Technology
This is the official technology community of Lemmy.ml for all news related to creation and use of technology, and to facilitate civil, meaningful discussion around it.
Ask in DM before posting product reviews or ads. All such posts otherwise are subject to removal.
Rules:
1: All Lemmy rules apply
2: Do not post low effort posts
3: NEVER post naziped*gore stuff
4: Always post article URLs or their archived version URLs as sources, NOT screenshots. Help the blind users.
5: personal rants of Big Tech CEOs like Elon Musk are unwelcome (does not include posts about their companies affecting wide range of people)
6: no advertisement posts unless verified as legitimate and non-exploitative/non-consumerist
7: crypto related posts, unless essential, are disallowed
view the rest of the comments
Ramping up production didn't reduce demand. Demand reduced due to a softening Chinese economy, mainly due to debt and housing.
I agree, it's not excess supply when you can sell it overseas. However, its also not central planning when you wanted to Ramp up supply for domestic consumption but end up using capitalism to keep efficiencies.
Companies ramp down production all the time. What do you think redundancies and factory closures are for? They react to market conditions or seek new markets (as happened in this case).
I thinknyouve got it backwards. Central planning can efficiently produce anything. As in, it can make as much of a product at the cheapest price as possible. The problem is central planning is less efficient at deciding how much is needed. It will often over or undershoot. Thats what happened here. Tonsaybthey can still sell overseas, so its still central planning being efficient is incorrect. Central planning didn't work to produce the needed amount so trade through capitalism is being used to improve efficiency of the capital used.
There's not much indication that the Chinese economy is actually softening. Also, not sure what debt from housing you're talking about. 90% of families in China own their home. What’s more is that 80% of these homes are owned outright, without mortgages or any other leans. https://www.forbes.com/sites/wadeshepard/2016/03/30/how-people-in-china-afford-their-outrageously-expensive-homes
Pretty much the only people losing money on housing are investors, many of whom are foreign.
It absolutely is central planning when the state decides on the overall direction of the economy. The state doesn't need to micromanage the details of the economy any more than your brain needs to consciously micromanage every muscle movement when you try to walk. The state wanted to create a lot of housing for people to live in, and that was accomplished. Now, the state is directing the economy to wind down real estate and transition to high tech which is happening.
Companies don't do that voluntarily, they do it when they're in a financial trouble. Meanwhile, thanks to brilliance of capitalism there are very few redundancies left. Everything is just in time economy, that's why a single ship getting stuck in Suez Canal can bring the world economy down.
Except it's not what happened here because as you yourself admit there is global demand for the goods that China produces. Overshooting would be producing goods that nobody wants.
It's just regular trade between countries, it has nothing to do with capitalism and predates it by a wide margin.