China's 'State Capitalism' Sparks a Global Backlash

WSJ ^ | 16 Nov 2010 | JASON DEAN, ANDREW BROWNE And SHAI OSTER

[Palter]

Since the end of the Cold War, the world's powers have generally agreed on the wisdom of letting market competition—more than government planning—shape economic outcomes. China's national economic strategy is disrupting that consensus, and a look at the ascent of solar-energy magnate Zhu Gongshan explains why.

A shortage of polycrystalline silicon—the main raw material for solar panels—was threatening China's burgeoning solar-energy industry in 2007. Polysilicon prices soared, hitting $450 a kilogram in 2008, up tenfold in a year. Foreign companies dominated production and were passing those high costs onto China.

Beijing's response was swift: development of domestic polysilicon supplies was declared a national priority. Money poured in to manufacturers from state-owned companies and banks; local governments expedited approvals for new plants.

In the West, polysilicon plants take years to build, requiring lengthy approvals. Mr. Zhu, an entrepreneur who raised $1 billion for a plant, started production within 15 months. In just a few years, he created one of the world's biggest polysilicon makers, GCL-Poly Energy Holding Ltd. China's sovereign-wealth fund bought 20% of GCL-Poly for $710 million. Today, China makes about a quarter of the world's polysilicon and controls roughly half the global market for finished solar-power equipment.

Western anger with China has focused on Beijing's cheap-currency policy; President Obama blasted the practice at the G-20 summit in Seoul last weekend. Mr. Zhu's sprint to the top points to a deeper issue: China's national economic strategy is detailed and multifaceted, and it is challenging the U.S. and other powers on a number of fronts.

Central to China's approach are policies that champion state-owned firms and other so-called national champions, seek aggressively to obtain advanced technology, and manage its exchange rate to benefit exporters.

[Will88]

The data seems to be pretty scattered out at the Census Bureau, but here is some basic data for 2009 and YTD 2010:

http://www.census.gov/manufacturing/m3/prel/pdf/table1p.pdf

That came from this page, under “Full Report Highlights”, the first drop down, Table 1.

http://www.census.gov/manufacturing/m3/

Logging off for tonight.

[1rudeboy]

None of that had anything to do with that EPA regulation you mentioned, and I said nothing to disagree with the point you made.

I've seen enough of the way protectionists argue, so I agree with your observation that, when a point is made, a protectionist ignores it and tries to change the subject (or otherwise).

[1rudeboy]

So would you say, the “[v]ery little left of the textile industry in the US,” manages to produce roughly 5 billion dollar’s worth of product per year?

[Will88]

I've seen enough of the way protectionists argue, so I agree with your observation that, when a point is made, a protectionist ignores it and tries to change the subject (or otherwise).

As I've already said, your point was irrelevant to anything I had said. Pointless points seems to be a specialty of yours and a few others.

[1rudeboy]

Come off it. You were maintaining that onerous regulations affect "new coal or nuclear plants, and a few other industries," but that their influence on the economy is minimal. I provided you with an example of how the EPA is beginning to regulate dust, affecting practically everything but a few other industries, and you start blathering about pavement.

This, on a thread where some guy builds a $1B plant in 15 months.

[Will88]

So would you say, the “[v]ery little left of the textile industry in the US,” manages to produce roughly 5 billion dollar’s worth of product per year?

US Textile Production Reaches New Low

There is one little article you can read. And all these total this and total numbers you and others like to throw around are practically meaningless. The next number you need would be total retail sales of textile products in the US to compare with that production figure.

I've posted before that some very informative data would be, for several years going back several decades:

The value of specific goods produced in the US.

The value of specific goods consumed in the US.

And those figures for total manufactured goods produced in the US, and the total consumed for various time periods. How much do we produce of what we consume, now and in the past?

I'll probably research that gradually, but not today. But I'm sure there are some total figures for textile product sales at the Census site. It's just not the best organized site ever.

[Will88]

Come off it. You were maintaining that onerous regulations affect "new coal or nuclear plants, and a few other industries," but that their influence on the economy is minimal.

Nothing to come off of. Warehouses and new plants of various sorts are being routinely built, but the same cannot be said of coal fired and nuclear power plants. There are building codes and regulations that affect any project, but the projects mostly go through and are built, with the category of exceptions noted.

And, most anyone would know, municipalities and states are constantly recruiting (begging) industries to locate and build in their areas, with the building site already provided, along with often lavish other incentives.

US Census - Retail Sales

The census categories I found are not consistent from production through wholesale and retail sales, but it looks like in 2008 Clothing stores sold about $216 billion, quite a mark-up on the $5 billion in US textile production for 2009 (?) The imports must be quite a bit more than domestic production, maybe about 80% or more of the retail clothing market in the US.

[Will88]

You on board with the 25% tariff on imports from China recommended by Donald Trump? He might even run for president (I doubt he will).

[Will88]

That $216 billion for retail clothing sales will be too low. It looks like the Wal-Marts and other department stores are in different categories (but it includes jewelry). Safe to say retail clothing sales will over $200 billion annually, and probably $250 - $300 billion.

The Census categories I’ve found so far don’t make things easily comparable. I think I’ll try to find some industry sources that might have developed such comparisons from production through retail sale.