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.

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SEND US YOUR Q's FOR NOAH TO ANSWER ON AIR: Econ102@Turpentine.co

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FOLLOW ON X:

@noahpinion

@eriktorenberg

@turpentinemedia

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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/⁠⁠⁠⁠⁠⁠⁠⁠ ⁠⁠

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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).

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