China To Subsidize Smartphone Purchases in Bid To Lift Spending (yahoo.com) 29
China will expand consumption subsidies to cover smartphones and other electronics, in a step to promote domestic spending as external headwinds pick up. From a report: A national trade-in program that currently applies to home appliances and cars will broaden this year to include personal devices like phones, tablets and smartwatches, officials from the nation's top economic planning agency said in a briefing Friday.
Chinese consumers in the post-Covid era have begun holding onto their smartphones longer, given a lack of exciting new features and general belt-tightening. As with cars and washing machines, investors hope incentives will revive the world's largest smartphone market and drive sales for not just brands such as Huawei and Xiaomi, but also galvanize business on platforms popular with device fans like Alibaba Group and JD.com.
Chinese consumers in the post-Covid era have begun holding onto their smartphones longer, given a lack of exciting new features and general belt-tightening. As with cars and washing machines, investors hope incentives will revive the world's largest smartphone market and drive sales for not just brands such as Huawei and Xiaomi, but also galvanize business on platforms popular with device fans like Alibaba Group and JD.com.
external headwinds (Score:2)
Which direction does the wind have to blow to be a headwind for China?
Re: (Score:2)
Which direction does the wind have to blow to be a headwind for China?
Whichever direction Trump is.
With his tariffs Trump promises to be an even bigger headwind for the US economy than the Chinese one so I suppose it boils down to which end of him expels the most air.
Re: (Score:3)
This submission would seem to indicate otherwise. Chinese industry needs foreign markets more than foreign markets need Chinese industry.
Re: (Score:1)
You are forgetting one simple thing though: it takes seconds to enact a tariff with the stroke of a pen, and years to build and staff factories to produce goods domestically.
What happens in the time between those two events? You, me, and everyone else gets fucked by massive inflation. But hey, at least you're sticking it to China while not able to make the budget pencil out, right?
Re: (Score:3)
It's even worse than that. A lot of chinese manufacturers openly talk about post-covid sales in China being unprofitable or break even at best, and foreign market profits keeping them alive.
Fundamental problem is Chinese industrial policy, which effectively functions to move money from citizenry to manufacturing via things like wage suppression and loan regimes. But that means that domestic consumption is severely stunted and cannot consume what is being overproduced. Hence the need for foreign markets to a
Re: (Score:2)
Cheaper production in Mexico than China (Score:2)
https://www.statista.com/stati... [statista.com]
https://www.cnn.com/2024/04/28... [cnn.com]
Labor and other manufacturing costs are significantly lower in Mexico than in China and the goods can be transported by rail directly into the USA at much lower transportation cost than a transpacific ocean ship.
Re: (Score:2)
This submission would seem to indicate otherwise. Chinese industry needs foreign markets more than foreign markets need Chinese industry.
This is not clear. If Americans were incensed at the inflation from the past 1-2 years, they would be horrified at the greater inflation from turning off the cheap Chinese products spigot that Americans have become addicted to over many decades.
Yes, Chinese companies need exports. But it's definitely not true that Americans will simply accept the significant inflation that would come with restricting Chinese imports.
Politicians (of all parties) always claim that tarriffs and trade restrictions will increa
Re: external headwinds (Score:1)
"foreign" and "usa" are not the same thing.
Re: (Score:2)
From the west (USA and EU). Tariffs and sanctions do have effects*.
*not always the expected/promised effects... unintended consequences are a thing.
Great news, eh? (Score:2, Informative)
An often-repeated piece of Soviet/russian propaganda is how yuge the US debt is vs the GDP, and how it will kill the dollar and the US economy anytime now. It's been continuously running since at least the 1970s.
Guess what, the debt as % of GDP of China, the russian master, overtook that of US three or four years ago and now stands at 292% and is increasing.
This comes without the fat and soft pillow of the US assets, which are double in absolute terms and an order of magnitude higher per capita than those o
Re: (Score:1)
LOL. Most of the US debt is owned by US persons, China, still a third-world shithole, simply doesn't have the money to buy that much.
Re: (Score:2)
US debt is denominated in USD. That US can print.
If it was really "oh noes, they're coming to collect and they'll fuck us", US can simply print the dollars needed to pay off all the debt. Yes it will be hugely inflationary, but if you're talking about "getting fucked" vs "inflation", choice is obvious.
And that means "getting fucked" isn't even on the table even if PRC held 100% of US debt. And it holds but a small fraction.
Re: (Score:2)
No, because their entire banking system is fundamentally backed by leveraged T-bills. US would have a few years of inflation. PRC would lose its entire economy as its critical entire banking sector would crash overnight due to rapid contraction in number of leveraged T-bills. And everything in PRC works on leverage.
This isn't cutting off nose to spite face. This is dousing yourself in gasoline, walking over a massive storage of gasoline emitting a lot of fumed, and then lighting yourself on fire. There won'
Not just in China (Score:2)
Google Pixel had 8GB of RAM from gen 5 to gen 8. Why would you update if you are still struggling for RAM with a new phone? Only the 9 has finally increased the amount of RAM, and it is still not great.
Of course the next question is whether phones will actually need neural processing units. That could be a game changer.
Phones have reached their optimal design (Score:3)
Re: (Score:2)
And due to COVID part shortages, even the specs have hardly improved. Why pay a lot of money for a phone that does pretty much exactly the same as a 5 year old one?
Short term gains (Score:3)
Too dependent in foreign markets (Score:2)
There isn't enough domestic growth to carry China's industry. Subsidies won't work in the long term, and maybe even won't work in the short term.
Re: (Score:2)
Subsidies have worked in long term. The problem is that this made industry dependent on them. Everything from wage suppression to industrial loan policies to forced labor. But these are essentially transfers from populace to the industry. And that means populace is not wealthy enough to consume what overfinanced industry produces. Hence the need for foreign markets to keep the system running.
Re: Too dependent in foreign markets (Score:2)
More like bailing out Huawei and Xiaomi (Score:2)
China needs a Universal Basic Income? (Score:2)
https://ubiadvocates.org/ubi-s... [ubiadvocates.org] ..."
"Universal Basic Income can stimulate consumer spending, a key component of economic stability.
Buying their own phones (Score:4, Interesting)