The Fallacy of Vertical Integration (A Question of Rational Economics).

[horse]

But this thread is about vertical integration not about China access to US tech! Duh.

But dude ...

That is exactly what we are talking about.

If China is restricted from US tech, the only solution is to vertically integrate everything.

For example, Huawei - their primary business used to be network equipment. But they expanded into cell phones, and data center servers, along with maybe washing machines like Samsung?

The point is this, I guess there are various points, it is the 5G network that will allow the Internet of Things to make life more automated.

The cell phone is the remote control. It connects to the 5G network. They will track user data on a server. Then that connects to the IoT which could be your washing machine.

See the vertical integration there? Huawei builds it all. That is the vertical integration.

The US politicians want to stop this. This is like trying to stop the future. It will not work. Best they could hope for is to delay that, but does not seem that is possible either.

Huawei building out the 5G network in Shenzhen is proof. That is the world's first stand alone 5G network. I read America has it too with one of their telecom companies, but that sounds like a misleading ad, lol.

 

[Gatekeeper]

Which is why all the replies to the topic on hand were about trashing tidal's opinions on China's foreign policy? We are already off topic.

Are you saying gadget is tidal?
In anycase, he was still talking about vertical integration. And I think members here are thrashing that!

 

[Dante80]

Globalization is arguably one of the main reasons that China has reached this level of economic progress so far. Literally hundeds of millions of people have ascended from poverty due to the world - spearheaded by the US, yes - abandoning sterile protectionism.

Times do change though. I don't really see China loving the fact that it has to develop a lot of redundant technology and IP only because integration is closed for political reasons.

There is no other way though. Yes, it will be messy and expensive, but it will also be the only way to make sure you are truly independent in the end.

 

[Gatekeeper]

But dude ...

That is exactly what we are talking about.

If China is restricted from US tech, the only solution is to vertically integrate everything.

For example, Huawei - their primary business used to be network equipment. But they expanded into cell phones, and data center servers, along with maybe washing machines like Samsung?

The point is this, I guess there are various points, it is the 5G network that will allow the Internet of Things to make life more automated.

The cell phone is the remote control. It connects to the 5G network. They will track user data on a server. Then that connects to the IoT which could be your washing machine.

See the vertical integration there? Huawei builds it all. That is the vertical integration.

The US politicians want to stop this. This is like trying to stop the future. It will not work. Best they could hope for is to delay that, but does not seem that is possible either.

Huawei building out the 5G network in Shenzhen is proof. That is the world's first stand alone 5G network. I read America has it too with one of their telecom companies, but that sounds like a misleading ad, lol.

But you own reply a few pages back sums up very well the differences between verticle intergration and industrial/business structure.

You mentioned about oil industries being in from oil extractions right through refinery to retailing. That's verticle integration. But his verticle integration doesn't mean all your activities have to be conducted in one country, which gadgetool seem to suggest.

Vertical integration is a grey area and down to interpretation. So I didn't make much comment at all. I had more of an issue with his assertion that it was China's fault for the worsening Sino-US relationship.

 

[Gatekeeper]

Didn't know Harvard alums can be so ignorant to recent events? Globalization is dead.

I'm glad you said that and not me. Otherwise people might think it was just me having issues with his economic comprehension.

I was beginning to feel it was just me. Lol

 

[horse]

The counter attack.

There exist a semiconductor industry in China. Maybe a lot of it is old and behind. But it still exists.

I cannot and do not believe, that all those ICMB and the space program from the PLA would rely on chips purchased from aboard.

When the Chinese start manufacturing the low end chips, which are the majority of the chips used in factories across the world, like for everything, that will be the counter attack.

When the Chinese start manufacturing the low end chips, that will be from an America free supply line.

They will just take that business away for themselves. More profits for Chinese corporations, and wipe out others.

 

[FangYuan]

Vertical integration is a grey area and down to interpretation. So I didn't make much comment at all. I had more of an issue with his assertion that it was China's fault for the worsening Sino-US relationship.

That's what I think about when I read his post.

In my opinion, the relationship between China and the United States has deteriorated not because of the territorial dispute between China and its surrounding neighbors. The reason is that the United States never condemned it in the 1960s-70s and 1980s, and it all changed as China's economic and military might gradually caught up with the United States.

According to this logic, even if China sacrifices its territorial sovereignty over its neighbors and gives in to the United States, it does not help China and the United States become friends. The United States' hostile policy towards China never changes unless China becomes an American vassal or a 3rd world country (with no economic or military power).

 

[free_6ix9ine]

That's what I think about when I read his post.

In my opinion, the relationship between China and the United States has deteriorated not because of the territorial dispute between China and its surrounding neighbors. The reason is that the United States never condemned it in the 1960s-70s and 1980s, and it all changed as China's economic and military might gradually caught up with the United States.

According to this logic, even if China sacrifices its territorial sovereignty over its neighbors and gives in to the United States, it does not help China and the United States become friends. The United States' hostile policy towards China never changes unless China becomes an American vassal or a 3rd world country (with no economic or military power).

Pretty much it. Even Japan got the stick when it tried to overtake the US. Can't win the war if your too afraid to fight. Bring it onon I say.

 

[Intrepid]

Well organized, educated and hardworking wins over selfish, unequal and lazy. Who is surprised?

 

[free_6ix9ine]

Are you saying gadget is tidal?
In anycase, he was still talking about vertical integration. And I think members here are thrashing that!

No tidal is someone different. If it was tidal he would be ranting about Huawei being stupid or something.