The Off Topic Topic

[Josquius]

How much is loss and how much is China just growing a shit tonne.
World manufacturing capacity I imagine is a lot higher today than 30 years ago.
Percentages like this  are the wrong way to show international comparisons.

[mongers]

How much is loss and how much is China just growing a shit tonne.
World manufacturing capacity I imagine is a lot higher today than 30 years ago.
Percentages like this  are the wrong way to show international comparisons.

That's a good point, and the percentage stagnation of Indonesia speaks to that.
 
But over all I find the figures chosen a bit odd, what exactly is Ireland now manufacturing that puts it on a par with Brazil, Russia, Canada and far ahead of the likes of Australia and Argentina?  Other than say manufacturing off-shore profits for mega corporations?

[Sheilbh]

But over all I find the figures chosen a bit odd, what exactly is Ireland now manufacturing that puts it on a par with Brazil, Russia, Canada and far ahead of the likes of Australia and Argentina?  Other than say manufacturing off-shore profits for mega corporations?

If it's by value then about two thirds of Ireland's goods exports are pharmaceuticals. It's the largest pharma exporter in the EU (and I think that even includes Denmark/Ozempic) and I think one of the top five globally.

It's the positive side of the Irish model (highly educated, English speaking, EU member and low taxes) - and until the 00s it wasn't American tech companies like Meta that exemplified that model but Pfizer.

[Richard Hakluyt]

Note that in 2023 China, with over four times the population of the USA, has just over double the US manufacturing share. ie per capita the USA still produces twice as much value in manufactured goods. That surprised me, I thought they might be on a par.

The Ireland figure is a bit wacky, perhaps a lot of EU exports (the pharmaceutical products?) are funnelled through Ireland 

[Richard Hakluyt]

I started looking for a pen portrait of the Irish economy and found this https://oec.world/en/profile/country/irl?importServicesYearsSelector=2020

Absolutely fascinating.

Service imports of $240bn a year, that is about $48k per head. Of that $240bn just shy of $100bn was for "other royalties and licence fees" ...again, about $20k on royalties for every man , woman and child in the country 

Yet I was on holiday in Donegal last year and thought it was just the same as it always has been 

[Josquius]

I started looking for a pen portrait of the Irish economy and found this https://oec.world/en/profile/country/irl?importServicesYearsSelector=2020

Absolutely fascinating.

Service imports of $240bn a year, that is about $48k per head. Of that $240bn just shy of $100bn was for "other royalties and licence fees" ...again, about $20k on royalties for every man , woman and child in the country 

Yet I was on holiday in Donegal last year and thought it was just the same as it always has been 

Worse in many places is the vibe I hear. The EU money building motorways and standard global patterns applying there too have destroyed small towns. I've heard some moans of Ireland with Dublin is worse than the UK with London even.

Note that in 2023 China, with over four times the population of the USA, has just over double the US manufacturing share. ie per capita the USA still produces twice as much value in manufactured goods. That surprised me, I thought they might be on a par.

True. Given all you hear about the doom of American industry they're still quite the beast.

Though I guess perceptions are warped by automation. I know the UK today (a few years ago? Recently anyway) produces more cars than it ever has before, but with a tiny fraction of the workforce it had 50 years back.

[The Minsky Moment]

ie per capita the USA still produces twice as much value in manufactured goods.

Key word is value.  PRC is still a high-volume producer of relatively low value-added tasks (assembly) and components. US manufacturing is concentrated on the high end of the value chain.  High productivity, but the flip side of high levels of productivity is low levels of employment per unit of capital.

The Ireland figure is a bit wacky, perhaps a lot of EU exports (the pharmaceutical products?) are funnelled through Ireland 

It's because lots of multi-national corporations form Irish affiliates to hold their intellectual property assets for tax reasons. The affiliates then "license" the IP to other parts of the corporate group: these transactions are designed to siphon group profits from higher tax jurisdiction to low tax Ireland.  What is basically a meaningless paper accounting exercise on internal corporate books for tax avoidance gets treated in the government accounts as an international trade flow.

This is what is so ridiculous about Trump's maniacal focus on trade deficits.  A lot of what is reflected in these numbers has little to do with economic fundamentals. Ireland has a massive trade "surplus" not because it is a manufacturing powerhouse but because fake transactions for tax avoidance purposes are treated as trade flows.  The PRC runs big surpluses in the trade accounting because it specializes in assembly and shipping of intermediate and final goods but for much of what they export, key components are made elsewhere and they don't control the tech and the branding. 

[Sheilbh]

The other point on China is that they've had the Made in China 2025 strategy (which I think is probably one of the most significant political events of the last 10 years) to move up the value chain. And I think the indications are they have been successful in that, via Bloomberg:


That will continue to shift - so for example currently their commercial aircraft have relatively few Chinese inputs. But their vehicle industry also had relatively few Chinese inputs 10-15 years ago. They have adapted and learned in order to build that so there's a far more secure domestic supply chain into the end product. I think the expectation is that the same will happen in, say, commercial aircraft manufacturing.

It's also a big part of why the US has been using sanctions and trade restrictions to basically stymie China's technological capacity. There are some areas where it looks like that's been successful (for example my understanding is it has had a real impact on chips - in part possibly because that sector got out over their skis in briefing party leadership on how successful they'd been), and other areas where it seems to be less of a constraint than expected.

[mongers]

ie per capita the USA still produces twice as much value in manufactured goods.

Key word is value.  PRC is still a high-volume producer of relatively low value-added tasks (assembly) and components. US manufacturing is concentrated on the high end of the value chain.  High productivity, but the flip side of high levels of productivity is low levels of employment per unit of capital.

The Ireland figure is a bit wacky, perhaps a lot of EU exports (the pharmaceutical products?) are funnelled through Ireland 

It's because lots of multi-national corporations form Irish affiliates to hold their intellectual property assets for tax reasons. The affiliates then "license" the IP to other parts of the corporate group: these transactions are designed to siphon group profits from higher tax jurisdiction to low tax Ireland.  What is basically a meaningless paper accounting exercise on internal corporate books for tax avoidance gets treated in the government accounts as an international trade flow.

This is what is so ridiculous about Trump's maniacal focus on trade deficits.  A lot of what is reflected in these numbers has little to do with economic fundamentals. Ireland has a massive trade "surplus" not because it is a manufacturing powerhouse but because fake transactions for tax avoidance purposes are treated as trade flows.  The PRC runs big surpluses in the trade accounting because it specializes in assembly and shipping of intermediate and final goods but for much of what they export, key components are made elsewhere and they don't control the tech and the branding. 

Interesting, thanks for confirming my hunch:

That's a good point, and the percentage stagnation of Indonesia speaks to that.
 
But over all I find the figures chosen a bit odd, what exactly is Ireland now manufacturing that puts it on a par with Brazil, Russia, Canada and far ahead of the likes of Australia and Argentina?  Other than say manufacturing off-shore profits for mega corporations?

Still a bit confused about why the UN can't extract such paper transactions out of their manufacturing figures.

[Sheilbh]

The UN just reports figures from national governments and I think this is in line with international statistics/accounting rules.

[grumbler]

The UN just reports figures from national governments and I think this is in line with international statistics/accounting rules.

So Ireland is a leading manufacturing nation because the government calls some services manufacturing?

[Jacob]

The UN just reports figures from national governments and I think this is in line with international statistics/accounting rules.

So Ireland is a leading manufacturing nation because the government calls some services manufacturing?

My understanding of the argument is that Ireland is a "leading manufacturing nation" because international companies move significant amounts of EU manufacturing revenue to Ireland as a strategy to minimize tax exposure.

[mongers]

Man I've not seen Languish this busy in a while (since the last invasion/war), currently 21 active posters! :gasp:

[Jacob]

Well, the world is going to shit in a "grand strategy" kind of way. It makes sense we turn to our established grand strategy social group to discuss.

[Sheilbh]

I unironically think Paradox might be to blame for at least some of what's going wrong with young men online's political views

Oh how we laughed at Lettow. Little did we know he'd probably end up as a "thought leader" for a MAGA-affiliated think tank.