The games played with currency and private debt that fueled the massive export boom are not sustainable indefinitely. There are already signs it may be tipping, and the world raising interest rates to combat inflation will worsen the situation. Combine that with their exports to the US falling due to sanctions and a new interest in US manufacturing. And as their population and the population of their other trading partners all shrink...
They are still growing, they are still getting stronger, but for how long? Meanwhile 70% of Taiwanese residents now identify as Taiwanese rather than Chinese?
If they wait for that percentage to climb, and for TSMC to diversify fabs to other places? The cost to take Taiwan is going up, and the prize for taking it is falling with no reason to expect inflections in either. If they don't take it now, there is really no point taking it at all.
Rationally speaking, there probably already isn't any point in taking it. It would tank exports and speed the adoption of local manufacturing elsewhere. All to get a temporary stranglehold on chip supply? What would they do with those chips? They are already far too export dominated. They need consumers to reduce their exports. If they want to win the long game, let their 1% give half their wealth to educating knowledge workers to buy their manufacturing rather than exporting it.
I think people overrate TSMC are the primary motivator for the PRC, who have basically maintained the same posture toward the 'renegade province' since 1949. This is unfinished business from a civil war which never officially ended.
for sure, but most opinion from the west inflates TSMC as primary motivator, its a complicating factor yes, but the PRC has been on about taking Taiwan for the past 70 years, before semi-conductors were even invented.
look at the top voted comment in this thread - the narrative is some sort of escalation from Xi Jinping when unification with Taiwan is boilerplate rhetoric which every leader since Deng says at Party Congress.
PRC position has not changed - commitment to unification by peaceful means, but war never off the table.
Agreed! I think there was maybe some real escalation around the time of Pelosi's visit (where Morris Chang was in attendance in her photo-op with Tsai), though, and it's hard not to see the moves in HK as threatening.
Chang is the leader Taiwan really needs, unfortunately he is unable to moderate Tsai. TSMC will eventually be a loser in the story that is currently being written
Yeah, I can't imagine he was happy with TSMC having to cancel all its sales to Huawei. But that wasn't really Tsai's fault; nobody is able to moderate the US, and the sanctions weren't a Taiwanese policy. I was thinking reunification was really the only path to saving TSMC, but if Chang agreed, he probably would've declined the invitation to the photo op; and obviously he knows more than I do about the issues.
Instead he says reunification would destroy TSMC because of how dependent it is on overseas suppliers.
Tsai is not entirely a creature of the US, and has indirectly - perhaps initially, inadvertently - manipulated the US by pushing for an unendorsed independence, forcing the US to deal with a situation they hadn't before considered - a 'two china' outcome.
However, now that US does sees this outcome, it cannot unsee it and is thus driving hard to secure that outcome, no doubt as a stepping stone for the long term goal of regime change in PRC
As for Chang, I think status quo is his ideal outcome - de facto independence, TSMC servicing two of the biggest economies in the world, and therefore, the entire world. Not happening now though, sadly
That was an interesting idea about TSMC's influence. But the fact that there should be two separate Chinas has only become more clear each year to me, with Taiwan's increasingly democratic and successful democracy (and China's every more authoritarian and dangerous behavior). I've thought that for 30 years should be the policy, and I'm just an average US person.
Apparently you don't know what the ROC is https://news.ycombinator.com/item?id=33256578 so maybe your opinion on this topic shouldn't count; you're just repeating things you've heard that you don't understand.
The pointless nuanced arguments about Taiwan claiming to still be the real China and mainland China also claiming the same and the US saying officially we see there will be one China seem pointless to me - I'm sure some people care. The reality of the ground and the likely future attack from China to Taiwan is what I care more about. Please don't tell me what to do.
I didn't tell you what to do, I just dismissed your opinions as amazingly uninformed. Whether you want to keep spouting amazingly uninformed opinions is up to you.
I agree with many of these points. The future is unpredictable, whoever is on top today will not be on top forever, and the idea of being governed by the PRC is very unpopular in Taiwan. And nothing you have said supports our more ignorant interlocutor's point that Xi's policies have "killed China's economy".
Still, other points I disagree with.
PRC's exports to the US are not falling; they fell in 02019 due to sanctions and in 02020 due to covid, but they're already back above their 02018 level, which was the highest in history. See
https://www.census.gov/foreign-trade/balance/c5700.html. They probably will not fall within the next decade or two.
If US manufacturing becomes stronger, that will increase PRC exports to the US, not decrease them. (If the US doesn't have anything to trade for Chinese products, it will not get them, which may cause them to be sold to different customers or may cause their production to be reduced.)
I think increased interest rates abroad would tend to increase PRC's exports, not decrease them. As far as I know, PRC isn't borrowing money from abroad to finance expansion of production capacity; it's lending money abroad to finance consumption of its exports.
PRC's population is not shrinking, though it's barely growing and may start shrinking soon. Most of their trading partners have growing populations.
TSMC cannot be taken, even today; it can only be destroyed. Today, doing that would be counterproductive to PRC because so much of their domestic industry depends on TSMC, but the US has forced TSMC to impose sanctions on PRC's military. This is an existential threat to the PRC. If the sanctions continue, or are removed but could plausibly be reimposed, and TSMC remains strategically important, at some point PRC leadership will act to remove the military advantage this gives the US and its satellites over them, even if that means paving Taiwan with Trinitite. The alternative is to be unable to respond to military attacks from the US.
Reducing exports only improves your economy if the exports are stolen, for example in the Congo Free State or the Irish Potato Famine. Weaker forms of this are known as "Dutch disease" or "the resource curse". This is very much not the case in PRC. Historically, export-led industrialization has been by far the most important cause of economic growth. By contrast, your prescription of import-substitution industrialization has failed everywhere it was tried, including, for decades, in PRC.
Increased exports leads to increased specialization and increased capitalization, which increase productivity. Unless, again, we're talking about enslaved laborers who are not in a position to capture any value from their increased productivity, this increased productivity leads to increased earnings, which increases domestic consumption. This has been known for centuries and is agreed on by virtually all economists.
Your implications that Chinese people do not value education, and that lack of education causes low consumption in China, could hardly be more false. Chinese culture has prized education highly for thousands of years. It's one of the key distinguishing features of Chinese culture. Expensive private tutoring companies were a hot startup sector until the government crackdown.
> Great silicon part, and quite timely as we were forced by HQ last Friday to revise all product line designs to comply with 100% Chinese domestic semiconductors & passive components by latest Q4 end. All western sourced/accounts and parts are now forbidden, apart from those sourced by HQ’s registered jurisdiction.
> Worth adding to the list, we’ve also signed accounts with GigaDevice and Expressif Shanghai in the MCU and connectivity range. Thanks for the info, we’ll get in touch with WCH and have a few shipped over for bench tests.
Although another commenter claims GigaDevice and Espressif have all their parts made by TSMC?
> Expensive private tutoring companies were a hot startup sector until the government crackdown.
This is almost entirely due to the Gaokao. Also, there's a difference between prizing education as a means to make money, and prizing education as a means to make a well-rounded person. The concept of a 'liberal arts' education in China barely exists, from the standpoint that education isn't about vocational skills to enrich yourself monetarily, but to enrich oneself as a person.
Fundamentally, I don't think an authoritarian state that constricts intellectual, academic, and political freedom, combined with an educational system that acts largely as a vocational gatekeeper, is conducive to the free questioning that is at the heart of innovation.
Western education tends to teach rebellion. Rebellion against your parents, against the government, against the status quo. The way you get a Steve Jobs or an Elon Musk is to have someone, who is told no over and over again, "you can't do this", to say "f*ck it, I'm doing it anyway, no matter how stupid or impossible you say it is."
It's this rebellion that's at the heart of innovation. And I don't think Confucian or CCP values rebellion very much.
galangalalgol's assertion, as I read it, was that China was domestically consuming only 81% of its production because the populace was insufficiently educated because not enough money was being spent on education, and maybe that the cause of this was economic inequality.
Are you supporting that assertion, or are you making an unrelated point about educational models? Because the connection isn't clear to me.
To the question of vocational training vs. liberal arts education, I think you're exaggerating subtle differences in cultural attitudes toward education that really do exist. Schools in China have compulsory classes in physics, chemistry, biology, geography, and history, among other things — vocational training for a few percent of the population, but liberal arts for the rest. The most respected form of education is still calligraphy.
And, despite paying lip service to free questioning and rebellion, Western schooling consists almost entirely of intensive training in obedience and conformism: https://www.cantrip.org/gatto.html
Steve Jobs wasn't the product of the Western education system; he was the product of LSD, his machinist father, a neighborhood full of engineers, working at Hewlett Packard at 13, Hare Krishna prasad, Zen Buddhism, a pilgrimage to India, Transcendental Meditation, and Primal Scream Therapy, but especially LSD. Elon Musk isn't the product of the Western education system; he's the product of his emerald-tycoon engineer father, his supermodel mother who spent her childhood seeking the Lost City of the Kalahari, and his Commodore VIC-20.
Maybe if they'd been schooled in China they would have had the independence conditioned out of them, I suppose. But I think that's more a matter of the surrounding society than the school system.
> Are you supporting that assertion, or are you making an unrelated point about educational models? Because the connection isn't clear to me.
I'm just reacting to the point about tutoring as a proxy for valuing education, when in my experience (living in China, and with my extended Chinese family), this mostly results from pressure over the Gaokao. In the US, college admissions aren't so test focused, indeed, a lot of colleges don't even require the SAT/ACT or AP scores for application.
> And, despite paying lip service to free questioning and rebellion, Western schooling consists almost entirely of intensive training in obedience and conformism
Yes, K-12 is mostly about indoctrinating kids into the requirements of society. Nevertheless, Western kids rebel against their parents and school, and media even celebrates this rebellion. Moreover, a growing number of parents commit to alternative K-12 schooling. I sent my kids to Montessori schools when it was possible.
> But I think that's more a matter of the surrounding society than the school system
The school system is a reflection of the surrounding society. If we were analyzing a country where most of the schools were religious schools that drilled a religious book, we'd obviously view the structure of the school as based on the values of the society. To the extent that K-12 education strips kids of their individualities and passions and independence, as it happens in both the US and China, the degree of harshness is substantially more in Asia in general. US school kids come home and after homework (if they do it), tend to play. Asia is renown for kids finishing school, then beginning after-school education, tutors, etc some of them study from 13-16 hrs/day in junior year.
My son is a senior in HS, his first class is 9am, he gets home at 3:30. He has 1hr lunch, and 1hr during the school day of advisory/study hall (tutoring). 2hrs of homework a day max. So about 8-9 hrs of study total. His peer in Shanghai is doing almost double that.
But I do think Chinese culture has greatly valued education (and standardized testing) for about 20 times as long as the gaokao has existed; in that sense, too, the school system is a reflection of the surrounding society, not only vice versa. It's true that the "education" in question has often been more a matter of convincingly repeating established doctrines than of repudiating them, and often valued because it was a gateway to material gain, by way of standardized testing.
On the other hand, I never see the kind of anti-intellectualism that got Trump elected in the US (and Hitler in Germany) in the families of my Chinese friends. I know it can exist in Chinese culture — the Cultural Revolution had plenty of it — but it doesn't seem to be a dominant thread the way it is in the US. And this is true of families from Taiwan, too; it's not just a Mainland Chinese reaction to the CR. They just don't seem to have the nerd/egghead stereotype.
(And I still don't understand why that other person thinks Chinese people don't spend enough on schooling or why they would consume more if they did.)
I definitely agree with you that the US has a really bizarre kind of anti-intellectualism going on, and the GOP is kind of leveraging it, because much of their voting base is rural and old and less educated, and so they're basically putting out this divisive message that educated people are these "other" folks, and 'real americans' are the less educated people. Sarah Palin literally said it directly in a speech. One GOP Senator called an opponent who had multiple college degrees "a snob" .
In general, I think this 'rebel' instinct can go either way. It can lead you to challenge the status quo and make an improvement, it can also lead you to think you're a rebel because you deny the moon landing, or you're a flat earther, or an anti-vaxer. Anti-establishmentarianism can turn from a legitimate gripe into a conspiracy rathole really quickly.
From "I don't wanna wear a mask or get vaxed" to "vaccines are implanting you with Bill Gates microchips!"
It's kinda weird how Americans would look down on a very qualified political candidate with lots of degrees, but then boost up a blithering idiot because "he's one of us". No where else is that attitude prevalent. When you are flying commercial airlines, do you want the unqualified, uneducated guy flying the plane? When you're getting heart surgery, do you want the guy who never went to med school doing your surgery? But somehow, when it comes to politics, the guy who studied economics, history, political science, engineering, somehow loses points.
They are still growing, they are still getting stronger, but for how long? Meanwhile 70% of Taiwanese residents now identify as Taiwanese rather than Chinese?
If they wait for that percentage to climb, and for TSMC to diversify fabs to other places? The cost to take Taiwan is going up, and the prize for taking it is falling with no reason to expect inflections in either. If they don't take it now, there is really no point taking it at all.
Rationally speaking, there probably already isn't any point in taking it. It would tank exports and speed the adoption of local manufacturing elsewhere. All to get a temporary stranglehold on chip supply? What would they do with those chips? They are already far too export dominated. They need consumers to reduce their exports. If they want to win the long game, let their 1% give half their wealth to educating knowledge workers to buy their manufacturing rather than exporting it.