Yanwen’s blog

Two days ago, I discussed the Bloomberg article “How American Tax Breaks Brought a Chinese Solar Energy Giant to Ohio.” Today, I came across another insightful piece, also from Bloomberg, “US Efforts to Contain Xi’s Push for Tech Supremacy Are Faltering.” 

This article explores the challenges the U.S. faces in curbing China’s rapid technological advancements. Despite sanctions and export controls targeting China’s advanced tech sectors, China has made substantial progress in areas like semiconductor self-sufficiency, artificial intelligence, and other critical technologies. It suggests that U.S. strategies may be falling short, as China’s tech companies continue to adapt swiftly to sanctions, expanding their influence through partnerships in emerging markets.

The article opens with a direct statement: “Since Donald Trump hit Xi Jinping’s government with punitive tariffs in 2018, his push to cut the trade deficit has snowballed into a full-scale bipartisan effort to stop China from becoming the world’s biggest economy and obtaining technology that threatens American military superiority.”

It goes on to affirm that, despite over six years of tariffs, controls, and sanctions, China is steadily positioning toward leading in the industries of the future. New research from Bloomberg Economics and Bloomberg Intelligence shows that China’s industrial policy blueprint, Made in China 2025, has largely succeeded. Of the 13 key technologies Bloomberg tracks, China has already achieved a global leadership position in five and is catching up quickly in seven others.

This means that people worldwide are increasingly using Chinese electric vehicles, browsing on Chinese smartphones, and powering their homes with Chinese solar panels. For Washington, the risk is that policies aimed at containing China could end up isolating the U.S., harming its own businesses and consumers.

Adam Posen, president of the Peterson Institute for International Economics, notes, “China’s technological rise will not be stymied, and might not even be slowed, by U.S. restrictions.” China's manufacturing capacity has reached historic heights, with its trade surplus in manufactured goods, as a share of global GDP, now the largest of any country since the United States after World War II.

While reading the article, a verse by the famous Chinese poet Li Bai comes to mind: 两岸猿声啼不住，轻舟已过万重山 (Liǎng àn yuán shēng tí bù zhù, qīng zhōu yǐ guò wàn chóng shān), which translates as, “The cries of monkeys on both banks cannot stop it; the light boat has already passed through countless mountains.” This verse beautifully captures the scene of fast forward moving despite adversity. Figuratively, it reflects the unstoppable progress we see in China, despite obstacles—symbolized here by the cries of monkeys along the way.

A few days ago, I met a Chinese woman at the YMCA who was seven years my senior and recently retired. I shared with her that I had stopped working at the end of 2016, stop “bending for five bushels of grain” 为五斗米折腰, wèi wǔ dǒu mǐ zhé yāo, figuratively refers to compromising one's integrity or values for a low salary. She asked, "What did you do after retirement?" Truthfully, not much—after all, the pandemic started in 2020.

Back then, I had ambitious plans, yet, surprisingly, I accomplished few items on my list and instead spent a lot of time on things I hadn’t planned for. Writing wasn’t even on my radar, as I assumed it was for those who had nothing else to do. I wanted to enrich my life with experiences worth writing about, to fill my days with action and discovery.

Of course, some unplanned activities crept in: playing games and binge-watching short videos on social media, often under the guise of “relaxation.”

Turning to some recent news, Intel has issued an ultimatum to its employees: choose severance or brace for layoffs. Once a powerhouse in semiconductors, Intel now finds itself excluded from the Dow Jones Industrial Average. This day and night transformation is a story of missed opportunities and shifts in industry focus.

Consider Intel's journey alongside NVIDIA’s rise. Intel’s CPUs have always been the “brains” of computers, while NVIDIA’s GPUs were initially crafted for graphics rendering. CPUs held a must-have status, whereas GPUs, once considered optional, gained increasing relevance in specialized tasks. 

In commercial value, CPUs historically far outshined GPUs, but shifts in demand began to level the playing field. As Bitcoin mining, 3D gaming, and film production took off, NVIDIA’s GPUs surged in popularity. Intel, however, disregarded these “small patches of market,” missing the opportunity to capitalize on new markets.

The lesson learned here? Industry giants often falter not due to a lack of technical prowess but rather the opposite: their dominant strength leads them to overlook tiny signs of emerging trends, over-confident in their invincibility. For instance, Intel dismissed the potential of smartphones, neglecting that market entirely. Yet, as demand grew, the once-overlooked market expanded and once “non-mainstream” products became central, and Intel’s dominance eroded. This shift didn’t happen overnight; it was the result of gradual changes rather than sudden breakthroughs.

I wonder what Intel’s visionary founders—Gordon Moore, Robert Noyce, and Andy Grove—would think of this transformation. Michael S. Malone’s book, The Intel Trinity: How Robert Noyce, Gordon Moore, and Andy Grove Built the World's Most Important Company (2014), delves into the legacy of these pioneers. Though Intel’s CPU remains among the best globally, the question remains: can Intel reclaim its former glory?

The looming shadow of the upcoming election has me viewing every piece of news through its lens. Yesterday, I read an article on Bloomberg, titled "How American Tax Breaks Brought a Chinese Solar Energy Giant to Ohio." The article explores how the Inflation Reduction Act has not only revived American manufacturing jobs but also created a unique opportunity for China to extend its influence in clean energy technology within the U.S. (10/29/2024).

In Ohio, a new factory—a joint venture between Invenergy, an American renewable energy developer (holding 51% ownership), and Longi Green Energy, a leading Chinese solar company (holding 49%)—is now producing solar panels. American workers, alongside Chinese experts, form a skilled and well-paid workforce. With Longi providing advanced technology, the collaboration allows for the production of tariff-free solar panels for the U.S. market.

Currently, over 100 Chinese workers are stationed on site, working with more than 1,000 Americans. This arrangement is temporary, set to end once American workers are fully trained and most Chinese workers return home.

This story exemplifies a growing pattern in renewable energy partnerships between the U.S. and China, combining American labor with Chinese expertise to produce tariff-free solar equipment for the domestic market.

Beyond job creation and competitive wages, this model highlights how international cooperation in green technology is revitalizing local economies. Additionally, China-based companies are replicating this approach across the U.S., establishing high-capacity plants that contribute significantly to American renewable sector.

As the election nears and uncertainty looms larger, questions arise about the future of these U.S.-China manufacturing partnerships. Will these U.S.-China joint ventures in manufacturing survive the political tides? Could they be dismantled under the guise of national security or economic priorities, despite their clear benefits for U.S. jobs, renewable energy goals, and local communities?

A Chinese saying, 合则两利，斗则两伤 (Hé zé liǎng lì, dòu zé liǎng shāng), means "When united, both sides benefit; when at odds, both are harmed." It emphasizes the mutual gains that come from collaboration. At the same time, it hints at the potential losses if political tensions disrupt these partnerships, emphasizing that cooperation leads to growth, while conflict only brings setbacks.

As the U.S. pivots towards a greener future, the fate of these U.S.-China collaborations rests on many things that are beyond control. Whether these ventures can withstand shifting priorities remains to be seen, but their success underscores the Chinese saying, —when united, both sides prosper.

As we approach November and the upcoming election, Robert J. Shiller’s article, "Donald Trump and the Sense of Power," published on November 21, 2016, comes to mind. Shiller, a Nobel Laureate in Economics, delves into the paradox of why Trump’s strongest support in 2016 came from lower-income Americans, even though his policies favored tax cuts for the wealthy.

Shiller attributes this phenomenon not to economic logic but to powerful psychological and social dynamics. Many lower-income voters, he explains, are drawn to charismatic leaders like Trump, who provide a sense of identity, hope, and emotionally resonant narratives.

Trump’s anti-establishment rhetoric, his promise to "drain the swamp," and appeals to national pride fostered a deep connection with voters disillusioned with the political system. 

Through his concept of "narrative economics," Shiller illustrates how stories—such as the promise to restore American greatness—can powerfully shape economic behavior and voting patterns.

For many, supporting policies like tax cuts for the wealthy may seem counterintuitive, but Shiller suggests it can reflect aspirational thinking and a cultural admiration for wealth accumulation. Some voters may envision that they, too, might benefit from such policies one day, driven by the hope of upward mobility.

This example shows how political identity and compelling narratives can sometimes override immediate economic self-interest in voter behavior. 

Finally, as election day nears, it’s worth remembering that voting choices are often influenced not only by personal gain but by shared values, identity, and a belief in a leader’s vision. Shiller’s insights on the influence of storytelling and identity in politics feel as relevant now as ever.

I have two news items worth sharing.

Yesterday, I wrote about food safety in a school cafeteria in Kunming, China. Around the same time, I came across a report on food preparation laws in India. I was somewhat familiar with unsanitary food practices there, which I assumed were cultural—no judgment, as long as people enjoy the food. But the practice of spitting in food is something altogether different.

That India’s government intervened against this practice suggests it’s considered just as unacceptable there. While I may not fully grasp the cultural context, it’s encouraging to see that food safety is becoming a shared priority across borders. 

A Chinese saying goes, 病从口入 (bìng cóng kǒu rù), meaning “illness enters the body through the mouth.” This wisdom underscores the universal importance of safe, clean food preparation, a sentiment now echoed in efforts worldwide.

Turning to another matter of governance, there’s news from Georgia: The losing candidate declared she does not accept the results of the recent parliamentary vote, officially won by the ruling party. She alleged a “Russian special operation” aimed at derailing Georgia’s path toward Europe. Standing with opposition leaders, she called on Georgians to rally, claiming a “total falsification” of their votes. Her words signal potential unrest and a possible escalation of political turmoil in the South Caucasus.

— “Tens of thousands of Georgians, many of them draped in EU and Georgian flags gathered outside parliament in Tbilisi on Monday night, in response to a call from the pro-Western president to press for the annulment of Saturday's election.”

She appealed to the European community to stand behind her after a disputed election that she says was "totally falsified".

Are we seeing the start of a broader trend where election results are increasingly contested? Are we going to see a repeat of January 6th Capitol Hill riot in Georgia? With the U.S. election only a week away, it’s natural to wonder: Could these events be a sign of what’s to come in other countries around the world?