China / U.S. technology race

[easyrider16]

From New York Times "The Morning" email:

In recent decades, however, American investment in research and development has lagged:

(graphic showing China spending 1.3% GDP, while US is only spending 0.65% GDP)

The U.S. now spends a smaller share of national output on research and development than many other countries. China is notably ambitious in this area, essentially copying the American strategy for building a strong economy, even as the U.S. has abandoned that strategy.

In The Wall Street Journal this week, Graham Allison, a Harvard professor, and Eric Schmidt, the former C.E.O. of Google, wrote, “In each of the foundational technologies of the 21st century — artificial intelligence, semiconductors, 5G wireless, quantum information science, biotechnology and green energy — China could soon be the global leader.”

“Right now, America makes zero percent of the most sophisticated chips,” Gina Raimondo, the commerce secretary, told me recently. “That’s a vulnerability.” Taiwanese companies like TSMC manufacture many of the most sophisticated chips, which means that a disruption there — hardly out of the question, given China’s aggression — could disrupt the global economy.

“We need to make more chips in America,” Raimondo said.

The article goes on to blame democrats for failing to pass a bill increasing funding for scientific research.

[XtremeJibber2001]

Spent time in Asia a decade ago. They were ahead of us then in many areas and continue to be now. You can barely buy technology today without Chinese made chips. It was only a few years ago China used microchips to compromise US technology companies/hardware ... we haven't done much since then.

Separately, we saw how vulnerable as a country we are (and our supply chain) when almost all manufacturing we rely on is on the other side of the ocean. That said, China relies on us heavily to fuel their economy.

No one on either side of the aisle seems to be making any material waves w/ China.

[Mister Moose]

No one on either side of the aisle seems to be making any material waves w/ China.

Follow the money. Even if you can't see it reported on, you can see its effects.

I've long been in favor of eliminating the huge trade deficit with China. That view has only strengthened. If we need/insist on cheap labor to fuel our clothing, cell phone and toaster appetite, we should diversify our trade partners.

[deadheadskier]

It's more than just consumer goods.

Virtually all medical technology is reliant on Chinese manufacturing. Even GE, the "American" manufacturer of medical devices gets roughly 49% of the components to their equipment made in China and does the final assembly here in the US such that they can be the preferred vendor on the VA contract. If it weren't for that contract and the optics, they'd source much more from China.

That toothpaste is out of the tube in med tech. You're not going to see that change.

[XtremeJibber2001]

No one on either side of the aisle seems to be making any material waves w/ China.

Follow the money. Even if you can't see it reported on, you can see its effects.

I've long been in favor of eliminating the huge trade deficit with China. That view has only strengthened. If we need/insist on cheap labor to fuel our clothing, cell phone and toaster appetite, we should diversify our trade partners.

Agree. Even our military uses Chinese made parts like electronics, integrated circuits, transistors, etc. All of this stuff is used in our satellites, missiles, etc.

[easyrider16]

It's going to take more than tariffs to change things. Trump's tariffs, kept in place by Biden, have done little to change the situation. I know a guy who works as an engineer at Kuerig. I asked him how Trump's tariffs were affecting his company, since all their coffee makers are assembled in China. He said it hasn't affected them one bit. They just eat the cost and keep going. That's obviously just one anecdote, but I think the overall data supports that it seems to be the norm.

We need a more comprehensive plan to bring manufacturing home (unlikely) or diversify our supply chain (which doesn't seem to be happening at present, in spite of everything that's taken place). Neither party seems to be offering any kind of constructive solution.

[XtremeJibber2001]

We need a more comprehensive plan to bring manufacturing home (unlikely) or diversify our supply chain (which doesn't seem to be happening at present, in spite of everything that's taken place). Neither party seems to be offering any kind of constructive solution.

Bringing manufacturing home would mean cost of goods going through the roof. Economy would be destroyed. I am not an economist

[throbster]

The tariffs are working:

https://www.wsj.com/articles/us-china-t ... 1638663970