China's manufacturers are going broke
China’s state-driven push into sectors like electric vehicles, solar panels and semiconductors has produced massive overcapacity, driving tens of thousands of manufacturers into bankruptcy as they undercut each other on price. Commenters debate whether this shakeout is a deliberate “find the winners” phase of industrial policy or a sign of deeper structural problems, including weak domestic demand, misallocated local-government subsidies and rising trade barriers abroad. The thread also touches on how these dynamics shape global competition, from tariffs and offshoring to fears of a broader US‑China economic and security confrontation.
Industrial Policy, Overcapacity, and “Finding Winners”
- Many see current bankruptcies as a planned consequence of China’s subsidy model: massively fund many firms (EVs, solar, chips), let brutal competition drive costs down, then let losers die and consolidate around globally competitive survivors.
- Critics argue this generates huge misallocation of capital, especially by local governments backing weak state‑linked firms that can’t beat leaders like BYD and then must try to dump abroad.
- Others note oversupply is real: prices fall below production costs in solar; tens of thousands of EV-related firms reportedly closed; excess capacity in many sectors.
Exports, Tariffs, and Trade Tensions
- Commenters highlight that “just exporting more” is constrained by tariffs and anti‑dumping rules in US, EU, India, Southeast Asia, etc.
- Chinese automakers increasingly respond by building plants or JVs in Mexico, Turkey, Central Asia, etc., transferring jobs and IP out of China.
- Debate over whether aggressive exports are “necessary” industrial strategy or provoke avoidable trade wars that close markets and push neighbors toward the US.
Domestic Demand and Economic Health
- Some argue domestic demand is weak due to real‑estate and local‑government debt, job market stress, and low median incomes, making it hard to absorb capacity.
- Others counter that growth is slowing but not collapsing; exports are a modest share of GDP; statistics are “decently trustworthy” at macro level.
- Disagreement over how distorted Chinese GDP and employment stats are; some claim heavy fakery, others say that’s overstated.
Comparisons to Western Manufacturing
- Boeing is used as a cautionary tale: even without full offshoring, a finance‑driven culture allegedly destroyed manufacturing excellence that is now hard to rebuild.
- Counterpoints: cultures of excellence can be rebuilt in under a decade (e.g., SpaceX), though some insist lost skills and conditions are not trivial to recreate.
Geopolitics and Media Narratives
- Long subthreads debate South China Sea tensions, US influence in the Philippines and other neighbors, and whether China is uniquely imperialist versus the US and historical empires.
- Some see Western media, including the cited outlet, as having a long‑running “China will collapse” bias; others say coverage is more nuanced and focuses on slowing, not collapse.
- Chinese and Western media are both criticized for mutually amplifying threat narratives, deepening distrust.
EV and Solar as Opportunity vs. Risk
- Oversupply in panels and EVs is seen by some as a chance for other countries to install cheap green tech, though others note panels are now a small part of total solar‑system cost.
- Concern that only a few Chinese EV makers (notably BYD) will survive, but those survivors could dominate globally on cost.