The 2nd China Shock: Why Chinese Companies Are Making Zero Profit

This week, Noah Smith and Erik Torenberg analyze recent global events—from a political shift in New York to the Israel-Iran conflict—while exploring U.S.-China economic dynamics, evolving industrial policies, and the risk of a recession. The conversation also touches on historical economic shifts, tariffs, and manufacturing trends. – SPONSORS: Carta Carta is offering up to 40% off a new Carta plan, including cap table management, QSBS Attestation, and Carta Total Compensation. This limited-time offer runs through the end of July at ⁠z.carta.com/econ102⁠. NetSuite More than 42,000 businesses have already upgraded to NetSuite by Oracle, the #1 cloud financial system bringing accounting, financial management, inventory, HR, into ONE proven platform. Download the CFO's Guide to AI and Machine learning: ⁠⁠⁠⁠⁠⁠⁠⁠⁠https://netsuite.com/102⁠⁠⁠⁠⁠⁠⁠⁠⁠ Shopify Shopify is the world's leading e-commerce platform, offering a market-leading checkout system Shoppay and exclusive AI apps. Nobody does selling better than Shopify. Get a $1 per month trial at ⁠⁠⁠⁠https://shopify.com/momentofzen⁠⁠⁠⁠. AdQuick The easiest way to book out-of-home ads (like billboards, vehicle wraps, and airport displays) the same way you would order an Uber. Ready to get your brand the attention it deserves? Visit ⁠⁠⁠⁠⁠⁠⁠⁠⁠https://adquick.com/⁠⁠⁠⁠⁠⁠⁠⁠⁠ today to start reaching your customers in the real world. – SEND US YOUR Q's FOR NOAH TO ANSWER ON AIR: [email protected] – FOLLOW ON X: @noahpinion @eriktorenberg @turpentinemedia – RECOMMENDED IN THIS EPISODE: China's industrial policy has an unprofitability problem: https://www.noahpinion.blog/p/chinas-industrial-policy-has-an-unprofitability Noahpinion: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠https://www.noahpinion.blog/⁠⁠⁠⁠⁠⁠⁠⁠ ⁠⁠ – TAKEAWAYS: New York City Politics: Discussion of a "Muslim socialist" winning what appears to be a NYC mayoral race. Middle East Geopolitics: Analysis of recent Iran bombing and its economic implications. China's Current Industrial Policy Problems: Xi Jinping's aggressive subsidization of strategic industries (EVs, semiconductors, batteries, solar panels). Key Economic Insights: China's export percentage of GDP is now lower than many developed countries, but the absolute volume still creates massive global impact due to China's size. US Manufacturing Revival: The importance of reducing regulatory barriers to enable more "sub-Elons" (entrepreneurs like Elon Musk). Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.