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Cake day: August 5th, 2023

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  • #1 Chips act was entirely a direct result of China’s behavior. GM and Exxon are all determined critical to maintaining national security, so of course the government will intervene with these industries, but even independent companies as tightly intertwined with the US Govt as Lockheed are not guaranteed the funding - as you said it is outsourced through bidding to the firm the government deems best equipped for whatever challenge is presented.

    You may recall there was great backlash to the GM bailout. Even though the bailout was an emergency reaction and not proactive competitive support - many Americans were culturally comfortable watching that company wither. If it were BYD in the same scenario China wouldn’t have even had a discussion, because the government is directly invested in it’s success. Just write the check.

    The type of support you’re citing rarely extends to non-critical industry in western countries, while China is happy to provide investment to gain a competitive edge at any level. I’m not even arguing this is wrong, I just believe it’s largely a cultural distinction.

    I’m also not implying that governments the world over don’t provide incentives to influence market direction, hell that’s a primary role of government, but I do see it as fundamentally different approaches giving a tax cut to incentive product development vs SASAC directly sitting on many Chinese boards.