11/02/2024

Capitalism and free trade are against American and European incompetent, inefficient and ineffective democracy

 The USA thinks that just by talking up their economy will change its fortune. It is not going to happen and an illusion. And by talking down on China's economy, it will benefit them. It will not happen too.

A country's rise is dependent on its ability to make things that the world needs - cheaply, efficiently and catering to the evolving trend of global demand. The USA lost all of its manufacturing over the decades. It is trying to recover with its re-industrialization by attracting manufacturing back to the USA. That is easier said than done.

There are massive hurdles to overcome. The need for control of raw materials, the need to train the necessary skilled workers, the need to throw billions of dollars as subsidies to attract back domestic and foreign entities to build factories in the USA. Investors flock to places they can make the most profits, and this mindset has never change

These are factors that can be foreseen with attracting manufacturing back to the USA. The real obstacle to overcome is what is unforeseen after all the investments are made. Can they compete globally knowing that this is a problem they have to overcome in order to be feasible? What elephants are just going to remain white elephants.

China's ability to leverage on its control of raw materials, cheap energy and skilled workers and its overcapacity is causing all the undue difficulties that foreign investors will have to think carefully about. As TSMC now discovered, there are so many problems associated with investments in USA - the different working attitudes, the wage differentials and the shortage of skilled workers. And TSMC has not even started on its mission in USA to compete on the world stage.

Anonymous

4 comments:

Anonymous said...

'Capitalism and free trade are against American and European incompetent, inefficient and ineffective democracy' is probably only true today. In the past, before the rise of China, they were trying to do more trade particularly looking at the huge market in China, investing in cheaper destinations having cheaper labor, and in the process, taking advantage of all the cheap products coming out of China. Life was so good for the USA with Chinese products flooding their giant superstores like Walmart and the USA able to just print and print to get at those products. China was able to accumulate all the toilet papers which were later to be invested in USA Treasuries, Bonds and real estate. It was a win-win situation for both, right?

When China started investing in those trade surpluses in the BRI and using the accumulated US$ as loans for infrastructure developments all over the world and competing with the IMF and World Bank, instead of pouring them into Treasuries and other investments in the USA, the game changes. The USA knew the writing is on the wall and relations took a turn for the worse.

When they found out later that they could no longer compete luring industries back to the USA, they changed their tune, branding cheap labor as 'slave wages', voluntary outsourcing of production to China to take advantage of the cheaper wages as stealing its jobs, unable to compete with Chinese manufacturing as due to 'overcapacity'.

Anonymous said...

You must give it to them for being so good in lying, fabricating propaganda, twisting lies into facts and vice versa, inventing threats of every shape and size and managing still to convince the foolish.

Anonymous said...

You cannot find a more silly country in the world that would spend US$1.5b to fabricate fake news, tell lies, and train and pay others to write and spread misinformation.

Anonymous said...

As silly as the Taiwanese paying people to visit the country? Anyway, only the dumb can get along with the dumber.