I assume this doesn’t apply to Chinese parts used to manufacturer electric cars in the EU
I’m so confused here. I was under the impression that the entire argument for capitalist markets was that they produce cheaper and better goods than is possible to do with central state planning. Yet, here we have the capitalist west complaining that Chinese state driven model if producing goods that western companies are simply not able to compete with. Somebody help me understand.
They tend to be more efficient. However central planning in China which ramped up production yet has reduced demand, means an excess supply.
So, selling to Europe or USA makes sense to offload that supply. In a capitalist, closed system, they would have ramped down production, but also wouldn’t have had the capital to ramp up production so quickly.
If they weren’t seen as a strategic asset, then Europe and USA wouldn’t care that China is subsidizing cheaper products. They dont want their car industries dead as then they are dependent on China.
They tend to be more efficient. However central planning in China which ramped up production yet has reduced demand, means an excess supply.
That doesn’t really follow. You’d have to explain how you think ramping up production led to reduced demand exactly. Meanwhile, it’s not excess supply if you have customers around the world who want your product.
In a capitalist, closed system, they would have ramped down production, but also wouldn’t have had the capital to ramp up production so quickly.
That sentence doesn’t make sense. Companies don’t voluntarily ramp down production under capitalism.
If they weren’t seen as a strategic asset, then Europe and USA wouldn’t care that China is subsidizing cheaper products. They dont want their car industries dead as then they are dependent on China.
I think you missed my point here. It’s fine for the US and Europe to want to keep their industries alive. However, what we’re seeing is that they are not able to compete with state driven planning using capitalist markets. So now they’re starting to engage in non market behavior of putting tariffs on Chinese goods because capitalism is not proving to be competitive.
Ramping up production didn’t reduce demand. Demand reduced due to a softening Chinese economy, mainly due to debt and housing.
I agree, it’s not excess supply when you can sell it overseas. However, its also not central planning when you wanted to Ramp up supply for domestic consumption but end up using capitalism to keep efficiencies.
Companies ramp down production all the time. What do you think redundancies and factory closures are for? They react to market conditions or seek new markets (as happened in this case).
I thinknyouve got it backwards. Central planning can efficiently produce anything. As in, it can make as much of a product at the cheapest price as possible. The problem is central planning is less efficient at deciding how much is needed. It will often over or undershoot. Thats what happened here. Tonsaybthey can still sell overseas, so its still central planning being efficient is incorrect. Central planning didn’t work to produce the needed amount so trade through capitalism is being used to improve efficiency of the capital used.
Ramping up production didn’t reduce demand. Demand reduced due to a softening Chinese economy, mainly due to debt and housing.
There’s not much indication that the Chinese economy is actually softening. Also, not sure what debt from housing you’re talking about. 90% of families in China own their home. What’s more is that 80% of these homes are owned outright, without mortgages or any other leans. https://www.forbes.com/sites/wadeshepard/2016/03/30/how-people-in-china-afford-their-outrageously-expensive-homes
Pretty much the only people losing money on housing are investors, many of whom are foreign.
I agree, it’s not excess supply when you can sell it overseas. However, its also not central planning when you wanted to Ramp up supply for domestic consumption but end up using capitalism to keep efficiencies.
It absolutely is central planning when the state decides on the overall direction of the economy. The state doesn’t need to micromanage the details of the economy any more than your brain needs to consciously micromanage every muscle movement when you try to walk. The state wanted to create a lot of housing for people to live in, and that was accomplished. Now, the state is directing the economy to wind down real estate and transition to high tech which is happening.
Companies ramp down production all the time. What do you think redundancies and factory closures are for? They react to market conditions or seek new markets (as happened in this case).
Companies don’t do that voluntarily, they do it when they’re in a financial trouble. Meanwhile, thanks to brilliance of capitalism there are very few redundancies left. Everything is just in time economy, that’s why a single ship getting stuck in Suez Canal can bring the world economy down.
The problem is central planning is less efficient at deciding how much is needed. It will often over or undershoot. Thats what happened here.
Except it’s not what happened here because as you yourself admit there is global demand for the goods that China produces. Overshooting would be producing goods that nobody wants.
Central planning didn’t work to produce the needed amount so trade through capitalism is being used to improve efficiency of the capital used.
It’s just regular trade between countries, it has nothing to do with capitalism and predates it by a wide margin.
And I’m sure those Chinese workers definitely have the same compensation and rights as American or European workers.
having morals is a skill issue that leads to higher operational costs
If only there were international organizations that could enforce standards. Like the WTO for example.
Capitalists hate capitalism. Competition is so irritating, because someone might undercut you. (And other people would cheat to win, just like you would, so you can’t ever relax.)
@yogthos @geneva_convenience These tariff rates are calculated on a per manufacturer basis based on the subsidiaries that these manufacturers receive from their country. So it just restores the competition.
Chinese brands aren’t receiving 45% subsidies last I checked. However, this would be a dumb way to try and restore competition since it just punishes consumers in Europe.
Consumers need to wake up. I’d rather pay a lot more for my car rather than: A) rely on Chinese people exploitation on low pay and no work rights B) no environment protection in China C) generally lower quality D) killing jobs in Europe E) making Europe depend on China When capitalism is distorted, then the state must intervene
@geneva_convenience It’s exactly the same that also happened several years ago between the US and the EU concerning civil planes. Here Boeing and Airbus compete against each other - and the US had the assumption, that the EU subsidized Airbus so that Boeing couldn’t compete. Because of that the US thought about tariffs that would have countered this.
Once again ordinary people in the West are saved from affordable, low-pollution living, and Western companies are saved from having to compete.
That’s catchy, but not entirely true.
China heavily subsidizes EV manufacturers (and production in general), plus they have cheaper environmental and labour standards… it’s not like there’s a fair market EU companies can compete in without some sort of handicap.
PS: Yes, “western” countries have been playing along with China’s deliberate long term strategy with full awareness of where it would lead, but that’s another story that is both much older and has a much broader scope than the EV industry.
China heavily subsidizes EV manufacturers (and production in general)
And that’s a bad thing? Any sensible government is going to subsidise renewable energy and electric vehicles. It makes both economic and environmental sense. Anyone not doing this is an idiot and a climate terrorist.
You cherry picked his argument and left out the rest where he states China’s as cheaper standards of environmental “friendliness”
Because (1) lithium contamination is a much, much, smaller problem than climate change and (2) we shouldn’t let perfect be the enemy of good. Of course, if the EU is combining taxes on EV import with an equivalent investment in public transport or cycling / walking infrastructure, I wouldn’t be complaining.
Subsidizing sales of EVs (ie. I pay for my neighbor’s new EV because I want cleaner air) does make environmental sense.
Subsidizing production does not have the same positive environmental impact, mainly because factories in China pollute more than factories, say, in the EU (due to different environmental laws), but also because moving finished products from China to the “west” obviously pollutes more than moving just those components that would need to be sourced from China anyways (eg. batteries).
As for the “makes economic sense” part… IDK: I guess that mainly depend on your political stance.
Personally, I don’t like that both sales and production subsidies have the effect of moving money from the poor to the rich, but other people may focus on different effects (eg. more production = more jobs) and support subsides.
In case you wonder: my take is that, instead of incentivizing adoption and production of EVs, one should disincentivize internal combustion vehicles by adding taxes to them (which, in a sense, aren’t really taxes but just charging for the very real environmental costs society as a whole will have to pay for your shiny SUV).Anyone not doing this is an idiot and a climate terrorist.
You should really think twice before spewing judgements… and also avoid misusing words like “terrorist” because, when misused this way, it only conveys that you don’t like someone, dulling your message instead of strengthening it.
Subsidizing production does not … from China anyways (eg. batteries).
I’m asking why the EU isn’t subsudising their domestic EV industry and starting a competition in electric propulsion technology. That would benefit everyone, except maybe the oil lobby.
one should disincentivize internal combustion vehicles by adding taxes to them
Why not both? And preferrably better subsidies for public transport / cycles / footpaths, etc.
avoid misusing words like “terrorist” because, when misused this way
If killing a handful of people is terrorism, what would you call trying to kill the entire human race (along with thousands of random other species)? ‘Terrorist’ is, if anything, too mild a word to describe such filth.
Can you explain to us what the problem with China subsidizing EV manufacturers is exactly? That’s how China chooses to run their economy, and it’s entirely their business. The whole argument for capitalist markets is that they’re supposed to be more competitive last I checked. If that’s not the case then maybe the west should reexamine its assumptions about how an economy should be run.
https://en.wikipedia.org/wiki/Dumping_(pricing_policy) (it’s not limited to EVs)
Dumping is when you sell things below cost to drive competition out and then jack up the price once you achieve a monopoly. What’s happening here is that China simply produces things much cheaper than the Europeans. It’s not limited to EVs.
@yogthos @gomp It’s the capitalist textbook example, to conquer a market by undercutting prices and to crush competition in that market that cannot compete - and to later increase prices when there is no more competition. You can see this all over the world, not only with China an EVs, but also for example with Uber and the taxi business or Europe with their food exports to poorer countries outside the EU.
China is already dominating lots of markets, and what you’re describing isn’t happening. For example, pretty much all solar panels are produced in China, and they’re still dirt cheap today.
They do this in an attempt to take over other markets.
If nothing else, they help get their brands into the world.
There’s loads of chinese EVs driving around where I live now, so based on anecdotal evidence, it’s working.You mean just like every other country?
Is the US subsidising EVs? The EU? Anyone else?
Other than that, sure.Yeah, US massively subsidizes Tesla, are you seriously so ignorant not to know that?
China heavily subsidizes EV manufacturers (and production in general), plus they have cheaper environmental and labour standards… it’s not like there’s a fair market EU companies can compete in without some sort of handicap.
Hah. Volkswagen is in trouble right now because they fucked up the transition to electric cars completly. What do you think will happen now? That’s right, we the (German) people will have to save them now, with our money. Basically the same shit as a subsidy, just later in the process. Kinda like what the Chinese do, just the really stupid way.
Oh, and of course, it will be everybody’s fault but their own.
This is the market place, brah. If the US or EU want to keep up, they can subsidize EV manufacturing to the same degree. We are just too stuck on subsidizing O&G to realize that harvesting value from a dying industry is going to leave us out in the cold as the new technology matures.
Free market capitalism and what we operate under haven’t been the same thing for as long as I’ve been alive. What some may call “Communist China” is beating us at the game. Get on the bus or get run the fuck over.
This is the market place, brah.
…
Free market capitalism
then talk about subsidies or non capitalist country controlling the currency, markets, VCs, etc.
What does that even mean?
I did… that was the part about extracting value from a dying industry.
If the US or EU want to keep up, they can subsidize EV manufacturing to the same degree
You can’t allow dumping-inducing subsidies without also allowing defensive tariffs, otherwise the richer and more authoritarian countries, which have greater capacity for subsidies and greater ability to concentrate them in specific sectors, will easily kill foreign competition and establish monopolies.
I feel like we would need to utterly destroy the working class to the point that cheap Chinese EVs would become expensive if we were to compete at the same level. I could be wrong, but how many of the chinese workers are driving brand new evs?
Western manufacturing tends to be much more automation heavy. Chinese manufactures don’t bother with buying a $100k machine that can make a car part when they can just hire 10 guys at $10k/yr to make that same part with a $50 drill press and some hand files.
It’s not that it all strictly balances out, but if we actually gave a shit we could potentially be cost competitive for a lot of price brackets, especially given the costs to move whole ass cars across the Pacific.
Bear in mind these sub $10k Chinese EVs are not something US consumers would really be interested in buying, they are basically tiny car shaped golf carts with extremely minimalist feature sets. Think ‘no audio system at’ all type interiors.
Western manufacturing tends to be much more automation heavy.
bruh https://www.statista.com/chart/31337/new-installations-of-industrial-robots-by-country/
they can subsidize EV manufacturing to the same degree
Meaning that we would either have to increase tax rates or borrow more money? Wow, what a great solution.
Or not subsidize oil and gas to the tune of ~$20 billion/yr and corn at $2.2 billion/yr and redirect that towards EVs.
Yeah I find it a ridiculous parallel I recently saw an article that put a number on Chinese EV subsidies and it seemed extremely low compared to the barrels of money we’ve been giving the oil companies.
Last I checked US prints money like there’s no tomorrow for shit like wars, but as soon as it comes to subsidizing something actually useful all of a sudden the concern trolling starts.
It is massively clownish though because as the barrier to entry goes up higher everyone will just switch to micromobility which is built mostly by the Chinese
Competition is good! Unless it makes shareholders sad.
Slave labor will undercut fair wages every time. The point of the tariffs is to prevent China from setting the expected price of EVs to be too low for fair wage companies to compete, and defining a slave labor standard for the industry.
Despite what many commenters say, this is a good thing.
Slave labor is a system in which a person is bought sold and indentured to a master for a substantial duration, often life. Their labor is coerced as property of that master.
That is not how China produces cars. They use highly automated systems and paid workers like everywhere else. While Chinese workers are paid less due to the forces of unequal exchange (a system imposed by the US) and an export economy (a system usually imposed by the US but more of a 4D chess move by China to develop productive forces, with the US gladly taking the deal for exploitation), that is not really why the cars are so much cheaper. It is because China has highly concentrated industry and a much less financialized system.
Speaking about “fair” is amazing in this context. The US is simply trying to protect domestic monopsony industry and to damage Chinese industry. This is a jingoistic and corporate policy.
Were talking about labour laws in the EU, not the US
That’s true but the logic applies. The EU is part of the imperial core that eats from that trough and in turn supports its maintainer. It is simply following the US’ lead.
Labor conditions in the EU are better than in the US and better than in China
Depends on which part of the EU you are in. There is a reason the poor of Poland move to places like the UK.
Though this is neither here nor there as the original allegation was slave labor, which is simply a lie.
My not American wage has me with less and less buying power with each passing year.
Do you loose all your savings and fall into years of debt if you have to spend a week in the hospital?
No but that’s also not the point being made here lol
Chattel slavery is different than indentured servitude. There is no ownership of the indentured servant, but they are forced to work against their will. This is the slavery found in Xinjiang, as well as the US penal system.
I didn’t mention chattel slavery or indentured servitude. There have been slave economies outside the American colonies / the United States.
There is no evidence of slavery in Xinjiang, though there is a network of propagandists tied to Adrian Zenz, the US State Department, and the Australian equivalent who make dubious claims.
Maybe not hardware, but practically all textiles in China are made with Uyghur slave labor. That would include upholstery.
https://www.state.gov/forced-labor-in-chinas-xinjiang-region/
Already responded to this one comment over.
I love how people still peddle US state propaganda unironically.
This. Chinese workers cannot legally form a trade Union.
what are you smoking https://www.reuters.com/world/china/how-unions-work-china-2021-09-02/
They can’t form new trade unions because everyone already has to join a registered trade union.
And that trade Union serves the interests of capital. Try to form your own that fights for the workers, and you’ll get locked up. Its literally illegal.
Source?
Of course not, they don’t want that pinko communist nonsense affecting the economy.
oh yeah, the land of “free market” …
Has the EU “champoined” free markets? I assumed that was more of a US buxzword.
Great news for EU auto workers!
Ofc. Electric cars are here to save the auto industry, not your health, safety, neighborhood, sustainability, kids, etc. #bancars
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Politicians be like
is this the famous “invisible hand of the market”?
Is your argument pro market regulation or against market regulation or just there to stir up shit?
The EU is a heavily regulated market economy. Broadly that creates better outcomes and higher levels of happiness for its citizens.
Yay, no punishment for the european brands. What they were doing, slept?
Germany is upset about this because they sell cars to China. This will probable create Chinese counter tariffs on European cars.
Germany oligarchs are imbiciles who cornrred German economy into being a Russian pappet…
When Merkel was advised about these risks by us and Poland, we were mocked within Germany is “old idiots”
Now these same elites are hoping Ukraine shot blows over so they can go back to sucking Putin’s dick for gas.
Germany was so unreliable that US had to blow that fucking pipeline to send a msg to the German nazi napo baby regime.
Can’t make this shit up… European geopolitics are still as clown as ever.
Dead Ukrainians is a small price to pay for cheap gas!
Russian gas was a cheap way for Germany to produce. The short term economic effects were more important to Merkels electability than any long term plans.
When it comes to gas, Russia never shut off the tap. Instead it was America who blew up the Nordstream energy supply to garner support for a wider war. But now China is producing on cheap Russian gas
At least Germany appears to heavily invest in green energy since Norstream blew up. Bless the sun for shining everywhere.
We did not blow up nordstream.
If we had 1/10th of those balls the world wouldn’t be in this shape, I wish to God we had.
Germany is in for 2 lost decades, shutting down nuclear was a mistake, but energy isn’t the only issue, Germany needs more workers or they need to fully commit to automation, which they haven’t quite yet.
China is now crippled with Russia as an ally. That’s about the best strategic success you can expect in IR, take the win.
I know the propaganda went really hard for a few years. But everything now points to the CIA.
https://www.ft.com/content/d60ae893-c251-4693-ac75-4133bb05b2d1
And more recenly
Your second link agrees with me, it was Ukraine. The mad fuckers pulled it off, we might have helped but even that is more than I’d imagine, our administration is timid AF when it comes to Ukraine and any kind of direct or even covert action.
I get why you’d be furious, but they were defending their homeland, and let’s be honest, yours too, if Ukraine had fallen Putin and Xi would have felt they could ask for a lot and we know how that road goes.
I fully support Ukrainian independence but it is being used as a proxy war between the US and Russia right now. They went from a Russian dictator in 2014 to Zelensky now.
America vetoeing the 2022 peace talks to send more Ukrainians into the meat grinder tells it all. At some point a diplomatic solution must be reached. Support is already fading and the only thing this prolonged war has achieved is the death of more Ukrainians and Russians (and profits for Raytheon)
Creating an economic incentive is known for sane country leaders to hesitate to attack their business partner. Sadly Putin isn’t sane.
because they sell cars to China
For how much longer? Can German cars even still compete with the Chinese, or has that ship sailed already? Come, buy the best engineering of yesteryear! Yay!
