When Western brands came to China, they were forced to make joint ventures with local manufacturers. The entire exercise ended up being a lark disguising a massive technology transfer. (In BYD's case, it was with Daimler). The partners exclusively got cheaper components, startup subsidies, and government assistance.
Setting aside the lack of worker's rights and unions that makes Chinese manufacturing cheaper, the government is assisting these companies by eating up losses on the battery production and lithium mining. https://www.reuters.com/markets/commodities/china-is-oversup...
If you try to read about BYD's lithium mining interests in places like Africa and Tibet, you will realize they are very cagey about the numbers on these deals.
Effectively these cars are being "dumped" on the market at an overall loss. The EU report (take it with a grain of salt) found that BYDs were artificially cheaper by 17%. https://ec.europa.eu/commission/presscorner/detail/en/ip_23_... And this is after the markup they get in foreign markets.
Western Brands only succeed in China until the Chinese government "acquires" enough IP and experience to copy them effectively, at which point the government hobbles or outright removes the foreign "competition". Sadly this is a lesson that company after company, industry after industry, fails to learn.
> BYD has already entered 100 countries and regions globally, but it’s poised for even more growth in 2025. After producing over 1.77 million vehicles last year, BYD topped Tesla by about 4,500 units to become the world’s largest EV maker.
You must have missed what's been happening in China for the past 30 or so years. Their investment in science and engineering in that period has been staggering. It's now paying off.
I'm old enough to remember when the same things were being said of Japan and then how quickly that blew up on us. I suspect China is going to dominate the world economy in the 2030s.
I'm old enough to remember that as well, and now we see where that economic and tech explosion goes when the underlying social and economic structures are inflexible and lacking.
I'm too old to get excited or upset every time people decide that a trend line must continue to infinity.
> I'm too old to get excited or upset every time people decide that a trend line must continue to infinity.
Yeah. People talk about the Japan of the 80s, you don't hear so much about the Japan of the 90s - "the lost decade" outside of economic circles. I'm sure China has no interest in repeating that!
Exactly, but they're in a much worse position than Japan was. They also have giant property bubbles, but a MUCH worse government, a much worse generational divide, a MUCH worse demographic bomb, and no seeming exit from the "we manufacture things" road onto something more sustainable. Having 1.4 billion people doesn't help either.
One part environmental regulatory advantages, nine parts economies of scale.
The saving grace is America is lucky. We got bailed out of Iraq by Russia being worse. And we’re getting bailed out of our geopolitical and economic ineptitude by Xi becoming a dictator and immediately alienating China’s international partners through “wolf warrior” diplomacy. (Trump is replicating that playbook, but he’s only here for four years, and a lot of his nonsense will get slowed down by our courts, another advantage China lacks.)
When Western brands came to China, they were forced to make joint ventures with local manufacturers. The entire exercise ended up being a lark disguising a massive technology transfer. (In BYD's case, it was with Daimler). The partners exclusively got cheaper components, startup subsidies, and government assistance.
Setting aside the lack of worker's rights and unions that makes Chinese manufacturing cheaper, the government is assisting these companies by eating up losses on the battery production and lithium mining. https://www.reuters.com/markets/commodities/china-is-oversup...
If you try to read about BYD's lithium mining interests in places like Africa and Tibet, you will realize they are very cagey about the numbers on these deals.
Effectively these cars are being "dumped" on the market at an overall loss. The EU report (take it with a grain of salt) found that BYDs were artificially cheaper by 17%. https://ec.europa.eu/commission/presscorner/detail/en/ip_23_... And this is after the markup they get in foreign markets.
Western Brands only succeed in China until the Chinese government "acquires" enough IP and experience to copy them effectively, at which point the government hobbles or outright removes the foreign "competition". Sadly this is a lesson that company after company, industry after industry, fails to learn.
BYD is passing western brands in many markets
> BYD has already entered 100 countries and regions globally, but it’s poised for even more growth in 2025. After producing over 1.77 million vehicles last year, BYD topped Tesla by about 4,500 units to become the world’s largest EV maker.
https://electrek.co/2025/01/17/byd-launches-worlds-largest-c...
This argument falls flat in certain technologies where China is now the leader in R&D
What technological edge do they have exactly? Cheap, unregulated labor practices? A lack of environmental regulations?
You must have missed what's been happening in China for the past 30 or so years. Their investment in science and engineering in that period has been staggering. It's now paying off.
I'm old enough to remember when the same things were being said of Japan and then how quickly that blew up on us. I suspect China is going to dominate the world economy in the 2030s.
I'm old enough to remember that as well, and now we see where that economic and tech explosion goes when the underlying social and economic structures are inflexible and lacking.
I'm too old to get excited or upset every time people decide that a trend line must continue to infinity.
> I'm too old to get excited or upset every time people decide that a trend line must continue to infinity.
Yeah. People talk about the Japan of the 80s, you don't hear so much about the Japan of the 90s - "the lost decade" outside of economic circles. I'm sure China has no interest in repeating that!
Exactly, but they're in a much worse position than Japan was. They also have giant property bubbles, but a MUCH worse government, a much worse generational divide, a MUCH worse demographic bomb, and no seeming exit from the "we manufacture things" road onto something more sustainable. Having 1.4 billion people doesn't help either.
They just set the world record for a fusion reaction, as one example
> What technological edge do they have exactly?
One part environmental regulatory advantages, nine parts economies of scale.
The saving grace is America is lucky. We got bailed out of Iraq by Russia being worse. And we’re getting bailed out of our geopolitical and economic ineptitude by Xi becoming a dictator and immediately alienating China’s international partners through “wolf warrior” diplomacy. (Trump is replicating that playbook, but he’s only here for four years, and a lot of his nonsense will get slowed down by our courts, another advantage China lacks.)