sprinkle it with comments from american politicians which seem to reveal that this is about more than "reasonable guarantees".


[flagged]


"$500B in trade imbalance"

You make it sound like it's a bad thing. Trade imbalance simply is, there is no moral value statement involved. For consumers a trade deficit is actually pretty sweet.

You can also see it this way: America gets 500B worth of goods from China, in exchange for currency it can simply print.


> For consumers a trade deficit is actually pretty sweet.

That's textbook economics. It's called "textbook" because it is theoretical, and even then it assumes that all other things remain the same. Deficits don't impact every country the same way. In any case, no economics textbook will claim that decades-long deficits are good for the consumer.

> You can also see it this way: America gets 500B worth of goods from China, in exchange for currency it can simply print.

Another way to look at it would be in the slow deindustrialization of America and the bleeding out of hundreds of thousands of once middle-class jobs that kept the American economy ticking. Those jobs have moved abroad because it looked better for C-level execs whose compensation is tied to their stock price, not because of any BS about comparative advantage.

People making textiles or auto parts can't switch to data science jobs overnight, even though the economics textbook says that's what should happen, all other things remaining equal.


The trade imbalance has grown since these tariffs were enacted.

[1] https://piie.com/research/piie-charts/us-trade-deficit-china...


US is the aggrieved party. It has full right to make sure that the wrongs do not continue.

Less than 3.5% of China's GDP is trade with USA.

China can stop trade with USA nearly completely, and not even notice it really

Few years ago, the biggest US export to China was plastic and paper (garbage)

Now, it changed to agriculture products, airplanes and cars (German American cars...)


I think it's more like 4.5%, something like 530 billion on the GDP of 12 trillion. And no, they can't stop exporting to the US. The entirety of their economy depends on continued growth, and if, unwisely, they chose to stop exports to the US, China would be deeply fucked for the next decade or more.

>> Few years ago, the biggest US export to China was plastic and paper (garbage)

From https://ustr.gov/countries-regions/china-mongolia-taiwan/peo...:

"The top import categories (2-digit HS) in 2018 were: electrical machinery ($152 billion), machinery ($117 billion), furniture and bedding ($35 billion), toys and sports equipment ($27 billion), and plastics ($19 billion)"


==They know this perfectly well. The US has a tremendous leverage in this negotiation.==

You are leaving out how Donald Trump wants to be re-elected in 18 months and Xi has no such pressures.

==China's main sticking point is they want to remove this leverage and make the deal unenforceable. Yeah, that might have worked with Obama (who was, IMO, too eager to please), but the current administration knows better than to sign something like that.==

Like that "deal" we signed with North Korea? I think you are giving the administration a little too much credit as they have engaged the same types of tactics with our allies (Canada, Mexico and the EU) who are not in the same position as China.


Which "deal" have we "signed" with North Korea? As far as I'm aware that negotiation is very far from over, although positive movement is evident (for which South Korean government gives credit directly to Trump: https://www.reuters.com/article/us-northkorea-southkorea-tru...). There haven't been any nuclear weapons tests either. Do you think the Koreas can be reunited in a year after being separate for 50? Nobody has ever gotten anywhere near as far as Trump in all of this. Give credit where credit is due.

==Which "deal" have we "signed" with North Korea? As far as I'm aware that negotiation is very far from over,==

We haven't signed a deal, that was something Trump promised at the second summit, but never delivered. Meanwhile, after the first summit on June 13, 2018, Trump said, “There is no longer a Nuclear Threat from North Korea.” [1] Was that ever true?

==although positive movement is evident==

Just last week, "North Korea fires two rounds of missiles, 2nd launch in a week, South Korea says" [2].

==Give credit where credit is due.==

What has North Korea signed or taken concrete actions on?

[1] https://www.marketwatch.com/story/how-trumps-premature-victo...

[2] https://www.nbcnews.com/news/world/north-korea-fires-unident...


He didn't like the deal. He walked away. That's how you negotiate.

>> North Korea fires two rounds of missiles

So they're getting ready to negotiate again then. That's good. Still: no nuclear testing.


==He walked away. That's how you negotiate.==

You negotiate by giving them what they want (ending war game activities with South Korea [1]) and receiving nothing concrete in return? Seems like a questionable tactic?

Also, just to clarify, did you support the Iran agreement?

==So they're getting ready to negotiate again then. That's good.==

Are you honestly arguing that North Korea launching missiles is a good sign?

== Still: no nuclear testing==

Not according to satellite images.

"The satellite images suggest that the North has been engaged in a great deception: It has offered to dismantle a major launching site — a step it began, then halted — while continuing to make improvements at more than a dozen others that would bolster launches of conventional and nuclear warheads.

But American intelligence officials say that the North’s production of nuclear material, of new nuclear weapons and of missiles that can be placed on mobile launchers and hidden in mountains at the secret bases has continued.

And the sanctions are collapsing, in part because North Korea has leveraged its new, softer-sounding relationship with Washington, and its stated commitment to eventual denuclearization, to resume trade with Russia and China."[2]

[1] https://www.bbc.com/news/world-asia-47431309

[2] https://www.nytimes.com/2018/11/12/us/politics/north-korea-m...


You obviously haven't read the article of this thread and do not know about the so-called Unequal Treaties China was subjected to in the 19th and early 20th century...

Because the U.S. doesn't have a similar history with the British Empire?

No... That isn't even remotely similar. That's also completely irrelevant here.

Are people really that clueless about history? Or is it just bad faith?


Please don't post name-calling or flamewar comments to HN. If other people are ignorant, and you know more, the thing to do is to teach them, so we can all learn something. Lashing out with labels only makes this place worse, as well as making your own position seem weaker.

I completely understand how frustrating these discussions can be and how posting a reply like that gives a certain temporary relief, but it's not worth the damage it causes.

https://news.ycombinator.com/newsguidelines.html


I'd say neither. Americans just want to put America first.

It's not bad faith to want that. If that means something that looks like Unequal Treaties, so what? Americans have no reason to care. China can be bitter about that forever, or forget it, or decide that Unequal Treaties are awesome. It really doesn't matter to the USA.

It is clear that the Chinese want to put China first. That is their right, and is to be expected. Americans putting America first is no different.


Please point out the provisions of the Treaty of Nanking [0] that are materially worse than terms the U.S. colonies were subject to [1]?

[0]: https://en.wikipedia.org/wiki/Treaty_of_Nanking [1]: https://en.wikipedia.org/wiki/Colonial_history_of_the_United...


China had it so easy under that treaty. If the US colonies had been given terms like that we'd probably still be British subjects.

How is this relevant?

US colonies were a product of the British Empire, populated by British subjects.

China was an independent country with people who were not British subjects.


Like China, the U.S. has a history of being victims of "unequal treaties" imposed by the British Empire. In fact, the Treaty of Nanking had a provision to ban Americans from the opium trade, which China helped the British to enforce.

Absolutely. This is obvious but...

[flagged]


I think there are some things you could do to receive better responses to your comments in the future.

First of all, there's a reason the HN guidelines explicitly prohibit complaining that someone hasn't read an article. Not everyone has the same background knowledge, so even if they read the article, they may not have paid attention to the same details, failing to realize their significance. If you think some part is relevant to a point you want to make, just refer to it, e.g. "The article mentions that..."

Second, the same differences in background knowledge also mean that not everyone will draw the same conclusions from the same facts. If you think you know something that contradicts or enhances the comment you're replying to, you'll be understood more easily if you explicitly state which part you're referring to. E.g. when you bring up the unequal treaties, it is unclear why you think that someone who knows about them would not write a comment like m0zg's.

Third, as HN is a community built around intellectual curiosity, a good comment usually contains some novel information. This very comment of yours I'm replying to contains none.

Fourth, while letting off some steam by accusing others of bad behavior can make you feel better, it's not really interesting for other commenters, so you could just as well not respond at all. I happen to agree that US colonial history is irrelevant in the context of this discussion, but saying so is equally irrelevant.

Fifth, my comment is of course also totally irrelevant. Feel free to ignore it if you don't find it helpful.


There is a difference between different opinions and idiotic replies that are tantamount to trolling.

I am fine with the former but not the latter, which is at best noise but usually simply poisons any thoughtful discussion as we see here: My comments were hijacked and poisoned.


Obviously the poster you initially replied to was trolling. My posts on the other hand were trying to highlight what I believe to be obvious historical parallels. If you still believe that to be "irrelevant", you certainly haven't made a case one way or the other. I'm going to move on, but try not to lump everyone into the troll bucket next time?
kolanos 6 days ago [flagged]

Please familiarize yourself on colonial mercantilism [0] and then get back to me on how "irrelevant" U.S. history is...

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


Please don't post in the flamewar style to HN. We're here for thoughtful conversation and to learn together. Don't comment in the spirit of defeating enemies—that subtly destroys curiosity, which is the spirit of the site.

https://news.ycombinator.com/newsguidelines.html


Asking another poster to familiarize themselves with history of which they may not be aware is in that style? Strange.

That modest version leaves out the bits I was responding to.

It's the combination of snark and low-information. The comment comes across as trying to show up the other person as ignorant, while positioning yourself as the smarter and correct one. That is an internet status game, not substantive conversation. Does it matter, or add anything interesting, who wins the kolanos vs. NotPaidToPost match in a subthread?

Something similar appeared in your earlier comment https://news.ycombinator.com/item?id=19931917. You're referencing things without teaching the reader why they matter and what they show, sort of like weapons in a cross examination. Cross examination in an HN discussion is boring, and a step towards being mean.

If you actually do know more, a much better thing to do is share some of what you know so we can all learn. Instead of trying to defeat one user, share information with all of us. Alternatively, it's always fine not to post anything.


You seem to also be skirting over the latter 20th and 21st centuries where China has been stealing ip and violating human rights.

==violating human rights==

Kind of hard to take this stance when we are palling around with Saudi Arabia and Israel and potentially committing our own abuses at the southern border (and definitely droning civilians in other countries).


...yeah those places need work too. Idk what abuses we have at the southern border. People illegally cross and they are detained. This is very typical border policy.

Taking children who are apprehended with their parents and then separating them for detention isn’t typical and hasn’t been done by other administrations.

I could never understand why export subsidies are bad for the importing countries, I mean, we have the Chinese taxpayer directly putting their money in the pockets of their foreign clients (this point about subsidizing exports was made by Jean-Baptiste Say two centuries ago). And while the Chinese are kind enough to help us pay for their products with their own money we can focus instead on other stuff which we’re really great at building/providing as a service.

It hurts domestic industry in the other country. The negative effects are concentrated while the benefit is diffuse.

Example: China subsidizes solar panels to the point where all US solar panel companies go bankrupt. The US solar panel industry is badly hurt, even if the rest of us get 40% cheaper solar panels.


It also hurts R&D. A state-subsidized solar panel factory might use inefficient, wasteful production methods which could not compete in something closer to a market economy. This can have negative externalities for the state, end-users, and society.

I was thinking about the solar panel example, I think that in this case the US (and Germany, another country that has made similar complaints) can instead focus their economic resources on trying to solve energy storage and distribution, which is still an unsolved problem (I mean “unsolved” in the context of the intermittent power inputs provided by solar and wind) and they can use part of the money that would have otherwise been spent on building solar panels (remember, these are now subsidized by the Chinese) on trying to achieve this.

They can do this, but I think the point of contention is whether it will ultimately turn out to be a wise strategic decision. The fact that it's not an entirely voluntary decision also seems at least somewhat important.

Regular people take economic steps because of decisions almost forced on them from the outside on a regular basis, being stubborn about going down a route that is not economically rational anymore it's just that, stubbornness.

I remember our 60-year old mom being discontent about my brother still wanting to be in the business of selling cows (my brother was a peasant) even though that wasn't economically rational anymore, as my brother had to fight against agri-business (he's a sole cow breeder) and against farmers from other countries whose governments are more generous towards them (our government it's not that large-handed when it comes to small farmers, I live in Eastern Europe). My mother correctly pointed out that there was a lot more money available for my brother if he had only wanted to accept other job opportunities (like being a truck driver) and give up what was essentially an economically dead end.

So, if a 60-year old woman from Eastern Europe with no formal education in economics can still intuitively see what the best economically rational move is given a set of inputs, then I fail to understand how come a democratically elected government like the US one cannot do the same, but instead it chooses to go down the economically dead end road, and all that only because of stubbornness and misguided pride.


> Regular people take economic steps because of decisions almost forced on them from the outside on a regular basis, being stubborn about going down a route that is not economically rational anymore it's just that, stubbornness.

While this may be true for individuals, it seems perfectly reasonable that it could also be due to things like poor strategic planning, poor salary/trade negotiation, an unnecessary willingness to roll over when resistance is encountered, etc. The #1 economic and military superpower of the world has vastly more resources and options at its disposal than an individual farmer.

> but instead it chooses to go down the economically dead end road

Just to be clear....you are claiming that you can "intuitively see" that this economic road is certain to be an economic "dead end" (I'm not sure of the exact meaning of that in an economic context)? And you can also "see" that the motives of those who disagree with you are limited only to stubbornness and misguided pride?


> It hurts domestic industry in the other country. The negative effects are concentrated while the benefit is diffuse.

> Example: China subsidizes solar panels to the point where all US solar panel companies go bankrupt. The US solar panel industry is badly hurt, even if the rest of us get 40% cheaper solar panels.

What is the end game in this example for China? Do they expect to subsidize now and raise prices to exorbitant levels once there is no competition? That can't possibly last for a long time. If prices go high enough, surely the industries in the US will spring back up. The pain is temporary at worst.

I think what it shows is a fatal flaw in democracy. I think I read somewhere that if there is an issue that at least about five percent of the population care deeply enough (I don't know the numbers but for example the fanatical religious people in the middle east or pro-birth or pro-gun people in the US) to be single-issue voters, they will have an outsize effect on policy even though their position is bad for a majority of people.


How is the US supposed to even develop the technology effectively if the companies keep going under? Solar technology isn't a commodity, it's high-tech R&D, I don't think it's a temporary pain.

Memory chips used to be high tech RD until not that long ago but afaik the US isn’t producing any of them anymore and one of the biggest players in this market is South Korea through Samsung, a conglomerate which 100% receives State subsidies in one way or another. My perception is that no-one in the US is losing any sleep over this because the people who could be potentially upset by this state of affairs are pretty busy investing their money and time resources in other, more lucrative endeavors.

But trade wars have always relied on demagogy and plain nationalism, and saying stuff like “we should build our own solar panels” when it has been rationally proved that the best course of affairs is to take the money handed on a silver plate to your own consumers/tax-payers and move on to other economic tasks is plain nationalism bordering on isolationism.



What do you mean that nobody in the US is losing sleep over it? If nobody were concerned by it, then it wouldn't be an issue it all. It seems like lots of people, including the current administration and their supporters, are deeply concerned by Chinese subsidies.

While capitalists might have other, better, opportunities, what about American workers who have seen decades of stagnant or declining wages? American workers being constricted to service and tech jobs, and losing the opportunity for manufacturing work? Surely these people are losing over Chinese anti competitive behavior.

In the short term it seems we benefit from cheaper goods. In the long term, the risks are that we lose industries, make ourselves reliant on unfriendly foreign powers, and lose entire categories of productive labor for our workers.

Your comment looks down on nationalism in a way that I think is a bit naive. Why shouldn't Americans be concerned with the wellbeing of Americans? Are the Chinese working for our best interests? Are they working neutrally for the good of all? Or are they working in their own best interests, or the interests of their rulers?

The Chinese leadership should try to do what's best for the Chinese as American leadership should try to do what's best for Americans.


Because everything is gradual.

Solar first, then electric batteries, ...

Soon, the tech is out of our hands and we have no option/big competitors left anymore. They already have a head start with a 1 billion market without any of our competitors


Exactly.

How many economists would argue today that China's independent home-grown software / internet ecosystem was a bad decision?

How many of those same economists were saying 10 years ago that China was only shooting itself in the foot with its protectionist software / internet policies?


>That can't possibly last for a long time.

US antitrust law is motivated by the idea that it will last for long enough to hurt. That's why monopolies are specifically broken up.

After killing all of the competition, a monopoly could threaten to drop prices again if anyone else sprung up. That is enough to act as a deterrent, if you want to find out about the economic arguments before or against, research the history of anti-trust.


> After killing all of the competition, a monopoly could threaten to drop prices again if anyone else sprung up. That is enough to act as a deterrent, if you want to find out about the economic arguments before or against, research the history of anti-trust.

If we want to introduce tariffs, why not wait until we see China PR actually show monopolistic behavior? My gut reaction is that because the US is such a big customer, China PR will not be able to do that.


> The pain is temporary at worst.

To paraphrase the quote "the market can remain irrational longer than you can remain solvent", the pain can remain temporary for a long time.

To go along with the example, it could take decades of subsidies in US solar panel research before the US has anything that can compete with or out-compete contemporary Chinese solar panels on a more-or-less level playing field, in the international market.

Because of US's unwillingness to match subsidies and allowing Chinese solar panels to out-sell them, in this example, they concede decades of industry dominance and the simultaneous ability to acquire state of the art advances (bright minds and new knowledge).


> I think I read somewhere that if there is an issue that at least about five percent of the population care deeply enough (I don't know the numbers but for example the fanatical religious people in the middle east or pro-birth or pro-gun people in the US) to be single-issue voters, they will have an outsize effect on policy even though their position is bad for a majority of people.

It might be helpful to not think about people becoming single-issue voters this way. People become single-issue voters because they see something as crucial, single-issue voters are supremely justified in voting. Also probably not ideal to think of people in terms of partisan dogwhistle labels, but that's a separate issue.


Because once the competition is put out of business the subsidies go away, China gains control of an industry and prices go up. If competition emerges subsidies go back in.

Chinese aren't dumb. They aren't subsidizing exports because they like helping foreigners.


> I could never understand why export subsidies are bad for the importing countries

The best explanation I can give is an inversion of the saying "Give a man a fish, and you feed him for a day. Teach him to fish, and you feed him for life."

If you give a man who can feed himself free fish until he loses those skills, he'll become dependent on you and you'll have power over him.

> And while the Chinese are kind enough to help us pay for their products with their own money we can focus instead on other stuff which we’re really great at building/providing as a service.

The Chinese don't seem to be interested in buying any of that (except farm products and raw materials). They're working on domestic substitutes for high-tech things they do by from the US [1]. Maybe the US pursue a "back to the countryside/back to agriculture" movement to adapt to the export subsidies?

[1] https://en.wikipedia.org/wiki/Comac (state owned) is working on https://en.wikipedia.org/wiki/Comac_C919, for instance.


The main problem is becoming dependent, which allows the situation to turn into an example of bait and switch once the other party doesn't have as much incentive to retain the status quo.

It's bad in the long run. It destroys your domestic industries and they won't subsidize it forever either. It's a lot like how some conglomerates will use profits from one industry to subsidize entry and take over of another and then they jack the prices up when there are no competition in the new industry. Rinse and repeat.

It's a hard balance. Free-traders tend to be find with other governments effectively giving some of their money to the country where the subsidized product is exported to, but as a peer comment noted, this can result in consolodation of the manufacturing of that equipment in the country that is subsidizing. So then in the long run they can raise prizes because they have the monopoly on producing that product.

We see similar behavior with Uber and Lyft today (trying to subsidize the riders to get people on their platform). But this is a government doing it, which tends to have much deeper pockets.


It is basically like this: China sells stuff to USA, USA pays with paper it can produce in infinite amounts.

USA benifits from this arrangement.

There are some more details of course and that adds complexity. But fundamentally it is a simple story.


Forced technology transfers and IP theft.

Sounds like entrenched interests in SOEs forced Xi and Liu's hands. It's not necessarily about IP protection, but state subsidies then.

Agree. Wonder which (if any) subsidies the U.S. is willing to drop in return.

Let me try to write something that may permit and generate fruitful discussion.

Do you think the repeated US copyright-term extensions, widely attributed to Disney, have been good public policy? Patent IP (Industrial Policy;) has lots of knobs and dials (duration, obviousness, scope, FRAND, etc) - do you think their current settings, nailed down by US pharma, are well adjusted to support innovation in other industries, like say tech? Do you think California's severe limits on non-compete employment agreements are bad for innovation? No? Neither do some other countries.

For example, TPP was spun as a free-trade treaty. But it was also sometimes described as bag of multiple treaties. One, free-trade. But also "IP" (copyright and patents). And ISDS. Let's leave the mess of ISDS aside. When the US dropped TPP, it was continued by other countries as CPTTP, keeping the free trade parts, and dropping IP and ISDS. After a time, the US came back with USMCA, forcing their inclusion. Canada was forced to agree to change its laws, to extend its copyright term. Something the US had long tried to force, and Canada had long resisted. The canadian press described it as arm twisting, and coercion. Here are US trade negotiators, acting, at root, on behalf of Disney. Why pay for regulatory capture piecemeal, country by country, when the US provides one-stop shopping for world-wide regulatory capture?

If Russia, with declining oil revenue and growing trade imbalance, but having nukes and bioweapons, forced the United States to permit the mass importation of Russian-provided narcotics, dwarfing the current opioid epidemic, would you be pissed? Yes, the Chinese still are.

But this isn't some vague "trigger" similarity. US trade negotiators, on behalf of the subcultures in which they're embedded, and the interests which determine their positions, are trying to coerce them. As with Canada and others. Maybe China will fold too. Or maybe not. Canada did push back on ISDS.

Call it a conflict of two cultures of corruption. In one, large incumbents do regulatory capture, and use it as moat, to avoid a threateningly competitive and innovative market. In the other, everyone pays off the government, and there's lots of other ugliness, but... there's a ferment.

Current US press coverage of China repeated reminds me old regime Europe writing about the US in 1800's. The US economy and governance and society were really corrupt and messy. And they changed the world. And the world is perhaps fortunate, maybe, that the dismal stagnation of Europe was unable to stifle that.

[Fyi, I'll likely not follow up on comments - sorry, I lose days that way. And this isn't the kind of topic HN does well. But there seemed some significant bits absent from the discussion, at least as of when I started writing this. So I toss it out there, FWIW.]


I think people forgot about China's experience at the hand of the West in the past i.e Opium Wars and how it affects their moves today.




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