Maybe their strategy will pan out, but generally any economy which critically depends on a restless and despondent class of basically slave labor (and, in some cases, actual slave labor) isn't going to sustain itself. As they said in Silicon Valley (the HBO show) like 8 years ago: "There's no New Bangladesh; there's just Bangladesh."; China's population wants upward social mobility in a way that's basically just westernization. On the flip side, they have a government that wants the economic benefits of a cheap labor pool, they want to be a cheap western manufacturing destination, and they have the surveillance and police state to push the issue further than western democracies would; a scary combo.
The other unrelated point I try to impress on people: You can assert that China's lead in manufacturing solar panels, batteries, etc is indicative that they're "ahead" of us, or whatever. You sure? I don't know what job you have right now, but the US was a destination for high tech manufacturing many decades ago. We largely moved past that. We make poorer countries do that for us now. How is it desirable that America become better at, I don't know, mining lithium? Are those jobs that we want our population to have? Versus what are clearly higher-margin email jobs? China manufacturing solar panels to sell us is our benefit, their expense; their economy is built on attaching a 2% margin on physical goods, ours is attaching a 200% margin on services, software, and financialization we build on top of those physical goods. Every economist on the planet would agree, you want to live in the second one. Lithium mines suck. Assembly lines suck.
But even looking beyond that: The US has an unemployment rate of like 3% right now. You can open the world's biggest solar factory out in Iowa; good luck finding workers to staff it. The US is not "behind" on manufacturing; we LEFT it behind, for good reason.
> Do you think if that dam breaks, US auto makers come back to planet Earth instead of chasing what seems to be exclusively high-margin cars only affordable by credit?
It doesn't seem to me like the problems that the automotive world are going to face over the next five years will be isolated to US manufacturers; its going to be global. Its going to get harder to financially-engineer your way to higher margins and revenue. That means prices need to come down. But, prices are higher because consumers want these nicer cars, nicer materials, there's a lot of cost in mandated safety features and safety engineering as well, not to mention all the export controls and tariffs Trump is threatening. So, how do they get cost down? That's the challenge.
The other unrelated point I try to impress on people: You can assert that China's lead in manufacturing solar panels, batteries, etc is indicative that they're "ahead" of us, or whatever. You sure? I don't know what job you have right now, but the US was a destination for high tech manufacturing many decades ago. We largely moved past that. We make poorer countries do that for us now. How is it desirable that America become better at, I don't know, mining lithium? Are those jobs that we want our population to have? Versus what are clearly higher-margin email jobs? China manufacturing solar panels to sell us is our benefit, their expense; their economy is built on attaching a 2% margin on physical goods, ours is attaching a 200% margin on services, software, and financialization we build on top of those physical goods. Every economist on the planet would agree, you want to live in the second one. Lithium mines suck. Assembly lines suck.
But even looking beyond that: The US has an unemployment rate of like 3% right now. You can open the world's biggest solar factory out in Iowa; good luck finding workers to staff it. The US is not "behind" on manufacturing; we LEFT it behind, for good reason.
> Do you think if that dam breaks, US auto makers come back to planet Earth instead of chasing what seems to be exclusively high-margin cars only affordable by credit?
It doesn't seem to me like the problems that the automotive world are going to face over the next five years will be isolated to US manufacturers; its going to be global. Its going to get harder to financially-engineer your way to higher margins and revenue. That means prices need to come down. But, prices are higher because consumers want these nicer cars, nicer materials, there's a lot of cost in mandated safety features and safety engineering as well, not to mention all the export controls and tariffs Trump is threatening. So, how do they get cost down? That's the challenge.