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EU to Impose Tariffs Up to 45% on Chinese Electric Vehicles (www.bloomberg.com)

submitted 2 months ago by [email protected] to c/[email protected]

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[–] [email protected] 2 points 2 months ago

Ramping up production didn’t reduce demand. Demand reduced due to a softening Chinese economy, mainly due to debt and housing.

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.

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.

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 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).

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.

The problem is central planning is less efficient at deciding how much is needed. It will often over or undershoot. Thats what happened here.

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.

Central planning didn’t work to produce the needed amount so trade through capitalism is being used to improve efficiency of the capital used.

It's just regular trade between countries, it has nothing to do with capitalism and predates it by a wide margin.