6 ms·
In what sense are domestic car manufacturers "important"? They're inefficient if they're being outcompeted by China.
by milesrout 1y ago
In what sense are domestic car manufacturers "important"? They're inefficient if they're being outcompeted by China.
- solresol 1y agoIf the "outcompeting" is possible because of Chinese government subsidies, then it's important to protect local industry from unfair competition. It's similar to the logic behind anti-trust actions against monopolists. If the playing field isn't level, then the USA government steps in to level it. (Whether BYD is subsidised or not is another question, but the above is the logic of protecting local industry.)
- justinclift 1y ago> If the playing field isn't level, then the USA government steps in to level it. More recently though, it kind of seems like if the playing field isn't tipped strongly towards the US, then the US government will step in to tip it their way.
- intended 1y agoGovernment subsidies effectively provide protection for a local market and capital. America has some of the lowest cost of capital and most effective financial markets in human history. If the Chinese markets are blocked that doesn’t mean the rest of the world is inaccessible. Another aspect of government subsidies is that they mask incompetence.
- refurb 1y agoNot sure why this is downvoted. The Chinese government has been quite transparent in terms of globally dominating several industries including EV through heavy government support. It would make no sense to destroy your own industry because it can’t compete with a heavily subsidized foreign industry.
- amanaplanacanal 1y agoIf it is such a successful strategy, why doesn't everybody do it?
- happymellon 1y agoSubsidise industries? Everyone does. China funds it upfront, while the US does it after the spending and calls it a bail-out, or a "government contract"
- refurb 1y agoIt's often not a successful strategy. If your product sells like made at a subsidized price, but not at the unsubsidized price, it's not a real business.
- ggm 1y agoYou can't rely on Chinese companies to make the tanks and rockets you intend aiming at China. Car manufacturers serve many purposes. Aside from keeping the UAW membership onside, they are a strategic buttress for an emerging future war risk. Australia maintained subsidies to Ford and GM for onshore production precisely because of this. And they stopped when a strategic realignment made successive governments decide the risk didn't justify the expense. A decision they may now be regretting.
- tehjoker 1y agoSince there’s no good reason to do any of that, we should absolutely lose that capability since to use it is to abuse it
- moi2388 1y agoDeterrence is a very good reason, and the reason we’ve had peace in the western world for as long as we have.
- StopDisinfo910 1y agoIntegrated markets and commerce is why we have had peace in the western world. The very things the current American head honcho is tearing apart. We have had very little peace in the rest of the world in the meantime between the colonial wars, the various proxy wars of the Cold War, then the numerous stupid adventures of the modern America and now Russia wanting to be an empire again.
- moi2388 1y agoI don’t think integrated markets were the cause. There was plenty of integration between Ukraine and Russia in the oil and gas infrastructure for example. (Nuclear) deterrence is why we’ve only had proxy wars instead of direct wars
- JumpCrisscross 1y ago> Since there’s no good reason to do any of that It's 2025. We're still asking what happens when one group has lots of guns, tanks, fighter jets and missiles, and the other doesn't? Also, there is a difference between stockpiling arms and maintaining the ability to produce them if necessary.