China to USE RUSSIAN PORT OF VLADIVOSTOK
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Not really 'breaking' news but I tended to follow Dan Wang a bit on Twitter. What do you lads think about his answers? A lengthy article.
So my first question is: What are two or three things that Americans need to know about Chinese industrial policy and technological competitiveness in 2023?
D.W.: The first is that there have been a lot of failures. China is achingly aware of its deficiencies in two strategic sectors in particular: semiconductors and aviation. So it has showered these sectors with bountiful money and stern policy attention. Where has that gotten them? Not far. On chips, China has built the basics of the industry, but is at best 10 years behind the leading edge of manufacturing logic chips, and even more on the tools needed to produce chips: lithography equipment and EDA software. On aviation, China’s answer to Airbus and Boeing has been years behind schedule, and is anyway substantially dependent on western engines and avionics systems.
The second is that there have been a lot of successes. I would say that China has caught up with the west on nearly all manufactured products outside of chips and aviation. It is making sophisticated electronics components. It is making boring industrial equipment that rarely grace headlines. And it is making most of the technologies we need for decarbonization. The folks at Bloomberg New Energy Finance estimate that China owns 90% of the solar supply chain: everything from polysilicon production to the tools needed to make photovoltaics to the panels themselves. It’s also doing very well in batteries and has a shot at dominating the hydrogen supply chain as well.
A central question I’m working on now is to figure out whether China’s technological capabilities in the future will more closely resemble its failures or successes. There are enormous macro headwinds for China’s economy: lousy demographics, a domineering central government, and greater political emphasis on state-led growth. But I tend to think that China will be able to solve its technological deficiencies. Its main task is to reinvent existing technologies: arguably firms like TSMC and ASML have the harder task, that is to push forward the technological frontier. On chips in particular, there’s a broad sense that it costs too much to keep pushing forward Moore’s Law. So if the leaders hit a wall, it’s only a matter of time for Chinese firms to catch up. These products are technology, not magic. And Chinese firms have already mastered a lot.
Question 2
N.S.: What's different about semiconductors and advanced aviation? Why has China not been as successful in catching up in those sectors?
D.W.: I think there has been a consistent pattern of Chinese successes and failures. Any technology that demands the complex integration of different scientific areas is challenging for Chinese firms. Semiconductors bring together electrical engineering, chemistry, computer science, and more; aviation is the integration of aerodynamics, materials science, mechanical engineering, etc. China's scientific capabilities have steadily risen, but I would say it's still fairly weak. No surprise, perhaps, that Chinese firms weren't able to produce mRNA vaccines, since its scientific establishment is unused to puttering around the fringes of new fields.
On the other hand, for any technology where the science is mature, and the complexity lies more with the manufacturing process, China tends to be strong. Take renewable technologies like solar photovoltaics or EV batteries. The science of turning light into electricity and power storage are pretty well understood. But Chinese firms have been able to outbuild their foreign competition (with plenty help from government support) in creating high-performing products. Putting together a battery, for example, involves around ten steps—from cell filling to final sealing—that demand perfect handoff at each stage. Chinese firms are really good at this, which they learned from the highly-demanding electronics supply chain.
And here the US tends to be weak. American manufacturers aren't good at making products of high intricacy at high volume. And it sometimes trips over simple products too. It’s puzzling to me that American factories weren't able to quickly retool to turn out masks and other personal protective equipment in the early days of 2020. There's something quite strange about the US where it is able to make super-advanced products like AI, jet engines, semiconductor production equipment, but can't build basic infrastructure or simple products.
Question 3 N.S.: Gotcha. That's a good dichotomy. Do you think that means we can expect to see China struggle in emerging technological fields like AI and quantum computing where the science isn't mature yet? Also, probably the most famous example of Chinese technological dominance is Huawei winning the 5G race. Does that fit the general pattern you described?
D.W.: Huawei has indeed been a significant Chinese technological success, embodying a lot of the successes and problems with China's approach. On the one hand, it has faced a lot of lawsuits over intellectual property theft. And it has benefited from some degrees of state support, including overseas purchases of its equipment made possible by Chinese policy banks. But it's also emblematic of the grit among Chinese manufacturers. They tend to start out making products that western companies are willing to concede to them because shareholders sniff at their low margins. And they go into developing countries that western companies don't like to be too entangled with, because of business complexity and corruption issues. Like many Chinese companies, Huawei started by making cheap products for price-sensitive customers, gradually making more sophisticated technologies.
I confess I'm puzzled by China and AI. There has been a lot of data compiled that China has many leading researchers who claim great quantities of studies and patents. It's also obvious that the central government has thought about AI, given the number of study sessions the Politburo has dedicated to it. Now where are the results? Chinese firms may be leading in facial recognition. But they are not releasing any of the text generation and image generation tools that have been so thrilling to the public. It still doesn't look like they are publishing much of anything for consumer use. So it could be that their focus is on fairly secretive projects for the government. But I wonder if that is going to be a formula for success if they're not really learning from the market.
For more see source.
Source: Non paywall source:
Interview: Dan Wang
We talk about China's economy, decoupling, export controls, industrial policy, state control, and lots more.
Question 1So my first question is: What are two or three things that Americans need to know about Chinese industrial policy and technological competitiveness in 2023?
D.W.: The first is that there have been a lot of failures. China is achingly aware of its deficiencies in two strategic sectors in particular: semiconductors and aviation. So it has showered these sectors with bountiful money and stern policy attention. Where has that gotten them? Not far. On chips, China has built the basics of the industry, but is at best 10 years behind the leading edge of manufacturing logic chips, and even more on the tools needed to produce chips: lithography equipment and EDA software. On aviation, China’s answer to Airbus and Boeing has been years behind schedule, and is anyway substantially dependent on western engines and avionics systems.
The second is that there have been a lot of successes. I would say that China has caught up with the west on nearly all manufactured products outside of chips and aviation. It is making sophisticated electronics components. It is making boring industrial equipment that rarely grace headlines. And it is making most of the technologies we need for decarbonization. The folks at Bloomberg New Energy Finance estimate that China owns 90% of the solar supply chain: everything from polysilicon production to the tools needed to make photovoltaics to the panels themselves. It’s also doing very well in batteries and has a shot at dominating the hydrogen supply chain as well.
A central question I’m working on now is to figure out whether China’s technological capabilities in the future will more closely resemble its failures or successes. There are enormous macro headwinds for China’s economy: lousy demographics, a domineering central government, and greater political emphasis on state-led growth. But I tend to think that China will be able to solve its technological deficiencies. Its main task is to reinvent existing technologies: arguably firms like TSMC and ASML have the harder task, that is to push forward the technological frontier. On chips in particular, there’s a broad sense that it costs too much to keep pushing forward Moore’s Law. So if the leaders hit a wall, it’s only a matter of time for Chinese firms to catch up. These products are technology, not magic. And Chinese firms have already mastered a lot.
Question 2
N.S.: What's different about semiconductors and advanced aviation? Why has China not been as successful in catching up in those sectors?
D.W.: I think there has been a consistent pattern of Chinese successes and failures. Any technology that demands the complex integration of different scientific areas is challenging for Chinese firms. Semiconductors bring together electrical engineering, chemistry, computer science, and more; aviation is the integration of aerodynamics, materials science, mechanical engineering, etc. China's scientific capabilities have steadily risen, but I would say it's still fairly weak. No surprise, perhaps, that Chinese firms weren't able to produce mRNA vaccines, since its scientific establishment is unused to puttering around the fringes of new fields.
On the other hand, for any technology where the science is mature, and the complexity lies more with the manufacturing process, China tends to be strong. Take renewable technologies like solar photovoltaics or EV batteries. The science of turning light into electricity and power storage are pretty well understood. But Chinese firms have been able to outbuild their foreign competition (with plenty help from government support) in creating high-performing products. Putting together a battery, for example, involves around ten steps—from cell filling to final sealing—that demand perfect handoff at each stage. Chinese firms are really good at this, which they learned from the highly-demanding electronics supply chain.
And here the US tends to be weak. American manufacturers aren't good at making products of high intricacy at high volume. And it sometimes trips over simple products too. It’s puzzling to me that American factories weren't able to quickly retool to turn out masks and other personal protective equipment in the early days of 2020. There's something quite strange about the US where it is able to make super-advanced products like AI, jet engines, semiconductor production equipment, but can't build basic infrastructure or simple products.
Question 3 N.S.: Gotcha. That's a good dichotomy. Do you think that means we can expect to see China struggle in emerging technological fields like AI and quantum computing where the science isn't mature yet? Also, probably the most famous example of Chinese technological dominance is Huawei winning the 5G race. Does that fit the general pattern you described?
D.W.: Huawei has indeed been a significant Chinese technological success, embodying a lot of the successes and problems with China's approach. On the one hand, it has faced a lot of lawsuits over intellectual property theft. And it has benefited from some degrees of state support, including overseas purchases of its equipment made possible by Chinese policy banks. But it's also emblematic of the grit among Chinese manufacturers. They tend to start out making products that western companies are willing to concede to them because shareholders sniff at their low margins. And they go into developing countries that western companies don't like to be too entangled with, because of business complexity and corruption issues. Like many Chinese companies, Huawei started by making cheap products for price-sensitive customers, gradually making more sophisticated technologies.
I confess I'm puzzled by China and AI. There has been a lot of data compiled that China has many leading researchers who claim great quantities of studies and patents. It's also obvious that the central government has thought about AI, given the number of study sessions the Politburo has dedicated to it. Now where are the results? Chinese firms may be leading in facial recognition. But they are not releasing any of the text generation and image generation tools that have been so thrilling to the public. It still doesn't look like they are publishing much of anything for consumer use. So it could be that their focus is on fairly secretive projects for the government. But I wonder if that is going to be a formula for success if they're not really learning from the market.
For more see source.
Source: Non paywall source:
A quick glance, and it seems like shit lol, likely not worth paying braincells or attention to.
Completely myopic. For instance, he focuses on consumer-facing AI when the real societal value is in enterprise-facing AI. Consumer-facing AI is a false prophet just like has been for 5G.
Also what is this nonsense about the science being mature for batteries when the major battery manufacturers are all testing new and novel battery chemistries and the US is nowhere to be found?
Bullshit. CATL, BYD and others made plenty of innovations in batteries, solar and wind turbines. He knows shit about Chinese innovations
China is now capable of producing up to 7nm chips and in a few years, will definite catch up to the best if not race past them completely and in regards to its aviation, produces some of the most lethal jet fighters in the world and now has its own in house smaller commercial flight with more on the way in the future. So I say he can continue to bullshit around all he wants but if China continues to innovate and the USA continues to lose patriots and military hardware due to the Ukraine conflict and they fact that that is a lost cause then simply cannot stop, then he better have a call line to a local mental hospital because there won’t be enough coping medicine to cope with the amount of epic fails his life has had up until this point. In the end, he will not be missed by anyone
Total nonsense. He doesn't know jack shit, literal not even jack shit, about semiconductor equipment, batteries or photovoltaics.
If the science of storing energy or transforming light into electricity is so mature then how the fuck did these technologies come out after the transistor and improve slower? Exactly.
In fact it's the exact opposite. Emerging fields is where China does best, old legacy fields like combustion engines are where China is weaker on. This guy says Chinese science is weak? If #1 in Nature Index is weak then nobody is strong.
I thought you were talking about this "Dan Wang" also an economist and used prominently or rather is prone to be shown on western media whenever there's a discussion on China's GDP/economy. There is also an infamous "Wang Dan" one of the rebels in Tianmen Square who's a Harvard graduate with a PhD in History. So many Wang Dans ayah..
This is the Dan Wang that I followed on Twitter for a while.