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0 sats \ 5 replies \ @Solomonsatoshi 4h \ parent \ on: Econ October Recap econ
It is not the mining of rare earths that is the difficulty.
It is the refining of them.
China has invested heavily in the refining of rare earths for several decades and now controls the supply of rare earths globally.
It will take the US/West at least a decade to build refining capacity to even start to regain supply chains independent of China and even then only at a massive cost which no private refiner will fund- it will only happen with Massive US government SUBSIDIES.
Not everything needs a subsidy to exist.
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Absolutely true.
But some things do.
A major part of the Chinese success in beating the west in terms of manufacturing competitiveness has been its massive government led investment in electricity power generation- the low priced electricity supplied by the state triggers private sector investment and productivity and gives Chinese businesses a significant strategic advantage over western competitors.
With AI now becoming a huge consumer of electricity the failure of western economies to produce more cheaper electricity is a potentially fatal strategic weakness.
The Chinese use scale and government planning to build 12 new nuclear plants based on improved blueprints sourced from the west while the USA struggles to complete one new nuclear plant and that one plant will cost 4x more than the Chinese ones which are also built far quicker.
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The Chinese use scale and government planning to build 12 new nuclear plants based on improved blueprints sourced from the west while the USA struggles to complete one new nuclear plant and that one plant will cost 4x more than the Chinese ones which are also built far quicker.
So in the US case, the government interferes, and in China the government allows the market to build? Proving my point. The less government intervention the better.
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In China the government literally owns many of the power generators building them and supplying the electricity at the lowest possible cost knowing that the free market of manufacturers and processors will utilise the electricity and produce wealth and competitively priced exports.
It is a case of the government enabling its industry to be the most competitive in the world.
Chinese manufacturers enjoy electricity supply at less than half the cost western manufacturers pay.
All due to proactive Chinese economic management and understanding of the crucial enabling role government can play in the wealth of nations.
Due to this government led strategically scaled power generation construction the cost of Chinas new nuclear power plants massively lower than in the crony capitalist USA.
Chinas mercantile mixed economy strategy has won the trade war - you just have not understood it yet.
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No in China the government has deliberately created a whole industry including trained engineers and technicians and supply chains of raw materials capable of building projects like nuclear, solar, hydro, wind and thermal power generation at drastically lower cost than the US government which only regulates industry and provides almost zero strategic guidance.
In areas like this neoliberal libertarian ideology has crippled western manufacturing competitiveness.
Remember the Hoover dam?
The wests global dominance was built upon mixed economy government and private enterprise synergies.
The wests decline is upon neoliberal libertarian extremist idiocy.
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