This is wrong. It is NOT in their nature to keep the market under-supplied -- eg, Samsung, the industry's largest company, was notorious for expanding their capacity during the industry downturn to gain market share while everyone else was cutting back to minimize loss.
I'm guessing you are also probably unfamiliar with the terms like "chicken game" which refers to the cutthroat, high-stakes price wars where dominant semiconductor manufacturers intentionally overproduce and slash prices. This is literally how the industry went from dozens to just three majors today since the 80's.
IMO, that remains to be seen. China is still adding new coal capacity roughly equal to America's entire coal capacity, or about ~160+GW, just in 2025(74GW)/2026(90+GW expected) while retiring almost none.
>> as if Samsung didn't receive government subsidies when it was developing
That's because Samsung didn't get gov't subsidies when they developed DRAM in the early 80's. Semiconductors weren't really among the targeted industries by the South Korean gov't and were largely ignored as the govt prioritized HCI (Heavy Chemical Industry), shipbuilding, steel, and automobiles. The gov't didn't understand the potential of semiconductors and viewed the growing industry as risky investment.
Unlike China or Taiwan, the South Korea's semiconductor industry was very much organic, started by a private company, Korea Semiconductor, in the mid 70's which was later acquired by Samsung and became Samsung Semiconductors Inc. And they bled millions of their own money until their own DRAM came out in the early 80's.
The gov't still believed the industry was too risky and costly even after Samsung's development of 64K and 256K DRAM in 1983 and 1984. Samsung burnt through their own cash stockpile cross-financed by other divisions, or borrowed from foreign banks and financial institutions. There was really no major support until 1986 when ETRI, a gov't sponsored research institution, stepped in to promote cooperation among domestic semiconductor players -- ie, so Samsung could teach and help bring up other chaebols LG and Hyundai up to speed.
So PLEASE no more insane whataboutism to defend China's neo-mercantile practices or illegal state subsidies.
Samsung closed the last Chinese smartphone factory in 2019 and moved South to Vietnam. In 2020, Samsung's Vietnam production accounted for about 25+% of the country's GDP and export.
IMO, and it's not even really clear how Samsung's DRAM business really benefited from the state backing. The South Korea gov't first major initiative "Semiconductor Industry Promotion Plan" started only after Samsung'd developed their first 64K DRAM in 1983. It really helped other local industry competitors such as LG and Hyundai catch up, but Samsung was already on a roll -- by the early 90's, the company became the first to develop 256Mb DRAM. Not clear whether they really needed hand-holding from the gov't.
why? Xi already made his intention with Taiwan clear many years ago. Besides, Xi, while pretending to be neutral, has become the major backer of Putin's war effort. It's not like Trump is doing anything special.
>> There is ZERO concern of the current US administration about the welfare of Venezuelans,
I don't think this was a humanitarian mission. I'm speculating from Trump's perspective, Maduro was a major de-stabilizing factor. The Western world also seems to tacitly agree that the man had to go -- I don't think Maria Machado's recent Nobel Peace Prize was coincidence.
>> They now make a product that it turns out people want (reliable/economy)
Sure, Ford has always made cars that their customers want, F-150 for instance, the best selling vehicle in the US for an unbroken streak of nearly 50 years, during which it continued to improve and maintain its popularity. The Chicken law has done wonders for the American automakers.
>> ... the focus on long term reliability.
Sure, I don't question the Japanese automakers' reliability, but, in the cheap, small vehicle segments they compete with the Japanese import, the American automakers are now more or less wiped out. Most small, affordable vehicles from GM and Ford are now made in either Mexico or South Korea. So where is their "competitiveness" that otherwise wouldn't exist without the Japanese imports? In other word, the Japanese imports clearly did not prevent the "loss of competitiveness in the future."
>> Rent seeking is industry suicide.
If it's as bad as you say it is, why turn a blind to China's rent seeking past 15 years and promote their industry, which again benefited tremendously from forced JV, forced tech transfer, restrictive market access/licensing, local content/sourcing/production, high-tariffs, shadow-banning foreign competitors, arbitrary regulatory/safety barriers, etc?
I think we can glean a lot of lesson from the Chicken Tax past 60+ years and China's rent-seeking policies in the EV business past 15 years. We know what works and what doesn't -- and BYD is not it.
>> No one suggested the court/process itself was dodgy/unfair.
Not sure where this is coming from. The EU recently just won a WTO dispute[1] against China that prohibited patent holders (often EU companies) from pursuing or enforcing patent infringement cases in non-Chinese courts -- it violated several provisions of the WTO's Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS Agreement), including Articles 1.1, 28.1, and 28.2.
Foreigners generally view the Chinese court system with significant skepticism, primarily due to a perceived lack of judicial independence from the ruling Communist Party (CCP), opacity, and the use of the judiciary to serve political goals.
1. DS611: China – Enforcement of Intellectual Property Rights
>> This is just going to hurt US car manufacturers.
still don't understand why this is going to hurt US car manufacturers. Have the Japanese auto imports improved the US auto industry past 40+ years? Is Ford or GM more competitive? The US automakers are highly competitive in large vehicle/truck segments, protected under the Chicken Tax past 60+ years, but they barely have any presence left in small, cheaper segments dominated by the Japanese and Koreans. Farley recently said Ford has shifted its focus from affordable, mass-market cars because it couldn't compete against the Japanese/Koreans.
Just not convinced that allowing autos from another auto industry built on forced joint venture/tech transfer, illegal (export/local content) subsidies, or otherwise benefited tremendously from the very same rent-seeking policies themselves past 15 years is solving the real problem.
>> I'm fairly sure the subsidies are perfectly legal by local laws.
Sure, China's NEV subsidies are illegal and that's why Chinese EVs should stay in China. Too many folks still don't understand why Chinese EVs are countervailed not only in the US, the EU, Turkiye, Canada, but also why China's ally countries such as Russia and Brazil are imposing restriction on Chinese EVs (or the legal basis).
>> In any case, feel free not to buy goods you don't like. No one is forcing you to buy, or are they?
Sure, but no point in marching around virtual-signaling as if Chinese EVs and illegal subsidies are pro-consumer.
How does German gov't subsidize their automakers' overcapacity? Their EV subsidies aren't/weren't exclusive to domestic EVs or EVs using certain domestic part. No issue with subsidies that are equally available to all eligible producers, domestic or foreign.
This is unlike in China where market access and EV subsidies were conditioned on forced tech transfer since 2011 -- for which China was litigated before the WTO (see WT/DS549 China - Certain Measures on the Transfer of Technology). Or worse, conditioned on using local batteries made by local battery "champions," CATL/BYD/etc only to funnel all NEV subsidies back to the local battery industry and undermine foreign competitors. In other word, no NEV subsidies to any EV with foreign batteries to protect local "champions." This practice is also illegal under Article 3(b) "Prohibition" of the WTO's Subsidies and Countervailing Measures (SCM) Agreement.
>> Technically, the USA only has the massive subsidies part since the ...
Biden's IRA subsidy ended in September. And let's realistic, the IRA was a weak and short counter measure against China's illegal practices past 15 yeras.
>> Shouldn't we be writing thank-you notes to the Chinese tax payers who so graciously subsidies cheap cars for us?
I'd write a BIG thank you note to the Chinese taxpayers if they could send a direct cash payment instead, so I can use it towards my next EV purchase (of my own choosing).
Otherwise, I prefer not to participate in China's predatory pricing tactic enabled by illegal export subsidies to undermine foreign competitors and distort global market.
I'm guessing you are also probably unfamiliar with the terms like "chicken game" which refers to the cutthroat, high-stakes price wars where dominant semiconductor manufacturers intentionally overproduce and slash prices. This is literally how the industry went from dozens to just three majors today since the 80's.