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The Fine Print: The following comments are owned by whoever posted them. We are not responsible for them in any way.
byTablizer ( 95088 ) writes:
...order to induce R&D, but the side effect is a glut of cars and mass collapsing of brands. Chinese citizens got dicked by a tator, who treats them like guinea pigs.
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byviperidaenz ( 2515578 ) writes:
Chinese citizens get cheap cars funded by government R&D money.
Who's been dicked here?
The car companies take government money and build cars
The car dealers buy them real cheap and sell at a profit
The consumers get cheap cars
The only ones "losing" money are the government. But they're just printing it. And building a massive manufacturing industry with development capability as well. Selling on a global market to everyone else at prices no one else can compete with.
byLuckyo ( 1726890 ) writes:
Actually PRC's funding model is mass transfers of wealth from citizenry to companies. This is a well understood policy that has been in place at least since Deng.
This is why their citizenry has such low consumption power related to state's economic prowess compared to pretty much everyone else in the world, and why PRC is so horrifically dependent on exports to actually consume what they produce.
bythsths ( 31372 ) writes:
Exactly. This is inflationary policy, not deflationary. The depression in prices is just temporary.
But the US seem to really struggle to understand it.
byblue trane ( 110704 ) writes:
What if printing money doesn't actually cause inflation unless you can't access US dollars through capital markets (as Venezuela can't, and Weimar couldn't)?
byPinky's Brain ( 1158667 ) writes:
The cars are cheap, but ironically still not cheap enough for Chinese workers. Xi would rather let the cars rot than more Chinese get a little more luxury.
byLuckyo ( 1726890 ) writes:
This isn't fair to Chinese government. Their entire societal model is built on low consumption high production mass transfers from people to industry. This has been reinforced for decades, and they already saw with Evergrande what happens if government tries even the tiniest deflation of the bubble this produced.
So they're naturally excessively cautious about changing flows of wealth within the system as to avoid crashing it entirely.
byphantomfive ( 622387 ) writes:
Who's been dicked here?
The government. That's why they are complaining (according to the summary).
byTablizer ( 95088 ) writes:
If you purchase a car from a soon-to-be-defunct company, you will have maintenance and resell headaches down the road.
byDrMrLordX ( 559371 ) writes:
And that isn't the only over-subsidized market in China.
byLavandera ( 7308312 ) writes:
These factories are not over-subsidized.
These is prime industrial capacity for military drones production.
China currently has now probably more potential military drones capacity than rest of the world combined...
byCyberax ( 705495 ) writes:
...order to induce R&D, but the side effect is a glut of cars and mass collapsing of brands. Chinese citizens got dicked by a tator, who treats them like guinea pigs.
There is no "glut of cars". China still has a lot of unmet internal demand. The problem is that EVs are becoming a commodity in China now. So all the business models designed to exploit high-margin expensive products are becoming obsolete.
Dealerships are suffering the most, there is simply no margin for them to exist anymore, so they're doing all kinds of tricks to make sure they appear to be useful to carmakers. The double whammy is the fast depreciation of EVs. Just like with computers in the 90-s, peo
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