- cross-posted to:
- economics@lemmy.ml
- worldnews@lemmygrad.ml
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I love how they keep trying to frame it as a problem with the Chinese model and subsidies as opposed to asking what prevents other countries from doing the same. Seems to me that the real question is why western countries aren't able to compete with China on price and quality of products. It's as if the market model the west keeps peddling is being proven to be far less efficient than state driven central planning.
US corps get more than 3x the subsidies than Chinese companies. The problem is they use this cash for stock buybacks rather than investment.
And that’s direct subsidies only, not counting rebates and tax concessions which are an order of magnitude greater. US companies are extremely coddled and subsidized.
Libs: "but but but ebil SeeSeePee is doing uncompetitive subsidizing!!!!"
Just as an aside do you have a source for that? It'd be good for dunking on libs that think that they're being more "fair" in their so-called free market
https://www.hoover.org/research/welfare-well-how-business-subsidies-fleece-taxpayers
And fuck I just realized this article is from 1999 so it is probably closer to a trillion now
There's an incredible talk from Jake Sullivan talk where he admits that the whole free market bullshit they've been promoting can't actually compete with what China is doing. It's an absolutely amazing read. Some choice quotes from it:
last few decades revealed cracks in those foundations. A shifting global economy left many working Americans and their communities behind.
The People’s Republic of China continued to subsidize at a massive scale both traditional industrial sectors, like steel, as well as key industries of the future, like clean energy, digital infrastructure, and advanced biotechnologies. America didn’t just lose manufacturing—we eroded our competitiveness in critical technologies that would define the future.
He also opined that the market is far from being able to regulate everything, and "in the name of overly simplified market efficiency, entire supply chains of strategic goods, along with the industries and jobs that produced them, were moved abroad."
Another problem he identified is the growth of the financial sector to the detriment of the industrial and infrastructure sectors, which is why many industries "atrophied" and industrial capacities "seriously suffered."
Finally, he admitted that colonization and westernization of countries through globalization has failed:
Much of the international economic policy of the last few decades had relied upon the premise that economic integration would make nations more responsible and open, and that the global order would be more peaceful and cooperative—that bringing countries into the rules-based order would incentivize them to adhere to its rules.
Sullivan cited China as an example:
By the time President Biden came into office, we had to contend with the reality that a large non-market economy had been integrated into the international economic order in a way that posed considerable challenges.
In his opinion, all this has led to dangerous consequences for the US led hegemony:
And ignoring economic dependencies that had built up over the decades of liberalization had become really perilous—from energy uncertainty in Europe to supply-chain vulnerabilities in medical equipment, semiconductors, and critical minerals. These were the kinds of dependencies that could be exploited for economic or geopolitical leverage.
Today, the United States produces only 4 percent of the lithium, 13 percent of the cobalt, 0 percent of the nickel, and 0 percent of the graphite required to meet current demand for electric vehicles. Meanwhile, more than 80 percent of critical minerals are processed by one country, China.
America now manufactures only around 10 percent of the world’s semiconductors, and production—in general and especially when it comes to the most advanced chips—is geographically concentrated elsewhere.
At the same time, according to him, the United States does not intend to isolate itself from China.
Our export controls will remain narrowly focused on technology that could tilt the military balance. We are simply ensuring that U.S. and allied technology is not used against us. We are not cutting off trade.
Maybe spending a trillion dollars a year on the military instead of investing in productive capacity is a bad idea
What makes it funnier is that much of the military procurement ends up being ultimately sourced in China as well.
nah this allows the easy MIC QA service grift of employing leagues of contractors to verify that China hasn't snuck anything into all the military stuff we buy from them
the line about China 'suffering' from overproduction over the past few years is just golden... sure seems like they're suffering hard doesn't it?
folks we're gonna produce so many goods and build so many means of production your gonna be begging me , "please xi, stop building productive forces, we cant take any more" but no folks i have to do it, i have to keep making them folks
Be fair. The Chinese model is only strategically planned centrally. The tactical product decisions are still mostly market driven.
Edit: Apparently I need to be more clear. The ensuing bloodbath in the comments was funny to wake up to, though.
Yog's comment included a line about how the West can't compete on price nor quality. As far as I know, China's 5-year plans, its model for SOEs and its integration into private companies, and its strategic allocation of resources have little to do with the quality of goods being exported. I could be wrong, but I haven't seen quality control being part of the 5-years plans. I haven't seen the application of statistical process controls being driven by central planners. This seems to have been done by private enterprise under the Chinese model.
Yog's comment seemed to indicate that it was central planning that resulted in these outcomes.
My point is that central planning chose which aspects of production to leave up to private enterprise and market dynamics. As much as China is a living experiment in scientific revolutionary communism, it still has a stock market because, as we know, the transition through industrialization has never historically happened without some form of market economics (even the USSR had the NEP for this purpose).
SWCC is not capitalism, but it uses market forces to solve a large number of production puzzles, within the boundaries of the 5-year plans and, on a larger scale, within the boundaries of a scientific revolutionary state.
No one here freaks out when I say the communist state of China is still a state and it hasn't yet withered away, but everyone gets all hot and bothered when I say lots of China's production is solved by markets.
What else do I need to say?
- I am not wisconcom
- I am not an ultra
- I am not a Hoxhaist
- I am not a Marxist-Leninist-Maoist
- I was raised a lib and live in libland so I may have some lib patterns, but seeing China as capitalist is not one of them
- Y'all are funny
The goal of my comment was to push us to be more nuanced in our positions. China's production quality no doubt benefits from central planning, but drawing a direct causal line between central planning and product quality in China is going to be difficult. Libs will push us into a research hole saying that the companies with good quality are not SOEs, that the company COOs are not party members, or whatever, and it's just not worth it.
I also think that we need to be careful about the concept of "subsidies" and the export price of things. My understanding of Chinese state investment is just that - it's investment. That investment likely doesn't have 20% returns on it, and THAT'S something to dig into when we argue against the Western model. Finance capital in the West is problematic, but when you look at the physical mechanisms, China is making financial investments, so libs will be confused as to what the difference is. And part of the answer is that state investments don't carry the same burden as market investments. Another part of the answer is that state investments are based on a central plan understanding of national development instead of finding market inefficiencies (like the Western model).
Anyway, keep it real.
what a hilariously unironic "um, akshually, sweaty," comment
"Um actually the Chinese Hive Mind in Beijing doesn't direct the actions of every facet of the economy like TRUE central planning would do" lollllll china keeps winning
The "be fair" bit comes off as quite libbish and not making a real point, it smacks of "um china is actually capitalist" because they misunderstand that dengist market reforms haven't changed the subordination of the bourgeoisie in China to the CPC which they constantly demonstrate (most basedly when they execute a corrupt billionaire). Like who cares about some arbitrary strategic/ tactical dichotomy?? China stay winning
Yeah it didn't really come off as being a lib comment though, definitely a bit of an overreaction
Black_Mald_Futures also seems to be quite drunk today judging by their other comments 🗿
we are reaching dunk levels that were never before thought to be so powerful
I interpreted it as a Soviet exceptionalist take as in "Real communism is when the entire economy is planned using Excel, anything else is just sparkling socialism."
what makes china different is that they are controlled by a communist party.
Concretely, what difference is this, though? That it's more democratic and thus the way it directs its comparable level of oversight is more pro-social?
Concretely the difference is that the economy isn't run for the benefit of landlords and oligarchs. Xi's common prosperity, anti-corruption and modernisation campaigns have been run smoothly and successfully because the CPC faces no significant internal coercion from the bourgeoise.
I think the initial misunderstanding can be explained by how weird capitalism has gotten.
The initial point being made is that 'the market model the west keeps peddling' is less efficient than 'state driven central planning'. To counter that with 'to be fair, China doesn't just rely on central planning' is, I think, a fundamentally wrongheaded way to go about it. It assumes that the market model proposed in China has anything to do with the market model proposed in the west. They are completely different models. Precisely because the state planning (which is not just central, political power and action in China is, as it historically has been, also very decentralized) is done under a communist party.
The market model of the west is a form of romantic capitalism which can be deemed libertarian. It has no empirical basis in the history of capitalism or the industrial age. It is nothing more than an excuse to financialize and speculate away while production and transportation chains rot. There has been other forms of capitalism. The american school, the german school, developmentism, colonialism, and so on. All of them concerned themselves with more than just the interests of virtual capital speculation. That the japanese and the south koreans were once closer to China than the washington consensus simply places them in that historical spectrum.
this is the natural evolution of capitalism
Because that is not what I am describing. One thing is the logical conclusion of the economic system. Another entirely is the worldview which sustains said system.
Regardless, I don't think freagles comment actually disagrees with anything else in your comment.
Nor does my comment disagree with the people who perceived freagle's comment to be fundamentally wrong. Which was the point.
I do think the central planning does separate China from other countries that use market forces. It's not the only thing that separates them, but it is a line of demarcation. My point was more nuanced which was that things like product quality and prices couldn't be attributed to central planning directly because China is using markets to develop and coordinate those aspects of the economy. Without that direct attribution, we run the risk of saying "China product quality good and prices and low" and being met with libs saying "because market capitalism works".
Wait, China is run by COMMUNISTS?? I had no idea, thanks for clearing that up.
Everybody else took it the way you did, I have a tendency to interpret things online in the funniest way possible as a defense against getting mad about basically everything.
market driven is when people have needs and wants that you try to meet lol
Well yeah. You can’t just will a foreign country’s demands. Doesn’t make the west any less pathetic.
The whole notion of central planning where a single central authority micromanages every detail of the economy has always been just a straw man. In my opinion, the central government is best viewed as a central nervous system in the body. It doesn't concern itself with the minutiae of how each particular organ functions, but rather coordinates the functioning of the body as a whole. Incidentally, seeing a society itself as an organism shines light on why central planning becomes necessary as a society grows. Same coordination problems arise that complex living organisms must solve, and thus we see self similar solutions emerge.
While true, the USSR (post NEP) is a good contrast to the Chinese model. The USSR attempted to centralize demand planning and price coordination across the whole economy.
They did, but there was still plenty local planning happening even within the Soviet system. What China shows is that it's more efficient to push central planning even further to the top.
Yes, but it was local planning, which was a planning responsibility and scope delegated by central planning. Contrast this with China where there is a stock market and commodities market.
While the stock market does exist in China, it operates within a socialist framework, guided by the principles laid out by Chen Yun who advocated for a "birdcage economy," where the market acts as a bird, free to fly within the confines of a cage representing the overall economic plan. This idea was adopted in the early 1980s,to allow for use of market forces to efficiently allocate resources, while the state maintained ultimate control over the direction and goals of economic development. In this model, the state still acts as the planner, setting the overall goals and priorities, while the market, acting as the allocator, determining the most efficient way to achieve those goals.
It's also worth noting that the market operates under strict regulations to curb speculation and short-term profit-making, ensuring its primary function as a tool for economic development rather than a platform for wealth accumulation. The recent dismantling of the Alibaba Group into six separate business is a great example of the state overriding the market.
Great info and I'm glad you got a chance to post it for everyone to see. This is the richer version of the point I was trying to make - that certain things can currently be attributed to the market dynamics instead of directly to central planning. I think you've illustrated well how central planning creates the conditions for the market to behave better than it does in liberal societies.
I think you've also illustrated how the Chinese solution differs from the Soviet solution.
None other than President Xi himself has emphasized the role of markets and downplayed the use of “central planning” in the Chinese economy. I think the state control of the banking system works hand-in-hand with this type of central planning (where there’s an overall strategic plan developed by the state and the plan is implemented in the market sector). It’s a fascinating model that I’m trying to learn more about (just downloaded Roland Boer’s Socialism With Chinese Characteristics)
threatens China with war constantly
Get upset when China invests heavily in manufacturing of steel, silicon, and chemicals
I mean, what did
think was going to happen?President Biden announces a 600% tariff on all Chinese products, and 5% tariff for each living Chinese citizen
