First, most production of Chinese cars is meant for Chinese consumption. Foreign exports is but a tiny part of their sales. Some EV companies sell to foreign countries less because there's insufficient demand domestically, but more because they have trouble competing domestically.
Second, we don't have overcapacity, we have undercapacity. We're nowhere near 90% of all cars on the road being electric. It's crazy that on the one hand pepple can recognize that climate change is a mortal threat to humanity, yet on the other hand say that we have an EV overcapacity when we're nowhere near the end of electrification.
Third, the world is not just the west. There is huge demand for Chinese EVs in ASEAN, the Middle East, Africa and South America. They don't have domestic car production anyway so they don't care whether Chinese cars displace western cars.
> Yet the tens of billions of dollars spent propping up Huawei and similar firms could have been spent shoring up domestic consumption so that it could subsidize these champions.
They follow an entirely different paradigm than what the west typically understands as consumption. They shore up domestic consumption by developing the supply side w.r.t. quantity, quality and costs, not by giving households more money. Check out this thread: https://twitter.com/GlennLuk/status/1819755453179715635
> What do you do with the vast majority of the workforce who does not have the skills to work in high skilled manufacturing or services jobs?
The Chinese economy is intentionally undergoing a shift away from the traditional pillars of construction and low-end manufacturing, towards high-end manufacturing and services. Eric Li described this best in his talk last year. Yes, this shift is bound to be painful in the short term. A lot of people need to be reskilled. The old winners have been handicapped and the new winners aren't there yet. It can't be helped. All this is necessary, short-term pain for long-term gain. https://youtu.be/Vb835NzfzFw
In this sense, China’s population decline is necessarily bad. Do you think China will run out of people first or out of jobs first?
