> Arguably, China is subsidizing everything with a low currency
Not really. "Subsidizing everything" is an oxymoron, if you subsidize some production it must be at the expense of other production that is providing the subsidies.
> It may cancel out (or maybe more than cancel out) those tariffs.
The opposite is true, tariffs reduce demand for Chinese products and thus for Chinese currency, which leads to lower yuan.
They subsidize manufacturing of certain specific industries, EV cars being one, at the cost of domestic consumption. Basically they steal Chinese people's savings and use it to give the rest of the world cheap cars.
> Basically they steal Chinese people's savings and use it to give the rest of the world cheap cars.
One of the fundamental equations of macroeconomics: savings == investment
The high speed of Chinese industrialization is made possible by the high level of savings which are fueled into investments, and that doesn't leave much room for subsidies.
Moreover, even if subsidies do exist, they can be structured in a way that maximizes the bang for the buck of investments and in that light, they assure max productivity - that's not "stealing people's savings" - that's utilizing them in the best way possible for their real purpose: investment.
I don't know why so many people without basic understanding of economics imagine themselves to be experts in it. Yes, mainstream economics is a mess but thinking that you'd fix it with a few shortcuts is hubris.
> One of the fundamental equations of macroeconomics: savings == investment
That's not a "fundamental equation", that's merely the hope savers have. Sometimes the hope turns out to be futile and you get bank runs or financial crises.
Chinese investments aren't investments as would be understood in a free system. They have private investors, but when the government subsidizes industries they're force feeding money to things private investors passed up (or they rig the market so private investors pile in even though it doesn't make sense to do so absent the manipulations).
Think about it like this: imagine the government stole your savings and then gave it all to Sam Altman to spend on OpenAI. You might object on several grounds:
1. It's morally wrong to steal people's money.
2. OpenAI probably isn't a viable business.
3. OpenAI will use those savings to give random strangers free chats.
4. If OpenAI implodes or becomes a zombie firm that makes losses forever, the government won't hold itself accountable.
5. In the likely event of negative RoI you won't have any ability to retire anymore.
It's obvious why this scheme is bad and why people who actually do understand economics want governments to stay well away from "investments" of any kind.
