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  • Threat of Chinese Overcapacity Looms Over Memory Chips

    From ltlee1@21:1/5 to All on Mon Oct 21 13:28:48 2024
    "Chinese overcapacity" is a common term repeated by Western media many
    times.

    Question: Does this kind statement make sense?

    --- SoupGate-Win32 v1.05
    * Origin: fsxNet Usenet Gateway (21:1/5)
  • From ltlee1@21:1/5 to All on Tue Oct 22 11:16:59 2024
    According to the Law of supply and demand taught in every Economic 101
    class, demand is not static. Rather the demand curve would shift
    according to various factors such as the presence or absence of
    competing goods and economic environment.

    If the economy is contracting and consumers are cutting back on certain merchandise, one could make the prediction aggregated supply for that merchandise will be larger than aggregated demand. Still, one cannot
    really tell Chinese, American or country X overcapacity until the
    results are in.

    --- SoupGate-Win32 v1.05
    * Origin: fsxNet Usenet Gateway (21:1/5)
  • From ltlee1@21:1/5 to All on Wed Oct 23 18:52:15 2024
    Another approach to demonstrate the meaninglessness of concepts like
    "Chinese overcapacity" is the rule of profit maximization.

    "The profit maximization rule formula is. MC = MR. Marginal Cost is the increase in cost by producing one more unit of the good. Marginal
    Revenue is the change in total revenue as a result of changing the rate
    of sales by one unit. Marginal Revenue is also the slope of Total
    Revenue. Profit = Total Revenue - Total Costs."

    https://www.intelligenteconomist.com/profit-maximization-rule/

    Implication: Any firm, would increase production until MC=MR. And
    conversely, decrease production until MC=MR.

    Again, the production capacity is not a fixed value. Firm, or firms collectively, would adjust their capacity and production upward or down
    to maximize profit.

    --- SoupGate-Win32 v1.05
    * Origin: fsxNet Usenet Gateway (21:1/5)
  • From ltlee1@21:1/5 to All on Thu Oct 24 14:55:40 2024
    In conclusion, Chinese over capacity is a fake issue. The real issue is
    Chinese firms are likely to out compete currently established firms and
    eat into these firms' profit.

    --- SoupGate-Win32 v1.05
    * Origin: fsxNet Usenet Gateway (21:1/5)
  • From ltlee1@21:1/5 to All on Sat Oct 26 22:05:21 2024
    In addition, nation or nations involved in similar production have
    little confidence to compete with Chinese manufacturing. Hence Newspeak
    such as Chinese overcapacity would used. To hide their incompetence and
    to blame China.

    --- SoupGate-Win32 v1.05
    * Origin: fsxNet Usenet Gateway (21:1/5)