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Preparing for the Second China Shock - Krugman - Printable Version

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Preparing for the Second China Shock - Krugman - Fritz - 06-18-2024

gifted

Preparing for the Second China Shock


Re: Preparing for the Second China Shock - Krugman - cbelt3 - 06-18-2024

What a lot of people forget is that “dumping” is a violation of international trade treaties. And the imposition of tariffs is legal and expected when dumping is proven. While a certain bombastic leader applied tariffs with a broad brush as a matter of ego, every single US leader is obliged to enact tariffs when it is justified.

And finally, my personal thesis is that global trade produces a leveling of standard of living. Chinese standards have risen, US standards have dropped.


Re: Preparing for the Second China Shock - Krugman - sekker - 06-18-2024

Thanks for the gift link, the article is interesting in several aspects including his own mea culpa.

I've watched China 'hide' their major support of two industries for more than a decade - biotech and EVs.

In both cases, the Chinese government has given away early-stage space, support and sometimes real $$ to startups in these areas. They made it at least 5x cheaper to get going than even in the best areas of the US.

The Chinese government would not ask for ANYTHING in return - nothing on the books, no equity etc. No paper trail AT ALL.

So what, you say? Well, even those early costs in the US represent a cost that has to be recovered for those early investors to make $$ back. As those are the earliest investors, the cost to return will be often 10x or more down the road.

That entire 'cap table' is largely absent from Chinese competitors.

A second example is IP protection. In biotech, Chinese companies just really do not care about Western IP. They make their copy-cat drugs or tests, developed using governmental subsidies, and then sell to Chinese consumers without paying any legal expenses (which can be 25% or more of a biotech budget) or, even more important, spending the time worrying about patents and licenses.

So, we are where we are because the first phases of the development of these companies is NOT on the books for these companies. So they can pretend to be 'competitive' because their true costs are not included. And I have not even added issues like lower costs due to pollution controls etc as well.


Re: Preparing for the Second China Shock - Krugman - Tiangou - 06-18-2024

I'm glad that in principle Krugman advocates against right-wing politics and the former Trump administration in specific, and it's nice that he supports the current president.

But his rationales these days are often specious, and on top of that it looks like the Times did a bit of a chopping job on this piece.

I don't see that his endorsement of the Biden tariffs is a meaningful contribution to the conversation.


Re: Preparing for the Second China Shock - Krugman - Fritz - 06-18-2024

he's covering ground that might otherwise not be so specific.


Re: Preparing for the Second China Shock - Krugman - Carnos Jax - 06-19-2024

This is something I agree with, we don’t need to lose our auto industry to the Chinese. Biden’s taken some admirable steps in this regard, but the government probably needs to do more….maybe step in and subsidize mining and processing of raw materials for battery production (because that’s where the battle will be won or lost)


Re: Preparing for the Second China Shock - Krugman - sekker - 06-19-2024

Carnos Jax wrote:
This is something I agree with, we don’t need to lose our auto industry to the Chinese. Biden’s taken some admirable steps in this regard, but the government probably needs to do more….maybe step in and subsidize mining and processing of raw materials for battery production (because that’s where the battle will be won or lost)

Not just processing raw materials, but how to construct these new batteries. We need real deep tech, but I do not think we've been investing all that much in either area.


Re: Preparing for the Second China Shock - Krugman - Carnos Jax - 06-19-2024

sekker wrote: ….but how to construct these new batteries. We need real deep tech, but I do not think we've been investing all that much in either area.

I’m afraid you’re right.


Re: Preparing for the Second China Shock - Krugman - Fritz - 06-19-2024

we don't want to lose any industry to gina.
especially energy storage.
I see it as the root of planetary equality & survival .


Re: Preparing for the Second China Shock - Krugman - mrbigstuff - 06-19-2024

well, when China moves more of their residents into African countries to do more of the work, and those workers start reproducing (with their own kind), and eventually outnumber the indigenous populations, then they will be in a good position to run the natural resources monopoly.