U.S. has a functioning market economy where the U.S. can incentivize things by paying for them, in a way that China cannot reliably.
I think your model of the world is just flat wrong if you think this. Like—China interferes in China’s economy a lot. The US interferes in the US’ economy a lot. But—surely—China has a functioning market economy, where you can incentivize things by paying for them? Sure it’s “Communist” but it’s not communist like that.
Like Russia didn’t have a functioning market economy. A sign of this was that the Russian cars sucked and found little traction as exports. That’s because non-market economies produce bad products at high prices.
On the other hand, BYD sells more cars than Tesla (but competes against many other EV makers inside china). DJI sells more drones than the rest of the world combined (but also competes against other Chinese companies like Autel, etc). Huawei is the world’s largest smartphone manufacturer since ~2020 or so, I think (and competes against other Chinese companies, and Apple, and Samsung). In general, many Chinese products are of high quality, to the degree that people in countries like Germany want to ban them from their markets because they are taking too much market share. And that’s because—unlike Russian cars—they come from something that’s at least a reasonably functioning market economy.
The Chinese government has surely subsidized this for various reasons, just like the US has subsidized the soybean farmers. They’ve surely made it less efficient in many ways. But these companies nevertheless compete on an marketplace internal to China, compete on marketplaces external to China, and have their success largely because they make products that are excellent while doing so efficiently.
And so it appears to me it would be much easier for China to scale drone production from a base that is ~20x higher than the US’ production to continue to maintain absolute and overwhelming numerical superiority.
But—surely—China has a functioning market economy, where you can incentivize things by paying for them? Sure it’s “Communist” but it’s not communist like that.
I have lots of uncertainty about this! For example, it does appear that China basically gutted its software startup industry a few months ago, and this is really costly, and it wouldn’t surprise me if this will have large negative effects on Chinese drone effectiveness, since software seems like a non-trivial fraction of the difficulty, especially for coordinating drone swarms.
My current model is that overall, all things considered, the Chinese market economy is a lot weaker. This doesn’t mean there are no domains where China excells at building great products in their market economy, but I have a much higher likelihood that something will mess up their efforts to do something in the market than I have for the U.S.. IDK, I am at like 65% that the US market economy is sufficiently stronger here to produce a long-run advantage in drone manufacturing if the US government decides to spend heavily on it, which really isn’t that confident.
Since I feel like these kinds of discussions can often feel thankless, I felt like I wanted to write an explicit comment saying I am grateful for @1a3orn’s, @JohnofCharleston’s, @Thomas Kwa’s and @Alexander Gietelink Oldenziel’s comments on this thread. I disagree with many of you, but you presented a bunch of good arguments evidence on a thing that does actually seem quite important for the future of the world.
You might be interested in my old shortform on the military balance of power between US and China too. It’s a bit dated by now—the importance of drones has become much more clear by now [I think the evidence that we are in a military technological revolution on par with the introduction of guns] but you may find it of interest regardless.
I think your model of the world is just flat wrong if you think this. Like—China interferes in China’s economy a lot. The US interferes in the US’ economy a lot. But—surely—China has a functioning market economy, where you can incentivize things by paying for them? Sure it’s “Communist” but it’s not communist like that.
Like Russia didn’t have a functioning market economy. A sign of this was that the Russian cars sucked and found little traction as exports. That’s because non-market economies produce bad products at high prices.
On the other hand, BYD sells more cars than Tesla (but competes against many other EV makers inside china). DJI sells more drones than the rest of the world combined (but also competes against other Chinese companies like Autel, etc). Huawei is the world’s largest smartphone manufacturer since ~2020 or so, I think (and competes against other Chinese companies, and Apple, and Samsung). In general, many Chinese products are of high quality, to the degree that people in countries like Germany want to ban them from their markets because they are taking too much market share. And that’s because—unlike Russian cars—they come from something that’s at least a reasonably functioning market economy.
The Chinese government has surely subsidized this for various reasons, just like the US has subsidized the soybean farmers. They’ve surely made it less efficient in many ways. But these companies nevertheless compete on an marketplace internal to China, compete on marketplaces external to China, and have their success largely because they make products that are excellent while doing so efficiently.
And so it appears to me it would be much easier for China to scale drone production from a base that is ~20x higher than the US’ production to continue to maintain absolute and overwhelming numerical superiority.
I have lots of uncertainty about this! For example, it does appear that China basically gutted its software startup industry a few months ago, and this is really costly, and it wouldn’t surprise me if this will have large negative effects on Chinese drone effectiveness, since software seems like a non-trivial fraction of the difficulty, especially for coordinating drone swarms.
My current model is that overall, all things considered, the Chinese market economy is a lot weaker. This doesn’t mean there are no domains where China excells at building great products in their market economy, but I have a much higher likelihood that something will mess up their efforts to do something in the market than I have for the U.S.. IDK, I am at like 65% that the US market economy is sufficiently stronger here to produce a long-run advantage in drone manufacturing if the US government decides to spend heavily on it, which really isn’t that confident.
Since I feel like these kinds of discussions can often feel thankless, I felt like I wanted to write an explicit comment saying I am grateful for @1a3orn’s, @JohnofCharleston’s, @Thomas Kwa’s and @Alexander Gietelink Oldenziel’s comments on this thread. I disagree with many of you, but you presented a bunch of good arguments evidence on a thing that does actually seem quite important for the future of the world.
Much appreciated Habryka-san!
You might be interested in my old shortform on the military balance of power between US and China too. It’s a bit dated by now—the importance of drones has become much more clear by now [I think the evidence that we are in a military technological revolution on par with the introduction of guns] but you may find it of interest regardless.