Chinese Economics Thread

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ougoah

Brigadier
Registered Member
If China wants to retaliate for Huawei and Xiaomi bans then perhaps Apple isn't the best option. Face it, China does sort of need American products a bit more than the American market needs Xiaomi. It's not like China can completely ban Boeing unless they want airlines to get cut off from parts. It's already diversifying with more Airbus orders but everything else that can be done sort of has been done. It just goes to show China needs to continue striving towards total independence while also striving to get to the leadership positions in every field so that it doesn't need anyone and offers market leading products. Xiaomi and Huawei have plenty of alternatives.
 
localizer

localizer

Colonel
Registered Member
ougoah said:
If China wants to retaliate for Huawei and Xiaomi bans then perhaps Apple isn't the best option. Face it, China does sort of need American products a bit more than the American market needs Xiaomi. It's not like China can completely ban Boeing unless they want airlines to get cut off from parts. It's already diversifying with more Airbus orders but everything else that can be done sort of has been done. It just goes to show China needs to continue striving towards total independence while also striving to get to the leadership positions in every field so that it doesn't need anyone and offers market leading products. Xiaomi and Huawei have plenty of alternatives.
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Protectionism never works, China learned this lesson for a century the hard way.

Only way forward while remaining open is a strong military to fend off bullies and wise domestic policies to promote science/innovation.

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siegecrossbow

siegecrossbow

General
Staff member
Super Moderator
cbl21 said:
You're not wrong about component makers, but your premise about assemblers moving out is wrong, as I've yet to seen any measurable shift in production in the numbers. At least for Apple/Foxconn, they have been clamoring to reduce production in China since 2007; almost all attempts have failed. Numbers don't lie:

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You might be fooled into thinking they are leaving China if all you read in news reports is the new plants being constructed outside China, neglecting the simultaneous production expansion within China that dwarfs anything in India or Vietnam. And the first graph refers to just assembly; the one you have been complaining about.

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puts this well:

From another source, MarcoPolo's
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:


Considering how Apple began trying to diversify as early as 2007 from China, you would have expected them to make some measurable progress. Or even during the trade war of the past 2 years, yet they've been doing the opposite of "diversifying from China". Because even as they may announce flashy new factories in Brazil, or Vietnam, or India, they're simultaneously opening much more new factories in China at the same time.

That's not to mention the supply chain troubles in other countries which have previously led to Apple backing off from diversification. For example, Brazil saw its plants closed despite Apple/Foxconn pledging to invest $12 billion and 100000 jobs into the country in 2011. Apple/Foxconn also tried, and failed, to set up production bases in
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. Vietnam investment might actually work this time as its infrastructure improves, but as it sits right next to China, it can benefit from depending on their comprehensive supply chain, and neither is the country nearly large enough to meaningfully replace Chinese capacity.

In 2015, Foxconn, Apple's main supplier,
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that India would have 12 plants and 1 million Indian workers by this year, as well as a
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to create 50,000 jobs in Maharashtra back in 2015. Both of these did not live up to their hype. From the MarcoPolo article, Apple added 34 new supplier bases in China between just 2017 and 2019, and reduced 3 from "other countries" (which includes India). While in India, Foxconn is nowhere even close to having 1 million workers in India,
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their $5 billion plant they had promised the Maharastra gov't back in 2015 in early 2020. They came back with a far more paltry $1-billion investment to expand an existing plant and create just 6000 jobs, which was hyped up by Indian media a few months ago with great fanfare (for context, Foxconn still employs somewhere around 1.3 million workers in China, despite spending more than a decade of trying, and failing, to diversify away from it). Meanwhile, Foxconn continues to build its most advanced factories in China,
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10 "lighthouse factories" (fully automated factories, eliminating the need for low-wage workers) in the country in 2020, and constructing another 10 this year.

Also, when you move production out of China, don't be surprised when you're outcompeted on cost and scale, and pushed out of business:
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. Interestingly, Panasonic based its production out of Malaysia, but nevertheless they couldn't compete. If Foxconn tries to leave, fine; more industrial capacity for Luxshare to outcompete and kill Foxconn on.
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Indian Apple production capacity technically increased 300% from 2016 to 2019 :D.
 
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Deleted member 15887

Guest
Apple builds just 3 new (and compared to China, much smaller) factories in India => Western Media: "IS INDIA THE NEW WORLD FACTORY!?!? CHINA IS DONE FOR, THEIR MANUFACTURING INDUSTRY IS DEAD!!!"

Apple builds 20+ new factories in China at the same time => Western Media: "I sleep. Also CCP Propaganda REEEE!!!"
 
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Petrolicious88

Senior Member
Registered Member
daifo said:
Trump did want the Yuan to get stronger lol
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Both Biden and Xi wants the Yuan to appreciate against the dollar. Additional 10-20% appreciation serves the interests of both parties. A yuan appreciation is one of the levers needed to achieve the dual circulation strategy. America needs inflation to reduce its debt burden and increase domestic household savings.

Yuan appreciation will set the foundation of Biden-Xi negotiations. This won’t happen for another few months as Biden wants to wait a bit longer.
 
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