from the millions-billions-trillions-next-you-gonna-start-talking-real-money-here dept.
Our last meeting of the state visit, in the Great Hall of the People, was with Li Keqiang, the premier of the State Council and the titular head of China's government. If anyone in the American group had any doubts about China's view of its relationship with the United States, Li's monologue would have removed them. He began with the observation that China, having already developed its industrial and technological base, no longer needed the United States. He dismissed U.S. concerns over unfair trade and economic practices, indicating that the U.S. role in the future global economy would merely be to provide China with raw materials, agricultural products, and energy to fuel its production of the world's cutting-edge industrial and consumer products.
H.R. McMaster: How China Sees The World. The Atlantic Monthly, May 2020.
China has the world's largest manufacturing sector, accounting for about 31% of total global manufacturing output. The EU's manufacturing sector has a global production share of 20%, while the United States accounts for about 17%.
In the United States, around 12.3 million people work in manufacturing; for the EU this number is 29.7 million. China's manufacturing sector employs over 120 million people.
Some of the hallmarks of the Biden Administration are its Inflation Reduction Act (IRA), the Bipartisan Infrastructure Law (BIL), and the CHIPS and Science Act. Both IRA and CHIPS act combined aim to inject close to a trillion dollars into specific sections of the manufacturing sector, while the INVEST in America Act (BIL) adds another 1.2 trillion dollar investment into transportation and road projects and electric grid renewal.
On June 12 of this year, the Joint Economic Committee of the US Senate held a hearing, titled "Made in America: The Boom in U.S. Manufacturing Investment". For that hearing, 4 witnesses were called.
For two of the witnesses, the future for US manufacturing looks bright, with the help of the acts mentioned above. If we want to remain a rich country, we need to invest in advanced manufacturing, they claim.
Rich countries are countries which have accumulated superior knowledge for producing highly-complex leading edge technologies. With that go successful enterprises and high pay, high quality jobs, and a more diversified economy. Diverting money into manufacturing does not need to harm other sectors of the economy: look at Silicon Valley. Now the global software powerhouse, it started with manufacturing transistors.
The Acts passed during this Administration do help: the private sector invested approximately $80bn into manufacturing construction in 2019; in 2024 that has increased to an annualized $220bn.
The other two witnesses -- both connected to the Cato Institute -- have a different outlook though. Policies where you target specific sectors of the economy rarely work, they claim. They are bound to stimulate waste and corruption, and direct funds away from companies who really could use them: and that's without even talking about fiscal deficits and such. Better turn those funds towards generalized tax reductions, which will ultimately stimulate more investment into the broader economy.
Also, one should take into account the reaction of the outside world here: the EU is already working on its own industrial policies, largely in response to the Biden Administration's Acts. We might very well end-up in a zero-sum game, where the only benefactors are a range of companies which are artificially kept alive with grant money.
Now, dear reader, it may come as a surprise to you, but you have just been urgently asked -- by a prominent US Presidential Candidate -- to give your advice on a New Industrial Policy for America.
What will you say? How will you argue?
(Score: 1, Insightful) by Anonymous Coward on Wednesday October 30, @09:36PM (1 child)
and weep.
technolibertarianism, grift, billionare oligarchs
as opposed to wall street, which is just grift and billionare oligarchs
(Score: 2) by Rosco P. Coltrane on Wednesday October 30, @10:30PM
So are you saying we need more techno bros back east for balance?
(Score: 3, Funny) by Anonymous Coward on Thursday October 31, @01:40AM (2 children)
Pretty soon China will decide they need to enter the services market -- and that will make short work of their manufacturing industry, just like many other manufacturing giants of the past.
(Score: 4, Touché) by Mykl on Thursday October 31, @04:27AM (1 child)
It is the normal logical progression, but I'm not sure that China is made out for putting the customer #1.
(Score: 3, Funny) by Freeman on Thursday October 31, @03:33PM
Sure they do, they've already put most of their citizens on the #1 watch list.
Joshua 1:9 "Be strong and of a good courage; be not afraid, neither be thou dismayed: for the Lord thy God is with thee"
(Score: 4, Interesting) by deimtee on Thursday October 31, @08:18AM (2 children)
... what you can get out of data.
So, per 1% of global manufacturing:
United States 723,000 people
Europe 1,485,000 people
China 3,870,000 people
One job constant is that good employers have low turnover, so opportunities to join good employers are relatively rare.
(Score: 0) by Anonymous Coward on Thursday October 31, @09:22AM (1 child)
> United States 723,000 people
> Europe 1,485,000 people
> China 3,870,000 people
Thanks for running the numbers!
To back this up (a little bit), recall the recent SN story on layoffs at Volkswagen (Germany) which suggested that VW had about 2x the number of employees or other similar sized car companies, proportioned to the number of cars made per year.
No need to automate in China, at least not yet.
(Score: 2) by VLM on Thursday October 31, @12:35PM
Yeah the VW math was mine, IIRC, and its fair because cars are roughly identical commodities now. Theres no variation in the product they're all about the same size with about the same number of wheels (aside from dualie pickup trucks, etc)
The difference with manufacturing in general, is in the USA one guy will load steel plates into a robot controlled plasma cutting table followed by a robot welder machine to produce one small part of a truly giant mining machine as a day's work, whereas in China they'll have a hundred people each hand-package a thousand fidget spinners per shift for a total of 100K fidget spinners packaged per day, which both takes 100 employees vs 1 in the USA and probably makes less profit across all 100 Chinese than the one guy in the USA. With automation and robots and ergonomic assembly lines it's like manufacturing workers in the USA are mostly supervisor (supervisors of robots) than in China where mfgr is mostly manual labor.
(Score: 1, Flamebait) by VLM on Thursday October 31, @12:55PM (1 child)
Let's say the intentional plan is to replace the population of the USA with the population of Haiti, Somalia, and El Salvador. There's no magic dirt; the future of the USA is then guaranteed to look a lot like Haiti today.
If we're importing all their people to replace our own, you can look at those countries exports today, to see the USA's exports tomorrow.
Haiti mostly exports bananas coffee mangos and cocoa. Lumber dried up because they wisely deforested the island. By analogy I would expect a major part of USA exports in 2100 to be oranges from Florida. Maybe almonds from CA and maybe frozen meat from the prairies, but Haiti's population can't "do" processed food like frozen meat it's just too complicated and they don't have electricity (coming soon to the USA). So beef from the west might remain a local non-exported food.
There's a microscopic amount of mining in Haiti. Likewise I would expect we'll be exporting coal and iron ore to China in 2100. To "save the environment" but more importantly, to keep the profits in China, all refining and processing will be done in China. China is not exactly out of ores and transport costs only go up (and transport requires a high end population, which the USA will no longer have) so maybe specialty ores only. If there's no one left in the USA to competently run the railroads we'll have to import Chinese (again, LOL) or just not mine.
There's not a lot going on WRT industrialization in Haiti, there's no infrastructure and the country is not really electrified. When the USA de-electrifies and shuts down the grid for good, most of the population in the west will HAVE to move east, so that'll be interesting to watch. It's possible agriculture could continue operating running water pumps strictly off solar; hard to say. Of course if all the water is pumped out of the aquifers, powering the pumps to pump the no longer existing water is the least of your concerns.
The only time GDP growth was larger than consumer inflation in Haiti in the last half century was during the "globalist financial crisis" in '08 or '09 where the inflation rate collapsed due to economic problems in the rest of the world, whereas Haiti's economy can't collapse because it doesn't have much of one to begin with so its GDP was mostly constant. In that way, the USA of the future will be more insulated from economic shocks because it won't have much of an economy left.
(Score: -1, Redundant) by Anonymous Coward on Friday November 01, @03:10PM
-1 Dumbass
(Score: 2, Insightful) by VLM on Thursday October 31, @12:59PM (1 child)
Where will they plagiarize all their R+D from, if we're not here anymore?
The scam of producing fake academic papers and stealing info from the west works if they're just trying to follow us or pretend to keep up with us, but if they can't do it themselves, they'll need someone who can.
Maybe Russia or Japan?
(Score: 1, Touché) by Anonymous Coward on Thursday October 31, @07:06PM
Themselves and others who are still doing R&D.