alt Hacker NewsI found a very detailed and well argumented opinion piece on X that struck really hard on this topic: https://x.com/BetterCallMedhi/status/2027625247068065864
Here's the plain text in case you don't want to go to X:
>"I spent time in Shenzhen last year and when I saw Merz come back from China saying Germans need to work more I immediately knew what broke his brain because I lived the exact same cognitive shock
my first week in Huaqiangbei I burned through 4 prototype iterations of a motor controller board for less than a thousand bucks total, back home a friend was working on something similar and spent over 12 thousand for a single revision that took almost two months to arrive
when you live that contrast in your own hands with your own project something permanently shifts in how you see the world and it goes way deeper than speed & cost
what Shenzhen actually built is a collective learning organism, imagine 20 PCB fabs 15 injection mold shops 30 component distributors and a hundred firmware freelancers all within a 2km radius, looks insanely redundant from the outside until you realize redundancy is actually information density in disguise
I watched this firsthand with an injection mold supplier I was working with, this guy had seen a hundred founders iterate similar thermal designs over 6 months so he proactively modified his tooling before I even opened my mouth, he knew what I needed before I knew what I needed, the intelligence lives in the relationships between the nodes and it compounds daily
the west thinks about manufacturing as a cost center you optimize by centralizing…
China accidentally built a distributed neural network of manufacturing intelligence where knowledge diffuses horizontally across thousands of agents faster than any single western company can process internally
so when Merz comes back and says we need to work a bit more I think he saw the problem but COMPLETELY misdiagnosed the solution, telling Germans to work harder is like telling a horse to gallop faster when the other side built a combustion engine
the gap is ARCHITECTURAL
it’s ecosystem density, you need a custom connector in Shenzhen you walk 200 meters, in Munich you send an email and wait 3 weeks
it’s iteration speed, parallel search vs sequential optimization at the system level, it’s risk tolerance, Chinese founders ship something broken on Monday fix it Tuesday ship again Wednesday while European companies are still in the approval phase for the pilot program of the feasibility study…
and Merz only saw the surface, what he missed is the tier 2 cities like Hefei Chengdu Wuhan replicating the Shenzhen model at scale right now
BYD going from irrelevant to outselling every european automaker combined in roughly 5 years, Huawei building its own 7nm chip under maximum sanctions when every analyst said it was physically impossible & behind all of that a government that treats advanced manufacturing as an existential national priority while europe debates whether AI needs another ethics committee
I think what we’re watching is the most asymmetric economic competition in modern history and most western leaders are still framing it as a productivity problem when it’s actually an ontological one
Europe & America are optimizing variables that China stopped tracking years ago meanwhile China is compounding on dimensions the west has no framework to even measure Merz at least had the courage to name it out loud and I respect that genuinely but working a bit more inside a broken architecture just means you arrive at the wrong destination slightly faster
Europe’s answer to China is always a committee, a regulation, a 5 year strategic plan and a press conference
China’s answer to anything is ship it tomorrow and figure out the rest next week
one side is trying to predict the future the other side is building it live and adjusting in real time, that asymmetry alone tells you everything about who wins this century "
Replies
Is there realistically a path to the west learning any of these lessons without going through WW3?
It’s not like any of this is news. My newspaper of choice has been telling me about how fast china moves, in vivid detail, since at least 2018 - others probably knew much earlier than I did. I watched a graphic documentary on YouTube about Shenzhen in 2019 that gave me all of the same information in this tweet, minus the accomplishments that have happened since then.
My own eyes have seen how their consumer goods have transformed in a very short time. Maybe other Americans don’t notice because the key categories (tech, cars) have so much protectionism. I’m not sure about the Europeans.
The west is better at coming up with excuses and red tape than actually solving problems, it seems.
100% agree. I am whitnessimg this on a daily basis working for a german company that develops both hard and software for indistrial machines.
> China accidentally built a distributed neural network of manufacturing intelligence where knowledge diffuses horizontally across thousands of agents
I find it difficult to take statements like this seriously.
China has built an incredibly dense manufacturing zone. They've done so by manufacturing more cheaply than other countries do, a key element of which is paying workers less than any European country would be able to do. The rest of what's being described is just what falls into place once you've created that dense, cheap in demand manufacturing zone.
Looking back, people had the exact same kinds of reactions (regarded as cheap trash => cutting edge) to the Japanese electronics industry 40 years ago, with the eact same takes (overstated rationalizations focussing on process, organization, culture; I could probably find like 20 different books discussing those in excruciating detail in a minute).
But the simplest explanation is just basic economics and nothing else (growth being fueled by cost difference, mostly from cheap labor, and to a far smaller extend network effects).
I predict Chinese growth slowing down exactly the same way other countries did as wage gaps get smaller.
This is more like inefficiency in sheeps clothing. Being able to iterate that quickly and cheaply relies on spare capacity and people making salaries 10-25% of what Germans get.
>Here's the plain text in case you don't want to go to X
Nitter to the rescue!
https://xcancel.com/BetterCallMedhi/status/20276252470680658...
This diffusion requires a different attitude towards IPR. Western countries prioritize protection of past investments (or dometes just the first to stumble through a gate or file first).
>Europe & America are optimizing variables that China stopped tracking years ago
Net income?
>looks insanely redundant from the outside until you realize redundancy is actually information density in disguise
Everyone knows redundancy costs money today in exchange for security tomorrow. Presumably, Chinese executives are earning more by keeping redundancy, whereas executives in Europe and the US earn more by removing redundancy.
How does China incentivize its executives to spend money on redundancy? I have to imagine it's some type of top down system that fights against personal interests to advance the interests of the tribe (obviously at the expense of personal liberties).
Meanwhile our top VCs continue to invest in SaaS, AI (new SaaS), and crypto (ponzi returns) because I guess the only thing that matters is widening the wealth gap and enjoying the yacht life.
I work in VC and make early stage investments primarily into industrial or other physical industries. It often feels like an uphill battle trying to get people to take interest in this stuff.
My most recent company sources from China because the US infrastructure can’t supply what we need. This is a company that will be worth billions when it scales up and the US literally cannot supply it because our factories are so ancient.
This is an excellent analysis of the issue.
> Europe’s answer to China is always a committee, a regulation, a 5 year strategic plan and a press conference
> China’s answer to anything is ship it tomorrow and figure out the rest next week
Yes, god knows we'd never see the Chinese delivering 5 year strategic plans, and they're notably committee-averse.
A large part of China's success is they've been intentional about what they're doing - they've _had_ a strategy, whereas every time we consider that in the West, we're told that's a loser's bet and we need to just let the market do its thing.