I thought that capitalism was based on the principle of perfect knowledge and constant improvements in the process of production, thus delivering cheaper and better goods to all. The US apparently sees it as a static system, in which the US firms achieve superior processes of production and keep that advantage over all other producers in perpetuity. Sorry, Uncle Sam, that is not how capitalism is meant to work, and it is not how it works in practice. If you decide that you don't really like capitalism, you could always try communism. Now that would be a turn around wouldn't it?
Forgot to start with: good article! [It appears I can edit comments...]
I wrote in a similar on my substack, drawing upon 30 years as a judge for an auto industry innovation award, plus my own research as an economist on the development of the Japanese auto industry. See: https://smitka.substack.com/p/confusing-fast-followers-with-ip The Chinese are fast followers, helped by large investments in STEM education.
Tesla is an example of a firm that chose not to capitalize on its early lead. First, it failed to develop new models, so has nothing up- or down-market from the "B" (midsize) segment of the Model 3/Y. That segment covers under one-third of the market. So while the Model Y was the best-selling single model in June 2025; at peak, with just 2 models, Tesla held a 3.2% market share. That was down to 2.2% in 2025Q2.
Second, while it changed the underpinnings (such as using large aluminum castings in the chassis in place of welded steel), it has not redone the overall architecture. So even when it comes to castings, Chinese firms have been able to improve on Tesla's design to take out weight (= greater range) and cost. Because such changes interact with body design, Tesla can't do that without coming out with a new car model. Ditto how it does its battery packs, at least in the US the Model Y and CyberTruck still use cylindrical cells with lots of wiring and foam to fill in spaces. Everyone else uses a blade or similar "flat" structure that lends itself to modularity (including Western rivals).
So they have outdated style and outdated technology. That was a deliberate choice of Musk, who has bet the company on robotaxis. With 249 EV and 138 PHEV models in the domestic Chinese market in 2025Q2, Tesla couldn't afford a mis-step. Instead it's basically (and inexplicably!) chosen to exit the passenger vehicle market. It now (2025Q1-Q2) makes minimal profits from selling cars.
Every technology becomes common knowledge eventually. These are big, sophisticated firms, and they have figured out the tradeoffs. Nobody expects to keep their advantage forever. This is what pushes companies to keep innovating.
99% of the time, people mean the Anglos, the Anglo-Americans especially, when they complain about 'the West'.
One can see why the Anglos would want a civilisational battle, but I cannot fathom why non-Americans should help them in that regard. You don't see American writers returning the favour by framing Asia or 'the East' as a unified entity.
The West is not entitled to eternal dominance in technology, and China’s rise should be seen not as a “theft” but as a competitive challenge that forces everyone to innovate and adapt.
And all this EV innovation is ultimately made possible by the exploitation of African workers and African land and natural resources, with very little benefit to any but a tiny fraction of African people. Or is remembering the people working and dying in open pit mines too moralizing? Let's just focus on the Great Power War instead
Zichen: Nice piece. People will daresay give you that quotation attributed to V.I. Lenin:
“When it comes time to hang the capitalists, they will vie with each other for the rope contract.”
In 1955, George Racey Jordan, a strident anti-communist American military officer, attributed this line to Lenin, but no one has ever found it in Lenin’s writings. See: https://quoteinvestigator.com/2018/02/22/rope/ . It’s sort of like the nonsense about “crisis = danger plus opportunity” attributed to JFK — another bit of bullshit “Chinese wisdom”; or the misinterpretation of Zhou Enlai’s comment on the French Revolution (he was referring to the 1968 student riots, not to 1789).
The reason for failures of American capitalism are far more prosaic and, boy are some people pissed off about it. 貽笑大方。
I think this also overlooks the fact that the Chinese are in general very canny and entrepreneurial. Yes, there are fakes and ripoffs, but overall the Chinese are good at seeing opportunities. And good on ‘em. (The Japanese did something similar in their day but I’m not sure it was quite as grass roots in Japan. More led from the top, I suspect.)
why can't both be true? it can both be a trap and be one entered willingly by intelligent people after considering the pros and cons and maybe even the long-term consequences.
how can this be? may be the world is not a zero sum game and both sides can get what they want with a benefit to all - maybe each side has a different utility function.
but first, let us not forget that this was the largest transfer of wealth in history and it was particularly potent for the weak members of society - hundreds of millions were raised out of extreme poverty.
sometimes, when a foreign company invests, they reap all the profits (as is told about colonialism). sometimes, the foreign company also makes sure that the locals learn as little as possible.
sometimes, however, like with china, a requirement for a foreign company to invest and make a profit was that the technology and knowledge (especially know-how) trickle out to people in china. the deal was clear from the start and it was fair enough that many companies wanted it. now, there seems to be buyer's remorse. and there may well be acts of bad faith, even many. but no real surprises, i think. Rather, the pot was sweet enough to justify (to some) the potential downsides).
1 Before China was allowed to enter the WTO, it made a lot of promises, like open markets, respect IP, and respect labor rights, among others. It does not even honor those promises now.
2. 21st century is different than the 19th century. Piracy in the old is not a good excuse for current crime.
3. The CCP-controled China is fundamentally against the rule of law and the free market economy or capitalism. CCP's sole purpose is to maintain its tight grip over China, proving that it is always great, grandious and correct. It could decide to open the market if it deems it beneficial for its rule or close it overnight if it deems it otherwise. Think about Hong Kong. Once a prominent financial center, now becoming more and more like a city in the inner China.
To the west, whatever China does is a trap. Bear it in mind when you enter China
And all this EV innovation is ultimately made possible by the exploitation of African workers and African land and natural resources, with very little benefit to any but a tiny fraction of African people. Or is remembering the people working and dying in open pit mines too moralizing? Let's just focus on the Great Power War instead
Cobalt is still used, but the EV industry has shifted to LFP chemistries that don't rely on African-sourced metals. Still lots of the older chemistries being used for performance advantages. Not that no one buying Cobalt is good for workers, either, absent good alternatives. Being poor and desperate sucks.
I thought that capitalism was based on the principle of perfect knowledge and constant improvements in the process of production, thus delivering cheaper and better goods to all. The US apparently sees it as a static system, in which the US firms achieve superior processes of production and keep that advantage over all other producers in perpetuity. Sorry, Uncle Sam, that is not how capitalism is meant to work, and it is not how it works in practice. If you decide that you don't really like capitalism, you could always try communism. Now that would be a turn around wouldn't it?
Communism.... You mean Socialism?
The Bessemer steel process, invented by a Brit, is another one nicked by America: Carnegie in this case.
China, on the other hand, furnished the world with a shedload of innovations, some still in use today.
https://www.annachen.co.uk/2024/11/15/china-and-its-inventions-anna-chen-on-the-radio-2014/
Forgot to start with: good article! [It appears I can edit comments...]
I wrote in a similar on my substack, drawing upon 30 years as a judge for an auto industry innovation award, plus my own research as an economist on the development of the Japanese auto industry. See: https://smitka.substack.com/p/confusing-fast-followers-with-ip The Chinese are fast followers, helped by large investments in STEM education.
Tesla is an example of a firm that chose not to capitalize on its early lead. First, it failed to develop new models, so has nothing up- or down-market from the "B" (midsize) segment of the Model 3/Y. That segment covers under one-third of the market. So while the Model Y was the best-selling single model in June 2025; at peak, with just 2 models, Tesla held a 3.2% market share. That was down to 2.2% in 2025Q2.
Second, while it changed the underpinnings (such as using large aluminum castings in the chassis in place of welded steel), it has not redone the overall architecture. So even when it comes to castings, Chinese firms have been able to improve on Tesla's design to take out weight (= greater range) and cost. Because such changes interact with body design, Tesla can't do that without coming out with a new car model. Ditto how it does its battery packs, at least in the US the Model Y and CyberTruck still use cylindrical cells with lots of wiring and foam to fill in spaces. Everyone else uses a blade or similar "flat" structure that lends itself to modularity (including Western rivals).
So they have outdated style and outdated technology. That was a deliberate choice of Musk, who has bet the company on robotaxis. With 249 EV and 138 PHEV models in the domestic Chinese market in 2025Q2, Tesla couldn't afford a mis-step. Instead it's basically (and inexplicably!) chosen to exit the passenger vehicle market. It now (2025Q1-Q2) makes minimal profits from selling cars.
Every technology becomes common knowledge eventually. These are big, sophisticated firms, and they have figured out the tradeoffs. Nobody expects to keep their advantage forever. This is what pushes companies to keep innovating.
'The West' is a cognitive trap.
99% of the time, people mean the Anglos, the Anglo-Americans especially, when they complain about 'the West'.
One can see why the Anglos would want a civilisational battle, but I cannot fathom why non-Americans should help them in that regard. You don't see American writers returning the favour by framing Asia or 'the East' as a unified entity.
Divide et impera!
The West is not entitled to eternal dominance in technology, and China’s rise should be seen not as a “theft” but as a competitive challenge that forces everyone to innovate and adapt.
So right on!
And all this EV innovation is ultimately made possible by the exploitation of African workers and African land and natural resources, with very little benefit to any but a tiny fraction of African people. Or is remembering the people working and dying in open pit mines too moralizing? Let's just focus on the Great Power War instead
Zichen: Nice piece. People will daresay give you that quotation attributed to V.I. Lenin:
“When it comes time to hang the capitalists, they will vie with each other for the rope contract.”
In 1955, George Racey Jordan, a strident anti-communist American military officer, attributed this line to Lenin, but no one has ever found it in Lenin’s writings. See: https://quoteinvestigator.com/2018/02/22/rope/ . It’s sort of like the nonsense about “crisis = danger plus opportunity” attributed to JFK — another bit of bullshit “Chinese wisdom”; or the misinterpretation of Zhou Enlai’s comment on the French Revolution (he was referring to the 1968 student riots, not to 1789).
The reason for failures of American capitalism are far more prosaic and, boy are some people pissed off about it. 貽笑大方。
I think this also overlooks the fact that the Chinese are in general very canny and entrepreneurial. Yes, there are fakes and ripoffs, but overall the Chinese are good at seeing opportunities. And good on ‘em. (The Japanese did something similar in their day but I’m not sure it was quite as grass roots in Japan. More led from the top, I suspect.)
why can't both be true? it can both be a trap and be one entered willingly by intelligent people after considering the pros and cons and maybe even the long-term consequences.
how can this be? may be the world is not a zero sum game and both sides can get what they want with a benefit to all - maybe each side has a different utility function.
but first, let us not forget that this was the largest transfer of wealth in history and it was particularly potent for the weak members of society - hundreds of millions were raised out of extreme poverty.
sometimes, when a foreign company invests, they reap all the profits (as is told about colonialism). sometimes, the foreign company also makes sure that the locals learn as little as possible.
sometimes, however, like with china, a requirement for a foreign company to invest and make a profit was that the technology and knowledge (especially know-how) trickle out to people in china. the deal was clear from the start and it was fair enough that many companies wanted it. now, there seems to be buyer's remorse. and there may well be acts of bad faith, even many. but no real surprises, i think. Rather, the pot was sweet enough to justify (to some) the potential downsides).
A few points:
1 Before China was allowed to enter the WTO, it made a lot of promises, like open markets, respect IP, and respect labor rights, among others. It does not even honor those promises now.
2. 21st century is different than the 19th century. Piracy in the old is not a good excuse for current crime.
3. The CCP-controled China is fundamentally against the rule of law and the free market economy or capitalism. CCP's sole purpose is to maintain its tight grip over China, proving that it is always great, grandious and correct. It could decide to open the market if it deems it beneficial for its rule or close it overnight if it deems it otherwise. Think about Hong Kong. Once a prominent financial center, now becoming more and more like a city in the inner China.
To the west, whatever China does is a trap. Bear it in mind when you enter China
nice
Colombia proposed at the WTO Council for IP a similar discussion to the quoted Durand&Milberg one.
See a downloadable pdf version in this link (as the WTO website is not open):
https://web.wtocenter.org.tw/Page/16473/413522
And a previous opener by Colombia at the WTO here:
https://www.keionline.org/39658
And all this EV innovation is ultimately made possible by the exploitation of African workers and African land and natural resources, with very little benefit to any but a tiny fraction of African people. Or is remembering the people working and dying in open pit mines too moralizing? Let's just focus on the Great Power War instead
Cobalt is still used, but the EV industry has shifted to LFP chemistries that don't rely on African-sourced metals. Still lots of the older chemistries being used for performance advantages. Not that no one buying Cobalt is good for workers, either, absent good alternatives. Being poor and desperate sucks.