News on China's scientific and technological development.

Eventine said:

If we ignore geopolitics and focus on just market forces, it's not about what China wants, it's about what makes sense for China to invest in and compete on, and what it makes sense for China to leave to others.

Opportunity costs dictate that you cannot be the best at everything. If Koreans are competent - and I think we can agree that they are - then there will inevitably be industries where they will have comparative advantage, simply because they'd be willing to specialize and commit more resources than would be warranted by opportunity costs from China's side. In those industries, it would not make economic sense for Chinese companies to even invest the resources to compete with them - as it DIDN'T make economic sense for Chinese companies to, for example, invest in developing high-end lithography machines until the US sanctions (hence the Chinese government having to subsidize it).

I'm not saying this is true specifically for shipbuilding, EV, nuclear energy, or semiconductors; but I want to get away from this idea that industrialization is a zero-sum game where China industrializing means others de-industrializing. That did not happen when the US industrialized and it did not happen when the EU re-industrialized, either.

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tphuang said:

All the industries that Korea is strong at are the same industries that Chinese firms are competitive in.

Once you go through the 4 industries I listed, what else does Korea have left?

There are so many people in China who are trying to make it big. As long as there is money to be made, there will be Chinese tech firms working on them.

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Eventine said:

Korea has players in almost every industry, but they are not competitive because they decided to focus their efforts into a smaller set of key industries. The four you listed are prominently known, but Korea was/is actually also competitive in appliances, chemical engineering, machine tools, automation (e.g. robotics), weapons manufacturing, and more. Obviously you can make the point that all of these industries are industries China is also interested in, but the question is not one of interest - it's one of opportunity cost.

In the simplest example, let's say Country A has 100 people and 10 industries to invest them in; it could start off by putting 10 people in each industry. If Country B, their competition, only has 15 people, their best play is to invest all 15 people in 1 of the 10 industries - ie "specialization" - so that they can beat Country A's investment. Country A can of course reinforce that industry with more people to match or beat Country B's investment, but then it'd be taking those people away from other industries, making those industries weaker. Country B can then pivot to those industries instead, in a never ending cat and mouse game, until eventually both countries reach an equilibrium and just agree that 1 of the 10 industries will belong to Country B.

That is the game Korea could have played, based on the principle of comparative advantage. Even if it cannot keep hold of the four industries you mentioned, it could have redirected and focused its resources to some other industry like chemical engineering or robotics, and dominated that, instead. Sure, China has a lot more resources (in talent, money, etc.) than Korea, but distributed across many different industries, it can only devote so much to any one thing. That's what leads to specialization and the creation of global supply chains; because at the end of the day, if we ignore geopolitics, resources are just resources - there's no reason why Chinese companies would not find a use for Korea's resources in their supply chain.

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iewgnem said:

Problem is China is almost 30x larger than Korea and number of important industries are finite.

At end of the day a Chinese side projrct could still beat Korea even if they focus on only 1 industry

For specilization to happen, Korea must convince China to voluntarily not work on something, and they're doing the opposite of that.

Korea is multiple leagues below China, they're not in any position to talk about comparative advantage in any shape in form onany subject with China

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A draft of the 24-page report highlights the concerns felt by executives across various sectors, including automotive, parts, batteries, petrochemicals, aviation, distribution, gaming, biotech, and finance. They observed that China’s workforce is highly flexible, often working through the night if necessary, with rapid decision-making processes that enable swift implementation of ideas.

Furthermore, China’s ‘fast innovation’ strategy—where the remaining 10% of companies absorb the technology from the 90% that fail—has driven its remarkable growth. The executives also pointed out that China has undergone significant changes, especially over the past four to five years, accelerated by both the pandemic and U.S.-China tensions. One concern raised was that only a few Korean industries still maintain a competitive edge, and hesitation at this point could result in losing even that.

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PopularScience said:

Why this conclusion? Cell just published 3 articles from China last few days.

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Eventine said:

You're forgetting they could be working for Chinese companies in Korea - it has a highly educated work force, excellent infrastructure, and a culture of hard work. If Korea was friendly, they could just arrange Chinese companies to open factories in Korea, and have their own companies focus on intermediary inputs. This is what China did to industrialize, in the first place.

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iewgnem said:

As I said, only way for Korea to specialize is if they convince China to throw them a bone, which in turn require understanding of their place. Korea's open hostility toward China makes that impossible, which means no matterhowhard they try, they'll still be crushed

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