> I think that's the hubris China is currently having: as they've grown stricly because of the reliance of export-led growth, they are now dependent on the global economic order as much as the US is (for its import-led growth).
Honestly, I think the PRC's hubris is more than matched by the US's (and Western world's). They're still overconfident from the collapse of the Soviet Union, and seem to think the chips will inevitably fall on their side, so they still engage with a large amount of wishful thinking.
> And the ones that initially built the factories in China, can always pack up and move to a different country. So global corporations are now kind of "cycling through" a list of alternate underdeveloped countries to build factories in, and keep going until the options are all exhausted.
I'm not so sure...
1) I think it's ultimately the PRC's goal to have domestic champions replace those global corporations in the global economy (e.g. Apple declines as Huawei ascends)
2) I don't think the PRC is as stupid as the US was, and will not allow those companies to "pack up and move" to the degree it's disruptive to their ability to provide an unmatched manufacturing supply chain.
> Honestly, I think the PRC's hubris is more than matched by the US's (and Western world's).
Yes, I still definitely agree with that one. US’s hubris is the undeniably the largest in the world.
> I think it's ultimately the PRC's goal to have domestic champions replace those global corporations in the global economy (e.g. Apple declines as Huawei ascends)
Maybe, maybe not? We’ll see if this goes well as planed. Easier said than done.
> I don't think the PRC is as stupid as the US was, and will not allow those companies to "pack up and move" to the degree it's disruptive to their ability to provide an unmatched manufacturing supply chain.
The point is, companies are already doing this. You’ll be surprised how much conglomerates like Samsung has already taken production out of China.
> Maybe, maybe not? We’ll see if this goes well as planed. Easier said than done.
My understanding is that China's manufacturing supply chain is so well-developed that companies like Apple don't think they even have a choice except build their stuff there. The only things they're missing are a few things at the very high end. If they lack a commitment to free markets, its conceivable that they could use that advantage to slowly strangle their global competitors (e.g. allow their domestic champions a price/quality/volume advantages, while keeping the value proposition for global companies just good enough that continued dependence makes economic sense). To counter that, the US would also have to take bold steps away from free market dogma, against the interests if its corporate sector, which has relatively more political power, and against its reigning ideologies [1].
> The point is, companies are already doing this. You’ll be surprised how much conglomerates like Samsung has already taken production out of China.
I'd be interested to know how truly disentangled they are. My understanding is that even when companies move production away from China, they're still seriously dependent on China's manufacturing supply chain (e.g. they have to ship all the components from China to Vietnam for final assembly). I'm not aware of any efforts to replicate the range of capabilities elsewhere.
[1] The right would have issues with stepping away from free market economics, and I think the left would be skeptical of the international competition aspect.
> Two decades ago, as Apple’s operations chief, Mr. Cook spearheaded the company’s entrance into China, a move that helped make Apple the most valuable company in the world and made him the heir apparent to Steve Jobs. Apple now assembles nearly all of its products and earns a fifth of its revenue in the China region. But just as Mr. Cook figured out how to make China work for Apple, China is making Apple work for the Chinese government....
> No Plan B
> In 2014, Apple hired Doug Guthrie, the departing dean of the George Washington University business school, to help the company navigate China, a country he had spent decades studying.
> One of his first research projects was Apple’s Chinese supply chain, which involved millions of workers, thousands of plants and hundreds of suppliers. The Chinese government made that operation possible by spending billions of dollars to pave roads, recruit workers, and construct factories, power plants and employee housing.
> Mr. Guthrie concluded that no other country could offer the scale, skills, infrastructure and government assistance that Apple required. Chinese workers assemble nearly every iPhone, iPad and Mac. Apple brings in $55 billion a year from the region, far more than any other American company makes in China.
> “This business model only really fits and works in China,” Mr. Guthrie said in an interview. “But then you’re married to China.”
Honestly, I think the PRC's hubris is more than matched by the US's (and Western world's). They're still overconfident from the collapse of the Soviet Union, and seem to think the chips will inevitably fall on their side, so they still engage with a large amount of wishful thinking.
> And the ones that initially built the factories in China, can always pack up and move to a different country. So global corporations are now kind of "cycling through" a list of alternate underdeveloped countries to build factories in, and keep going until the options are all exhausted.
I'm not so sure...
1) I think it's ultimately the PRC's goal to have domestic champions replace those global corporations in the global economy (e.g. Apple declines as Huawei ascends)
2) I don't think the PRC is as stupid as the US was, and will not allow those companies to "pack up and move" to the degree it's disruptive to their ability to provide an unmatched manufacturing supply chain.