China To Subsidize Smartphone Purchases in Bid To Lift Spending (yahoo.com)
- Reference: 0175822403
- News link: https://slashdot.org/story/25/01/03/1255214/china-to-subsidize-smartphone-purchases-in-bid-to-lift-spending
- Source link: https://finance.yahoo.com/news/china-subsidize-smartphone-purchases-bid-044521695.html
> A national trade-in program that currently applies to home appliances and cars will broaden this year to include personal devices like phones, tablets and smartwatches, officials from the nation's top economic planning agency said in a briefing Friday.
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> Chinese consumers in the post-Covid era have begun holding onto their smartphones longer, given a lack of exciting new features and general belt-tightening. As with cars and washing machines, investors hope incentives will revive the world's largest smartphone market and drive sales for not just brands such as Huawei and Xiaomi, but also galvanize business on platforms popular with device fans like Alibaba Group and JD.com.
[1] https://finance.yahoo.com/news/china-subsidize-smartphone-purchases-bid-044521695.html
Great news, eh? (Score:1)
An often-repeated piece of Soviet/russian propaganda is how yuge the US debt is vs the GDP, and how it will kill the dollar and the US economy anytime now. It's been continuously running since at least the 1970s.
Guess what, the debt as % of GDP of China, the russian master, overtook that of US three or four years ago and now stands at 292% and is increasing.
This comes without the fat and soft pillow of the US assets, which are double in absolute terms and an order of magnitude higher per capita than those o
Re: (Score:2)
US debt is denominated in USD. That US can print.
If it was really "oh noes, they're coming to collect and they'll fuck us", US can simply print the dollars needed to pay off all the debt. Yes it will be hugely inflationary, but if you're talking about "getting fucked" vs "inflation", choice is obvious.
And that means "getting fucked" isn't even on the table even if PRC held 100% of US debt. And it holds but a small fraction.
Not just in China (Score:2)
Google Pixel had 8GB of RAM from gen 5 to gen 8. Why would you update if you are still struggling for RAM with a new phone? Only the 9 has finally increased the amount of RAM, and it is still not great.
Of course the next question is whether phones will actually need neural processing units. That could be a game changer.
Phones have reached their optimal design (Score:2)
Most phones have converged on a six inch rectangle and only have differences in the notch/hole implementation. It's been 5 years since 5G, the last big network upgrade, and most phones aren't going to need anymore bandwidth. It's only the hostility to repairs that are keeping new phones being purchased.
Short term gains (Score:2)
The challenge is this may encourage people to turn in older phones, but once that happens you now have a bunch of people with new phones who won't trade them in soon, so you get bump but no sustainable growth. in addition, people will get accustomed to the subsidy and thus you'll need to keep paying it or risk sales slowing again as people decide to wait and see if it comes back.
Too dependent in foreign markets (Score:2)
There isn't enough domestic growth to carry China's industry. Subsidies won't work in the long term, and maybe even won't work in the short term.
Re: (Score:2)
Subsidies have worked in long term. The problem is that this made industry dependent on them. Everything from wage suppression to industrial loan policies to forced labor. But these are essentially transfers from populace to the industry. And that means populace is not wealthy enough to consume what overfinanced industry produces. Hence the need for foreign markets to keep the system running.
Re: Too dependent in foreign markets (Score:2)
Yes that what we called âoeglobalizationâ. China didnâ(TM)t figure out what that meant.
external headwinds (Score:2)
Which direction does the wind have to blow to be a headwind for China?
Re: (Score:2)
>> Which direction does the wind have to blow to be a headwind for China?
> Whichever direction Trump is.
With his tariffs Trump promises to be an even bigger headwind for the US economy than the Chinese one so I suppose it boils down to which end of him expels the most air.
Re: (Score:3)
This submission would seem to indicate otherwise. Chinese industry needs foreign markets more than foreign markets need Chinese industry.
Re: (Score:1)
You are forgetting one simple thing though: it takes seconds to enact a tariff with the stroke of a pen, and years to build and staff factories to produce goods domestically.
What happens in the time between those two events? You, me, and everyone else gets fucked by massive inflation. But hey, at least you're sticking it to China while not able to make the budget pencil out, right?
Re: (Score:3)
It's even worse than that. A lot of chinese manufacturers openly talk about post-covid sales in China being unprofitable or break even at best, and foreign market profits keeping them alive.
Fundamental problem is Chinese industrial policy, which effectively functions to move money from citizenry to manufacturing via things like wage suppression and loan regimes. But that means that domestic consumption is severely stunted and cannot consume what is being overproduced. Hence the need for foreign markets to a