The erosion of America's manufacturing and industrial base: part 1

The American industrial and manufacturing base has been in a state of decline in the past three decades compared to China's rapid advancement in the fields of physics, biology, and their applied derivatives.

It's absolutely fundamental to understand the core reasons for the decline of America in these fields and why China has been able to close the gap in critical parts of the supply chain that they have been prohibited from accessing, starting with Trump's tarrifs, the ASML ban, and the recent ban on AI chips announced by the US secretary of commerce.

It's also critical to gain a grasp on why the tarrifs are not a long-term strategy for
America and why America needs structural changes to be able to face growing competition from China.

Simply put, China is moving at a faster pace than America, and when we said America was declining, that's what we meant because if America stopped moving, it would be dead. The numbers that illustrate that are the economic growth rate, the manufacturing indices, the production capacity, and the global market share across different industries.

We'll explain in detail the specifics of some industries, like drones, AI, 5.5G, semiconductor chips, and batteries.

Chinese companies control over 70% of the global commercial drone market through DJI, and many of the Chinese companies complement it.

The most important factor is the abundance and the really cheaper cost of labor in China compared to the US, especially when considering exchange rates. and this gives China an advantage in both production rate and net numbers.

But it gets even more complex than that. The Dji main controller boards are a result of a very vibrant and active hardware market in China that facilitates different components of the supply chain being open-sourced and readily available to be re-organized into many products desired by entrepreneurs and shipped all over the globe.

Shenzgu is such a city that can compile these different products with relative ease to make prototypes of many of these products and prepare for mass production.

This is all orchestrated by the guiding hands of China's rulers, who make sure that the strategic goals of the country are timely and effectively implemented.

China recently had a real estate debt bubble that hindered resource allocation within the Chinese economy, and it seems like America worked over time to guide China to its next step as the country will be pivoting towards allocating resources for manufacturing and specifically the semiconductor industry.

Lending to industrial companies and semiconductor manufacturing has been put at the forefront after America's ban on AI chip exports to China and the announcement of the ban on ASML's DUV machine exports.

While loans to the manufacturing sector increased by 38.2%, outstanding loans to the ailing real estate sector decreased by 0.2% year over year, and from $63 billion in the first nine months of 2019 to $680 billion in the first nine months of this year, net lending to industrial enterprises increased dramatically.

So the speed of China's refocusing on the most pressing issues seems very fast and responsive to what it needs to overthrow the basic structures that form the United States hegemony: the industrial and technological base beginning with the most fundamental building block of our time, semiconductor chips.