freediver wrote on Aug 28
th, 2024 at 6:57am:
You are assuming the CCP is acting rationally. Or at least, in an economically rational manner. It isn't. They have dirt poor Chinese laborer's working in a factory for 50c a day to make these EV's so that wealthy Chinese, and even wealthy foreigners can get them at a significant discount. Maybe even half price.
The CCP has put the brakes on the Chinese economy, slowing and possibly reversing what was until about ten years ago some impressive economic growth, stemming from a rapid transition from starvation communism to market based capitalism.
I expect the CCP is looking at internal politics here. They have long abandoned communism, and the "communism with Chinese characteristics" BS is just an attempt to save face while they become the very people that the CCP spent a century and millions of deaths trying to eradicate - capitalist swine. The fundamental problem is that capitalism is essentially economic freedom, and it is hard to give that to people without also giving them all sorts of other rights, freedoms and democracy itself. Again, the CCP stooges on here rant about how terrible democracy is, but the CCP is internally democratic.
So, the CCP is walking the knife edge between giving the Chinese people enough freedom to make the country somewhat wealthy (and the CCP powerful enough to project power externally) and giving them the tools to get rid of the CCP, which has been nothing but a blight on the Chinese people. The CCP has killed more of its own citizens than any other government in the history of the world. Only about 20% of those deaths came from the war in which the CCP seized control of China. Most arose from communist policy, lies, and sheer incompetence on the part of the CCP. Like the Great Chinese Famine, or more recently, mismanagement of the initial covid outbreak.
I suggest that western countries, instead of fearing this one, take advantage of it, and let the Chinese subsidise our electric vehicles. Maybe not the military ones, but passenger ones at least.
It is not a loss leader. We are not going to go to China because the milk, bread and EV's are cheap, and then purchase the steak, laundry powder and apples while we are there.
It is not a cunning plan to seize control of the industry, either for future military gains or even economic ones. The auto industry used to stick around for generations. Not any more. First Japan, then Korea, and now China started new auto industries at an astonishing pace, only to be overtaken by the next player. 100 years ago passengers cars were leading edge western technology. Now they are more on the basket weaving end of the spectrum, with the economics driven largely by cheap labor.
The best thing the CCP could do for China's auto industry (and the hip pocket of car buyers here) is destroy China's economy yet again, so the people will work for only 20c a day. They may well do it. Do not make the assumption that the CCP's interests are the same as the interests of the Chinese people. They are not. It is something that people in western countries might take for granted. Our governments have been selling out individual people and industries since the 80's, including the auto industry. Not because it is in their narrow self interest. It is a vote loser. Rather, because it is in the national, and even international interest (trade agreements) to do so.
The CCP will happily kill 100 million Chinese people in order to stay in power, and once they gain power, to exercise the whim of their leader. They have done it before, and may well do it again. They did it recently with covid, and for the last decade or so they have been sacrificing China's economy in an effort to maintain that grip on power. Let them do it. It is to our benefit. It is too the benefit of China's poor. And the CCP will inevitably discover, if it hasn't already, that rich people are more likely to open their eyes and ask difficult questions.
Some good points, but I don't really believe the Chinese economy will "collapse" because the government subsidizes cars. People said the same thing about the govt subsidizing steel, and cars have a much better economic multiplier than steel does. There are hundreds of components, made of an array of different raw materials, and they'll all be paid for somehow.
If government subsidy one major product type led to economic collapse, the US economy would be in deep trouble with the overpayment of arms manufacturers. That never happened, because hi tech spending has a good multiplier.
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