China Making Aggressive Moves to Dominate Commercial Space Sector
Continuing our look at the U.S.-China Economic and Security Review Commission’s 2019 Report to Congress, we examine China’s growing commercial space industry. [Full Report]
by Douglas Messier
Managing Editor
China is using aggressive state-backed financing to capture increasing shares of the commercial launch and satellite markets, making it more difficult for American companies to compete and threatening to hollow out the U.S. industrial base.
China is also leverage “military-civil” fusion to create a burgeoning commercial space sector by providing substantial state support. Nearly 90 new space companies have been created since 2014, most of which enjoy the support of the Chinese military, defense industrial base, or state-owned research and development institutions.
Those are the conclusions of the U.S.-China Economic and Security Review Commission’s 2019 Report to Congress. The document’s section about China’s military-run space program paints the picture of a nation determined to seize a commanding position in all aspects of space exploration and exploitation.
“Beijing aims to establish a leading position in the future space-based economy and capture important sectors of the global commercial space industry through the use of subsidies to undercut foreign competitors, including promoting its space industry through partnerships under what it has termed the ‘Space Silk Road,'” the report said. “Some of these initiatives are already challenging the U.S. space industry and U.S. leadership on international space cooperation. “
The state-owned China Great Wall Industry Corporation (CGWIC) is leading the nation’s effort to dominate the international launch and satellite markets.
“CGWIC offers as much as 70 percent financing for satellite construction to international clients, with funds available immediately upon signing instead of the usual delay of six months to a year. In some cases it has also provided ground control systems, training, and insurance,” the report stated.
“CGWIC has branched out from launching mainly Chinese-made satellites for foreign customers to more recently contracting with foreign entities to provide launch services for their own products,” the document added. “In most cases, China Export-Import (EXIM) Bank has provided funding.”
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China’s export financing system provided $39 billion in official export credits in 2018, making it larger than the next three nations’ official export credit agencies combined, the report said.
The effort, which has been focused on developing nations, has allowed China to make inroads in the satellite market. Maxar Technologies Vice President Mike Gold said his company didn’t even bid on an Indonesian government contract for a high-throughput satellite because it couldn’t compete with CGWIC’s attractive financing.
“This tactic is indicative of what Mr. Gold called China’s broader strategy ‘to capture a majority share of the global communications satellite and launch market,'” the report said.
The document questions whether China is making a profit with such generous terms. However, profits might be less important than gaining market share, driving out foreign competition, and forging links with other countries.
China also seeks to control the supply chain. It already dominates germanium mining, which forms the basis of specialized solar panels used in satellites.
“China now accounts for over 70 percent of global germanium mining, refining, and production, meaning that production of these critical panels is effectively impossible without China’s raw materials,” the document said.
A Growing Commercial Sector
China’s quasi-private space sector has taken off during the past five years since restrictions on private companies were lifted in 2014.
“As of June 2019, according to analyst Jean Deville, the burgeoning Chinese space sector (not counting large state-owned space industry contractors) comprised 87 private space startups, state-sponsored space startups, and large private corporations that had diversified into space in some way, with two thirds founded since 2015,” the report stated.
“Of these companies, roughly one third appear to have private investors, another third are identifiable as having received state funding, and the ownership and financing of the remaining companies is unclear and requires further investigation,” the document added.
A 2019 joint report by the Air Force Research Laboratory and Defense Innovation Unit said China has built up its domestic space industry using “intellectual property theft, direct integration of state-owned entities and their technology with commercial startups, using front companies to invest in U.S. space companies, gaining vertical control of supply chains, and predatory pricing.”
The State Administration for Science, Technology and Industry for National Defense (SASTIND) has played a crucial role in fostering the military-civil fusion by funding new companies and establishing regulations for the commercial industry.
“Under military-civil fusion, so-called ‘guidance funds’ pool state-owned and private capital together for investments, allowing the state to steer ostensibly private capital toward investments in nascent dual-use sectors it deems strategically important—a tool China has consistently applied to the development of its space sector,” the report said.
“In July 2019, Beijing- based iSpace, a new firm that received early-stage funding from SASTIND, achieved the first orbital satellite launch by a Chinese startup, marking a major success of China’s military-civil fusion space drive,” the document added.
Large state-owned contractors have commercialized their operations. The China Aerospace Science and Industry Corporation (CASIC) has created an subsidiary, ExPace, to market and launch the company’s Kuaizhou small satellite boosters.
ExPace “plans to price satellite payloads at less than half market rates, and some Chinese companies have offered free launches, providing these companies a significant advantage over foreign competitors,” the report said.
An excerpt from the report follows.
China Making Inroads to Command
the Global Commercial Space Sector
China is determined to grow its market share in commercial launch and satellite sectors relying in part on aggressive state-backed financing that foreign firms cannot match, seeking in some cases to displace U.S. and other foreign launch and satellite providers.
China seeks to expand its market share in part by catering to developing countries and by building strong relationships both with its traditional partners and with established satellite operators such as U.S.-based Global Eagle or France-based Eutelsat.
At the heart of this program is the PLA contractor China Great Wall Industry Corporation (CGWIC), China’s sole provider of commercial satellite and launch services for international clients. CGWIC offers as much as 70 percent financing for satellite construction to international clients, with funds available immediately upon signing instead of the usual delay of six months to a year. In some cases it has also provided ground control systems, training, and insurance.
CGWIC provided China’s first full in-orbit satellite delivery for a foreign client—comprising financing, construction, launch, testing, ground stations, and personnel training—in its NigComSat-1 deal with Nigeria in 2007.
Due to the generous financing terms China provides, it is unclear whether China can generate a profit at all from these arrangements, indicating profit may not be a driver in these deals.
Mike Gold, a senior U.S. commercial space industry executive, testified to the Commission that due to the aggressive financing offered by CGWIC, the company he represents did not even bother to bid in 2016 for an Indonesian government contract for a high-throughput satellite because it simply could not compete. This tactic is indicative of what Mr. Gold called China’s broader strategy “to capture a majority share of the global communications satellite and launch market.”
Even if Chinese satellites are not as high-quality as those made by the United States, they are in some cases more readily available and their quality is adequate, making them more attractive options, especially at a time when the telecommunications satellite industry is moving to smaller, less expensive constellations in LEO.* Beijing is capitalizing on current market conditions to grow its market share, according to Mr. Gold, threatening to hollow out the U.S. space industrial base.
China’s aggressive and well-coordinated export finance practices are forcing other countries’ export credit agencies to defensively change their policies and practices simply to maintain their access to large global markets, let alone expand their share.
According to a June 2019 report from the U.S. Export-Import Bank, China’s export financing system, which comprised $39 billion in total official export credits in 2018, was larger than the next three countries’ official export credit agencies combined. It has led foreign buyers for large projects to view the availability of government-backed financing as a “core component” of their evaluation of bids.
For example, ExPace, a subsidiary of one of China’s main space contractors, plans to price satellite payloads at less than half market rates, and some Chinese companies have offered free launches, providing these companies a significant advantage over foreign competitors (see table below for a list of recent Chinese satellite launches for foreign customers and the financing source for these deals).
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According to Mr. Gold, this change in market share, and the resulting decreases in orders for U.S.-made satellites, risks causing the long-term loss of U.S. secondary and tertiary space component suppliers and associated critical workforce skills.
CGWIC has branched out from launching mainly Chinese-made satellites for foreign customers to more recently contracting with foreign entities to provide launch services for their own products. In most cases, China Export-Import (EXIM) Bank has provided funding.
Jumpstarting the Space Industry with Military-Civil Fusion
As China seeks to increase its share in the international commercial space market, it has aggressively sought to leverage military-civil fusion to commercialize its existing space technology in part by granting new space companies access to some formerly restricted intellectual property.
Lorand Laskai, visiting researcher at the Georgetown Center for Security and Emerging Technology, testified to the Commission that China’s emerging private space sector has been “a notable priority and early success” in General Secretary Xi’s military-civil fusion campaign (for more on military-civil fusion, see Chapter 3, Section 2, “Emerging Technologies and Military-Civil Fusion: Artificial Intelligence, New Materials, and New Energy”).
China’s strategy to build up its domestic space industry, according to the May 2019 joint report by the Air Force Research Laboratory and Defense Innovation Unit, includes intellectual property theft, direct integration of state-owned entities and their technology with commercial startups, using front companies to invest in U.S. space companies, gaining vertical control of supply chains, and predatory pricing.
For example, according to the report, germanium wafer production, solar cell production, and commercial launch services are especially sensitive markets China seeks to dominate. Refined germanium wafers are the basis for nearly all specialized satellite solar panels, and as a result of aggressive stockpiling of and export taxes on germanium, China now accounts for over 70 percent of global germanium mining, refining, and production, meaning that production of these critical panels is effectively impossible without China’s raw materials.
Unlike rare earth elements, germanium is produced primarily by refining zinc nitrates, but since only three zinc mines and one zinc smelter are in operation in the United States, U.S. capacity to produce germanium domestically is currently limited.**
The goal of military-civil fusion in China’s space sector is not primarily to develop cutting-edge technology but to produce existing technology that meets most customers’ needs at lower cost and at greater commercial scale and efficiency.
In 2014, Beijing opened the space industry to the non-state-owned sector, allowing these companies to build and launch satellites for the first time, although the PLA still retains a monopoly on approving launches.
Most of these new companies are in fact connected in some way to the Chinese military, defense industrial base, or state-owned research and development institutions. As of June 2019, according to analyst Jean Deville, the burgeoning Chinese space sector (not counting large state-owned space industry contractors) comprised 87 private space startups, state-sponsored space startups, and large private corporations that had diversified into space in some way, with two thirds founded since 2015.†
The Chinese government has also begun subsidizing launches by these companies at its Jiuquan launch facility in the Gobi desert. In June 2019, SASTIND [State Administration for Science, Technology and Industry for National Defense] released new regulations outlining guidelines for commercial launch vehicle development under military- civil fusion, mandating among other things that companies obtain official governmental permission before engaging in research and development or testing of launch vehicles.
In July 2019, Beijing- based iSpace, a new firm that received early-stage funding from SASTIND, achieved the first orbital satellite launch by a Chinese startup, marking a major success of China’s military-civil fusion space drive.
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* Cutting-edge satellites designed by CAST currently have a throughput capacity of 20 gigabits per second, compared to those made by U.S. companies Boeing, SSL, and Orbital ATK, which are capable of throughput speeds of 260, 220, and 100 gigabits per second, respectively. Brian Spegele and Kate O’Keeffe, “China Exploits Fleet of U.S. Satellites to Strengthen Police and Military Power,” Wall Street Journal, April 23, 2019.
** A Canadian company, Teck Resources, owns two of the mines, and a Belgian company, Nyrstar, owns the third mine and the smelter. From 2014 to 2017, 58 percent of U.S. germanium stockpiles were imported from China and 26 percent from Belgium. Amy Tolcin, Assistant Chief, Mineral Commodities Section, National Minerals Information Section, U.S. Geological Survey, interview with Commission staff, July 26, 2019; U.S. Geological Survey, “Germanium,” February 2019, 1; U.S. Geological Survey, “Mineral Commodities Survey 2019,” February 2019, 68–69; Nyrstar, “Clarksville Smelter.”
† Of these companies, roughly one third appear to have private investors, another third are identifiable as having received state funding, and the ownership and financing of the remaining companies is unclear and requires further investigation.
65 responses to “China Making Aggressive Moves to Dominate Commercial Space Sector”
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One reason China is so dominate in the production of Germanium is because it has so many coal plants contributing to global warming. They produce the Germanium from processing the fly ash left behind. The U.S. has large deposits of Germanium in the Mississippi Valley, but there is little incentive to develop them or recover it from fly ash.
Obviously what’s needed is a government program to do this. It’s an obvious hole in the free enterprise system that the Chinese have filled. Likely the way the US will do this have a US company contract out to a Chinese firm to come in, set up shop, own and operate the infrastructure, while the US company manages the profits.
As Chinese style industrial policy continues to outstrip the US investor based model of industry, the pressure to adopt the government controlled model will mount here as well. Look at how the Republican and fossil fuel power establishment attempted to kill wind and solar here in the US. Thus ceding the fastest growing portion of the global energy sector to China, Denmark, and Germany. Wind and solar with storage are poised to become even more profitable than fossil fueled systems and the US will be a bit player when it comes to production. We’ll mainly be consumers because all the attempts to kick start those industries that we pioneered were shut down by short sighted right wingers and so called free marketeers.
Why a Chinese firm? The U.S. has the technology to mine and process the Germanium. A government run consortium under the Dept. of Energy could do the job as well without the security risk.
I am in favor of solar photovoltaic but wind power is far too damaging to bird/bat populations and should be phased out on environmental grounds.
Because Chinese firms are predicated on ownership of the tools required to do industrial operations. They also invest in training their people. And keep them. American businessmen are trained to establish the revenue stream and when done, liquidate any assets and let the skilled workers go.
Yea, sure. That is why China firms use prison labor, to invest in building a quality workforce. But you are right, being prisoners they do have job security…
BTW did you know independent labor unions in China are illegal? There is only one single government run “union”. That is why Chinese labor laws in China are routinely ignored while union activists (Traitors…) are arrested by the government and sent to prison.
But then that is why you see so many Chinese entering the U.S. illegally to work, and so few Americans sneaking into China to work…
“That is why China firms use prison labor,”
A very large percentage of American companies use prison labour too.
Here are a few examples from a very long list:
IBM, Boeing, Motorola, Microsoft, AT&T, Wireless, Texas Instrument, Dell, Compaq, Honeywell, Hewlett-Packard, Nortel, Lucent Technologies,3Com, Intel, Northern Telecom, TWA, Nordstrom’s, Revlon, Macy’s, Pierre Cardin, Target Stores, American Express, Bank of America, J.P. Morgan, ExxonMobil, BP America, Johnson & Johnson, Sara Lee Corporation, Procter & Gamble, Sprint, AT&T, Verizon, United Airlines, Wendy’s, McDonalds, Fruit of the Loom, Mary Kay Cosmetics, Wal-Mart, Quaker Oats.
TWA?
LOL. Must be AA on that.
🙂
Shows how long it’s been going on.
If you doubt how much of corporate America uses prison labour try doing a bit of research.
Oh I have no doubts what so ever. The American business sector has been obsessed with free labor since day one. It’s a plague running amok in our executive structure for a very long time. Bonded labor had many expressions in colonial days. No doubt, if a way can be arranged for the public to accept it for colonizing space, it will be done. I assure you, it will be attempted.
Yep, better to let the enlighten and kind Chinese settle space rather than the evil corporations from America…
You don’t get it. They’re going to try. And with hollow economy Libertarian economic policy they’ll likely be ahead of us. Look at how their crude throw away boosters are being put to work as compared to Space X’s masterpiece boosters. You as a Libertarian have to ponder why and how they can do what they’re doing now, and what that’s going to mean for the future.
I guess when you worship a communist country anyone who believes in freedom and free enterprise seems to be a Libertarian.
Man at your old age you don’t understand the difference between emotions and analysis? We’re getting our asses kicked, and frankly it’s the Libertarians who are acting as the agents of a Communist country and transferring American gains from the 20th Cen to China. Then you have a nerve to blame people like me who call your side out on the subject? I’m sorry, but your system of love and beliefs can’t fix the damage of your own system’s running amok.
In a previous thread I mentioned that we strongly disagree on a few subjects and that I will wait to see how they play out. This is one of them where I disagree with both you and Thomas. In my opinion, the most likely result is that China will have a roughly similar trajectory as Japan of several decades earlier in the cycle. Sell cheap knock offs to build revenue and get some market entry. Then increase quality with more profitable products until similar wages and efficiency put them on a rough par with the rest of the world. Then slow and sometimes negative growth in the world economy.
I don’t see the Chinese taking over as was predicted for Japan of decades back, nor do I see China imploding as the USSR did. I see a new equilibrium shaping up over the next few decades with a bit of saber rattling that doesn’t go hot. The US will swing back and forth on economic and other issues as it always has.
The graying of the work force is almost world wide as is the lessor work ethic of youth. The countries that find the best solutions are the ones to move forward relative to the rest of the world. Domination will be more Tiger Woods in golf than Nimitz in the Pacific.
The ones who encouraged the transfer of American manufacturing overseas, and not just to China, were the Democrats and their dysfunctional high corporate tax policy, not “Libertarians.”
And we’re not getting our asses kicked. You would like that to be true because you admire authoritarianism and distrust freedom.
China is going to implode but not like the Soviet Union – the Chinese implosion will be a great deal bloodier.
When? I want a time frame from you on this subject.
Predicting economic implosions is much like predicting volcano eruptions. Depending on external factors in the world economy and internal ones in China it could happen tomorrow or in a decade. But just as you see an eruption coming from the building pressures you see the trends pointing in that direction.
The demographic trends, slowing economy, years of false economic data, the inequity between the coast and interior, the suppression of minorities, the increasing unemployment among the youth and increasing layoffs of workers in China are all signs an eruption is coming. And because China is a more diverse nation and culture than Japan, and has more enemies, it won’t be pretty to watch.
I agree with all that. I’m not the one saying China is going to implode real soon now. I’m the one saying the Libertarians have been saying it’s going to happen as a salve against the little voice inside their head telling them they’re selling rope to the Chinese that can be used to hang them in the future.
Actually it was Vladimir Ilich Lenin so said that. ‘The Capitalists will sell us the rope with which we will hang them.” Last I looked it was the Soviet Union that ended up getting hung.
If you ever visit Las Vegas you might swing by the Mandalay Bay Casino. The statue of Lenin that they used to march in front of in Red Square, minus his head that was destroyed when communist fell, is in the lower level in front of a really great Russian restaurant… Pieces of the Berlin Wall were use in decorating the bath rooms in it. So much for the last evil empire to challenge the U.S. economy.
Sorry bud the cycle was started by the Nixon admin, the gates were opened by Regan, opened further by Bush I, THEN Clinton the the Democrats had their voice on the matter. Then Bush II used the Chinese to pay for Iraq. By the time Trump is done, no Republican will admit they voted for him, so his policy will either be embraced and extended by whoever comes next or thrown out the door.
You forget the partnerships with U.S. firms with Japan and Taiwan in the 1940’s and1950’s. China was just an extension of that policy once diplomatic relations were established.
Those were a preview of coming attractions for sure. And the effect on the Great Lakes was evident. You’re right on that of course.
Yes, but high state taxes and regulation was starting to drive industry from there to the south even before WWIi, helped by cheap energy from the TVA, a government venture.
There’s going to be an ebb and flow to any economy. I’m not even an isolationist, I think there needs to be international trade. It’s just that the way American internationalists mix with nationalists overseas and Chinese communism at that is toxic to us. Some serious government regulation needs to take place, and a serious whipping of American finance and corporate boards to change their culture. I think the Europeans have a much saner approach to the problem.
You are the one that is basing your opinions on emotion rather than analysis, and calling anyone who disagrees a Libertarian as if the only two choices are Libertarian and Your opinion. The fact that you only believe there are two economic systems seems to part of your problem. Economic systems aren’t rigid but have always existed in a matrix based on the amount of government ownership of property, extent of regulation, culture values and social benefits provided, making each nation’s unique. They are also constantly change over time. I guess the problem is that you try to make economics as simple as physics is.
Since the 1600’s the U.S. has shown the most flexibility in adapting its economy over time as needed. There was just proof of that yesterday when it was announced that for the first time since records started in 1949 the U.S. has become energy independent, exporting more oil than it imports. Meanwhile the EU and Chinese economies you love are still heavily dependent on oil imports and being on good terms with the Mideast for their energy.
Indeed, the Chinese are currently importing around 70% of their petroleum needs which explains why they were still building coal powered steam locomotives as late as the 1980’s for freight use and are so aggressive about taking over the South China Sea and its oil reserves. It also explains why they release twice as much CO2 as the United States, an amount which they are expected to double under the poorly written Paris Accords.
You did not read the full article. That was for a short period of time. Yes fracking is doing very well at closing the gap, and it now looks like we might re-reach break even. However from a year to year basis we are still a net importer. We have periods of net export.
I’m invoking Libertarians because they are the champions of the idea of borderless trade. They’re the internationalists who make deals with nationalists. They have no resistance to giving up ownership of the enterprise in exchange for a fast bit of paper money now. The US economic model worked great as long as it’s business sector is constrained to the US and invests in Americans. The European empires, and then the Cold War maintained American business interests were focused on Americans. US corporate interest is now directed by access to the coffers of foreign governments as a source for capital and captive un-unionizable labor. The old system you invoke has been breaking since the 80’s.
Than since I am a nationalist in favor of high tariffs and against open borders I am not, by your definition, a Libertarian. The U.S. model as you call it broke down when the U.S. started lowering those tariff barriers in the 1940’s. Restoring them is the first step to fixing it. But it will take a while to reverse a trend that has been going on for decades of bad economic policy based on a bad economic philosophy.
As for the oil, you don’t travel the oil patch regularly, nor I suspect does that reporter, so you don’t see all the drilling going on, nor the huge pipelines being built from West Texas to the ports on the Gulf of Mexico. Now it fluctuates as it crosses the border of independence, such is the nature of economics, but the trend will move it into a permanent state shortly once those pipelines are finished.
No Libertarian would be a nationalist. You’re right, your not a Libertarian.
Actually I have family in Oklahoma, and I fly over the Eagle Ford regularly. Have been for about 20 years. I’ve noted the growth of the patchwork of well sites. Despite all that growth, we’re still net oil importers and are scheduled to be so for some time. Fracking finally paid off. It will probably make us independent again, for a while. It’s the perfect lead into EV trucks and cars, leaving our oil for trains, ships and aircraft.
More than a few years. FYI
https://www.aei.org/carpe-d…
From peak oil to energy abundance. Energy expert now says the Permian Basin is a permanent, near-infinite resource
August 21, 2017
“The research we’ve done indicates that we have at least half a trillion barrels in the Permian at reasonable economics, and it could be as high as 2 trillion barrels.
“If Gilmer’s estimate is correct that the Permian Basin holds an additional half a trillion barrels of recoverable oil, that would be a 500-year supply of oil at the current production level, and at 2 trillion barrels, a 2,000 year supply! And if that’s an accurate forecast of Permian Basin reserves, Gilmer’s description of the Permian Basin as a “permanent, near infinite resource” makes perfect sense because the probability is pretty close to zero that we’ll be using fossil fuels even 100 years from now, much less 500 years or 2,000 years in the future.”
Just as with other resource problems Free Enterprise made short work of the crisis of “peak oil” ….
Meanwhile, China who imports 70% of its oil is risking a war to get the oil it needs from the South China Sea. So much for their superior “industrial policy”.
Their industrial policy has nothing to do with their need for access to middle east oil. Industrial capability is industrial capability and gives you nothing but options. Likely if Fracking is as much of a solution as that article states, then the Chinese will have even easier access to Middle East oil. As oil becomes less important on the world stage, it will become cheaper, and thus the Middle East will become poorer. As it becomes poorer the social malfunctions in the region will amplify, just as we don’t care anymore. Which will simply set the stage for China to march in and colonize to secure the flow of American free oil.
Yes you’re right, fracking has paid off handsomely. But don’t forget it took 30 years to make it work, with a lot of government money, and came in not quite fast enough to turn off the Hubbert cycle. We were past peak there for a few years. And should this not be a ‘infinite’ resource, we’ll be right back in that mire again. The other big difference between now and then, we finally have a real demonstrated, and viable alternative to petrochemicals for ground transport.
Yes, and that is how free enterprise has always worked in America, with the government doing basic research and industry applying it. That was the model for NACA, AEC, Dept. Agriculture, etc. Similarly the government creating incentives and industry responding to them. Again, its not Libertarian, but the simple solution focused pragmatism that has always driven the American economy.
BTW I am sure you don’t keep up with industries like railroads. But again American Free Enterprise is at work to address the problems of climate change and transportation needs driven by economics, as always. But of course the media doesn’t report on this…
https://www.ge.com/reports/…
Leading The Charge: Battery-Electric Locomotives Will Be Pushing US Freight Trains Further
Oct 24, 2018 by Chris Noon
“Adding even one battery-powered locomotive to the train could reduce the consist’s total fuel consumption by up to 15 percent, according to Alan
Hamilton, general manager of systems engineering at GE Transportation. Given that diesel prices globally have hovered between $2 to $4 per gallon for most of the last decade, an operator could save tens of thousands of dollars per consist on its annual fuel bill. “It’s a big deal,” Hamilton says. “Fuel costs are typically the largest component in a rail operator’s costs.”
Oh I fully expect trains to eventually go electric. It’s just going to take a while. Trucks and automobiles are ready for a serious infrastructure swap out for real, now. With lessons from the past it would be a mistake to turn our backs on the option to swap out the infrastructure wen we can do it with fracked oil there as a backup. Not to mention how well truck and automobile electric vehicles fit hand in glove with a storage based grid.
That link was pretty cool. So they’re going to build a virtual “prius” out of a stack of locomotives. Smart.
I don’t follow rail closely. However my leading macroscopic economic indicator is a rail yard I ride by bike by two times a day. Starting Oct 2007 that rail yard went into a reduced tempo and stayed that way all thru the 2008 downturn. As the economy ebbed and grew, the train yard would lead the overall numbers. So I watch trains, but not the industry.
That would be one of the old Southern Pacific yards, now Union Pacific, on the second transcontinental route that runs through where I live in Texas. Most of the traffic would be cargo from Pacific ports going East.
It’s a UP yard now I think. It’s also THE REASON, as I understand it, we had the Gadsten Purchase.
Yes, it was. Pity they never followed up by buying Baja, it would be just like Southern California today. And there would have been some great observatories built in those mountains. The Mexican National Observatory at Sierra de San Pedro Mártir is just an example of what might have been.
Already are. And like you said, it would be like S California. Paolmar and Mt Wilson are …. not what they used to be. Not taking Baja was smart. we’d have a equiv of the cuban boat lift going at the same time as the border rush.
Just for the record, I am mostly Libertarian. Doesn’t mean that some Libertarians and some professed policies aren’t crazier than a basketball bat.
My problem with Democrats and Republicans alike is their mutual idea that the problems will be solved if only we get “our” people in charge. To whatever extent that I disagree with your positions on some things, I have no illusion that I can do a better job of managing your affairs than you do.
Government interference with GM building up the auto industry in China is not acting in GM’s best interest. Clearly in the short term, GM makes substantial gains by selling their industry to China. It’s good for the United States and its citizens to limit, or eliminate the actions of GM as it acts within GM’s interests and the interests of its corporate board and investors. That’s not the government saying we know what’s better for GM, that’s the government acting in the interests of the nation as they are in conflict with the interests of GM.
I haven’t been following that particular subject (GM/China) enough to do proper details with you. Without researching it a bit, it would just be another dain bramaged talking points argument. I would like a bit more attention to be paid to why companies offshore in the first place.
I will say that I am no more impressed with Trump than I was with Obama when it comes to foreign affairs. Domestically, Trump has an edge. Better than the alternative doesn’t mean great, it just means the lessor of two evils.
Well consider this in general. A government that runs a command economy is well positioned to create lines of interest for foreign corporations to follow that further the interests of the government. In other words China can create revenue streams for foreign corporations to follow that further the interests of China. They can in essence make a foreign corporation an agent of Chinese government policy. While your Yankee based Libertarian mindset may balk at that sort of thing, to the rest of the world, that’s good governance, and it’s SOP. I don’t have to argue with you about how successful it is.
Why do companies go offshore? Exploitable labor. Why have we ceded our border control to foreign mafia? Exploitable labor. Think how different your business would be if we had American control of the border executing American immigration policy. You’d have nothing to draw from except 3rd or more generation Americans who would expect a salary that would allow them to buy a 2400 sq foot house, have two cars, 2 to 3 kids at home, and have the option of supporting a stay at home parent. They’d demand full health insurance, dental, and probably some sort of retirement plan. Your business would be run in an entirely different way. Business men run away from workers like that when then can, and import labor, illegal or legal when they can’t.
As for your ‘love’ for Trump …. I know you’re not alone. I’d just ask you to consider what metrics you use to judge a political figure’s merit. You invoked his foreign policy. I’ll ask you for any in depth comparison to the conduct and outcome of any of his policies in terms of a description of the problem, the variables, and the outcome. From my POV he has yet to complete anything. His administration has no attention span. He could not even complete the policy thread he’s going to be impeached for.
I will address one of your points. I do not have a magical pot of money to pay unskilled laborers the wages you suggest. Neither do any of the other trades. So basically either the price of houses at least doubles, or we find ways to automate the work, or we go out of business. In any case, less houses would be built and the construction workforce would drop to a fraction of its current size which means houses would be unaffordable to most people and the housing shortage would become severe. So only the rich could then afford a house.
I suggest you contact a few people that run small businesses about their profits and their problems finding decent help.
What is it we’re supposed to be admiring about Chinese rocket use anent SpaceX’s?
Well, the tech sector certainly is. H-1B visas are just articles of indenture in modern dress.
Probably explains the decline in quality at Boeing…
I wonder of if Robert ever found any notes in the Boeing jets he took delivery of like this one.
https://www.huffpost.com/en…
05/01/2017 01:04 pm ET
Updated May 01, 2017
Note Hidden In Walmart Purse Describes Inhumane Conditions In Chinese Prison
“My heart went into my stomach,” Christel Wallace said after finding the letter.
By Nina Golgowski
Come on, I expect better from you. While a lot of what you say is true to one degree or another, it has nothing to do with the fact that the Chinese focus on owning and keeping the industrial infrastructure to do a job, and train and keep workers. Prison labor is a small part of the pie. I wonder how it compares to American use of prison labor at $0.25 an hour? But again, that’s really nothing when taken at a whole. The overbearing advantage Chinese businessmen have is a business ethos of owning the enterprise, while American businessmen see it as a means of extracting as much paper money as possible and when EXPECTATIONS are no longer met, liquidate. No doubt a lot of times that liquidation process involves selling capital assets and processes to the Chinese.
Sure, since most Chinese firms, especially the large ones, have a connection with their government. Clinging to assets works fine when an economy is expanding. Let’s see how well they do when their economy starts going downhill.
That’s the systemic challenge that China’s hybrid command/private economy presents to your Libertarian outlook. Chinese ownership of the enterprise gives them an economy in depth, while our Libertarians are only interested in the bleeding edge now. Making our industrial base hollow. Your hope that China collapses like the USSR us just that a hope. If the US business sector were investing in the USSR and transferring whole industries to the USSR, and giving them advise, as well as executing Soviet national policy the way US enterprises execute Chinese edicts, the USSR would be here to this day. China is not going away.
ROFLOL – Once again you are stereotyping folks, trying to fit them into your black and white world. Evidence shows Chinese firms treat workers the same as American firms when revenues stagnate.
https://fortune.com/2019/04…
Data Sheet—Why Some of China’s Hottest Tech Companies Are Cooling Off
By Aaron Pressman and Clay Chandler
April 10, 2019
“The Information, citing investors, reported Tuesday that NASDAQ-listed JD.com is preparing to lay off as many as 12,000 people, or roughly 8% of its workforce. Bloomberg and Quartz also report the company is planning cuts and has rescinded some job offers.
Reports of layoffs at JD.com follow announcements of similar
retrenchment at other Chinese tech companies. Tencent Holding, China’s mammoth social media and online games provider, said last month it would sack or demote up to 10% of senior and middle management. In February, ride-hailing giant Didi Chuxing said it would slash its workforce by 15%.”
Yon remind me of the folks who were praising Germany and Italy in the 1930’s for their enlighten policies on managing the workforce, providing social benefits and protecting the environment…. Like you they bought into media reports without looking under the hood. U of A has a good library, perhaps you should spend some time in it reading business magazines, the WSJ the New York Times from that era.
I’m fully aware Chinese workers are treated far worse than American workers. I’m far aware they are treated as pieces of meat. That’s why the American business sector is attracted to China. Because labor in China is far more exploitable than in the United States. That’s the main draw to the place for American management. Actually I’m sure you understood this from minute one, you’re just trying to score cheap rhetorical points. Sorry, you lose.
If you truly confused my observation with Chinese management working to maintain ownership of the tools and people to run them vs American managements desire to only control the revenue stream, namely the income stream. Don’t confuse that with any ideas that Chinese labor has any deep seated admiration for their labor pool. I’m well aware Chinese workers operate between a rock and a hard place created for them by their government, management and when possible foreign enterprises.
I am glad to see that you support President Trump in his efforts to discourage American firms from operating in China, and punishing them and the Chinese by putting tariffs on the goods they import into the United States. Letting, and even encouraging American business to go international as been one of the flagship programs of the Washington swamp.
As usual, you fail utterly to grapple with the inevitable economic fallout of the epic demographic implosion now underway in China. You are correct that China, as a nation, is not going away, but the PRC’s days are numbered.
The Chinese “industrial policy” is to use the profits of its private sector to backfill the losses and insolvency of its state-owned sector. This was greatly assisted for quite awhile by dysfunctional Democrat tax policy that drove American businesses out of the country. Now that said tax policy has been spiked, we will see much less of this. The idea that the Chinese system is somehow intrinsically superior to the U.S. system is simply risible.
As for wind and solar energy the Germans certainly haven’t been doing too well by “going Green.” Germany’s electrical infrastructure has gotten steadily less reliable and the price of electricity has risen to such an extent that “energy poverty” has entered the German vocabulary as a middle-class complaint. Wind and solar remain, as they’ve always been, sporadic and unpredictable power sources. Adding any significant amount of buffer storage to their infrastructure puts their total costs completely out of line with fossil or nuclear baseload facilities. The Germans don’t have any significant power storage infrastructure either. They make up for the vagaries of wind and solar generation by burning more brown coal.
Considering that both solar and wind power continue to increase their percentages of the U.S.national power infrastructure, it would seem those narsty old Republicans and right-wingers haven’t been notably successful in poisoning either off.
The US private sector has quite a lead on the government backed Chinese effort. Additionally, it us much more nimble. Should China elect to give launch services away, or what’s more likely tack fees onto loans for other services in national development aid packages, they can indeed make some real headway. However we have yet to see the likes of Falcon’s already demonstrated abilities have great effect on the Western space sector. We could be using it to save money across the board on projects public and private. That said, that lack of new activity in the Western economies could also be an opening to the Chinese. As their model is able to kick start enterprises and sustain them for some time before they self sustain. It could very well be that in the long run China spawns more real space development with throw away boosters while Falcon, NG, and BF(x) may not generate as much new activity in the West.
One huge issue is that many of the Chinese that are in America and working in various companies are actually spies. Some are not, but then become aware of deals in which they could easily betray America and their company and be paid by Chinese government 10-100 million.
Falcon has made a HUGE impact on the western space sector. Problem is, that the real item that we need desperately, is multiple private space stations. By having these, it will enable private companies to sell to other nations. In addition, it would allow government and private space to set up for the moon with logistics.
Better yet they’re legal spies. It’s called technology transfer. You can get a degree in it, and you make a lot of paper money doing it.
To your second point. You’re invoking an economy that does not exist. I’m talking about established satellites. Given the high upmass and inexpensive launch rates of Falcon 9, we’re not seeing cheap and simplified satellites come to the fore to extend the existing marketplace. We have a long way to go before there’s a market for crewed space. It might begin next year, but there’s a lot of work to do on that front yet.
Isn’t that what Starlink is doing? Hopefully old space will catch up on it.
That’s a really good point. I’ve asked that myself, but I just don’t know enough to make a call either way.
With SpaceX planning to launch 24 missions next year just for Starlink, it certainly isn’t going to be long before we have quite a bit of new data to conjure with.
Likely they are being delayed as they respond to the complaints of astronomers.
Somehow I don’t think the “great and wonderful” Chinese would be so accommodating as a free enterprise firm like SpaceX is to the issues of different stakeholders. The Chinese definitely wouldn’t care about saving the night sky for kids given they don’t even care about dropping used rockets on them.
https://spacenews.com/space…
SpaceX working on fix for Starlink satellites so they don’t disrupt astronomy
by Sandra Erwin — December 7, 2019
“Since reports first surfaced of Starlink satellites disrupting astronomers,
the company has taken the problem seriously, Shotwell insisted. “We want to make sure we do the right thing to make sure little kids can look through their telescope,” she said. “Astronomy is one of the few things that gets little kids excited about space.”
“we’re not seeing cheap and simplified satellites come to the fore to extend the existing marketplace”
Nonsense. There are already hundreds of such in orbit and their numbers are going nowhere but up. There are even downsized GEO sats.
The Commercial Crew vehicles will certainly fly to ISS next year, but that’s small potatoes. The market for commercial crewed spaceflight could dramatically expand quite suddenly if, say, SpaceX decided to pursue orbital space tourism of the one- or two-orbit “thrill ride” type with SHS then put some of its Starlink earnings behind something like Gateway Foundation’s Von Braun Space Station. It seems there could easily be a growing demand for crew missions to and from the Moon a few years hence as well.
What lack of new activity in Western economies? There is certainly a lot of new space activity in Western economies. New Earth-imaging, weather data and telecom start-ups are springing up all the time. LEO broadband is going to be huge and it’s already started to deploy. There even seems to be a developing market for smaller-than-previous GEO satellites.
Where is all this alleged “development” via Chinese expendables supposed to be coming from? China is going to launch about 30 orbital missions this year and expects to do about the same next year. With Starlink rapidly ramping up, SpaceX, alone, expects to launch about 43 orbital missions next year.
Right, those Starships that are flying already in your imagination are going to be needed to launch that kind of upmass. We’ve seen what peak SpaceX launch rates look like. Maybe we’ll see 20 odd launches next year, maybe they’ll even be on time. 40? No way, we’ve never seen that from SpaceX and we have not seen the deltas in on time performance to indicate they can pull that off. Not to mention the number of launch teams to launch at once every 9 days or so. Your right wing magical thinking is showing itself again. I’ll hold you to that number next year to remind you of how you’re a fan boy and not an analyst.