Posted on 08/06/2021 3:35:11 PM PDT by sitetest
To Western investors, China’s regulatory crackdown on superstar companies such as Alibaba Group Holding Ltd. , Tencent Holdings Ltd. and Didi Global Inc. must seem suicidal. How better to undercut growth than to kneecap some of the world’s most successful technology companies?
President Xi Jinping would beg to differ. In his estimation, technology comes in two varieties: nice to have, and need to have. Social media, e-commerce and other consumer internet companies are nice to have, but in his view national greatness doesn’t depend on having the world’s finest group chats or ride-sharing.
By contrast, Mr. Xi thinks the country needs to have state-of-the-art semiconductors, electric-car batteries, commercial aircraft and telecommunications equipment to retain China’s manufacturing prowess, avoid deindustrialization and achieve autonomy from foreign suppliers. So even as the Chinese Communist Party unleashes a multifront regulatory assault against consumer internet companies, it continues to shower subsidies, protection and “buy-Chinese” mandates on manufacturers.
Mr. Xi described these differential priorities in a speech published by the party journal Qiushi last year. He acknowledged the online economy was flourishing, and said China “must accelerate construction of the digital economy, digital society and digital government,” according to a translation by Georgetown University-affiliated researchers. “At the same time, it must be recognized that the real economy is the foundation, and the various manufacturing industries cannot be abandoned.”
Historically, as most countries develop, manufacturing displaces agriculture and then services displace manufacturing. In recent decades manufacturing’s share of gross domestic product in most-advanced economies has declined, especially in the U.S. and Britain, which have seen swaths of factory employment migrate overseas, especially to China.
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This is from a few days ago, but I didn’t find it in a search. I thought it was interesting.
Even Communists know what creates economic value.
Making things is real.
The internet is not real. It is all mind manipulation for our money.
Xi, I hate to say it, has it right. Internet-based economic activity: Good, nice to have; Manufacturing (and for the US, agriculture), necessary.
It’s real. And it adds value. But it adds value in the context of tangible goods.
Think of Amazon. It’s one, big Internet software buying/selling system. It’s very valuable. Why? Because it can move a lot of merchandise very fast, very cheaply. Ask any manufacturer, anyone who sells stuff - that is very valuable, and worth a great deal.
But what does it sell? Manufactured merchandise. Outside of the context of tangible stuff, its value isn’t anywhere near as great. The greater part of its value comes from the ability to get stuff, thing, tangible, physical things from seller to buyer quickly and cheaply. But the manufactured stuff is essential to its value.
What does China want?
They should be asking, ‘What do Americans want?
And think of the tremendous economic damage it has done. It has killed off much of the retail sector in the U.S. It makes its huge profits at the expense of the rest of us. Oh by the way, half of the sellers on Amazon are actually Chinese.
I would say that Amazon and Apple have created value for a handful of global elite founders, employees and shareholders (they would create far more value for all Americans if forced to onshore manufacturing and suppliers in the US thru massive tariffs on their Asia-based supply chains).
On the other hand, Google and Facebook which also have trillions of dollars of market value have done exactly zero for production or real economic growth. It’s this part of their Internet that the CCP is looking to put on a short leash.
I agree.
The entire economy of the world is organized to maximize profit for the top of the global elite.
This is why European/American capitalism worked. Its underlying assumption was Christianity, Christian morality.
Just the commandment to pay the worker a just wage is essential to the trust required for a capitalism that broadly benefits society. To withhold a just wage is a sin that cries out to Heaven for vengeance!
As an employer of 36 years, I have always been mindful of that one!
“Even Communists know what creates economic value.”
Except that “our” communists have no clue.
Smart people
This is not an economic choice of China, it’s a strategic one.
If it ever comes to a conflict with China we will see how the USA’s millions of web developers do against China’s millions of steel workers.
Steel and manufacturing wins wars. Writing JavaScript does not.
They’ve said that anyone with an IQ below 83 cannot produce more than they consume. I believe with advances in automation, that number is rising fast. Look at car factory floors — no people! There was a time when 90% of people were employed in agriculture, now it is well below 10%. The same will happen to manufacturing. The same will happen to food service. The same will happen to retail. If you have an IQ below 115, you are going to consume more than you produce. I expect the trend will continue with professors, lawyers, doctor, etc all becoming obsolete.
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