News US Aims to Bring Chip Manufacturing Industry Back to Its Soil

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Ajay

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The US Senate and House of Representatives have recently started converging around a bill that would pour taxpayer money into domestic chip production, laying a framework for $25bn worth of direct incentives to stimulate investment in manufacturing capacity, along with advanced research. This plan has been eagerly supported by Texas Republican John Cornyn and New York Democrat Chuck Schumer - representatives of two of the US states with the highest silicon manufacturing rates. However, it's expected that incentives covering some 20% to 30% of the total cost of any new fab and development investment are required to make the US a worthwhile consideration against other, more established countries with higher incentives, existing support logistics and infrastructure, and cheaper labor.

So, we the people are putting up $25B to help our semiconductor businesses. Great, if it works. Now all we need is a decently managed company to put that cash to good use.
 
Feb 4, 2009
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I support this goal however the devil is in the details as in how much money to whom and what goals are assigned to that fund plus what benchmarks exist to know if a goal has be met or missed.
 

Ajay

Lifer
Jan 8, 2001
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I support this goal however the devil is in the details as in how much money to whom and what goals are assigned to that fund plus what benchmarks exist to know if a goal has be met or missed.
I agree. Money to encourage more process and CPU engineers would help, as would money for Industry/University R&D programs for advanced semiconductor research. Just throwing money at fabs seems like a bad idea.
 

plopke

Senior member
Jan 26, 2010
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As a complete outsider ; it is harsh for me to say why not 25billion into education ?

America has the money but I have so many questions :
-Big tech companies want a lot more H1B visas?
-Are fabs to expensive? - not enough high educated workforce? i assume high skilled workers are in extreme demand in the USA like in most countries in the world but how much shortage is there? Really interesting to see if anyone has like a comparison educated workforce USA vs Taiwan.

-Is there enough talent ; is there even any motivation to go for higher education or is the cost so ridiculous?
-25billion dollars seams like almost nothing if you talking about state of the art fabrication and keeping it up to date over multiple generations?

I mean wanting high end fabrication but not having the workforce or resources for it locally feels like throwing away money unless you change something fundamentally?

Then again I am pessimist by nature so if i was in charge nothing would ever change :p.
 

Markfw

Moderator Emeritus, Elite Member
May 16, 2002
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As a complete outsider ; it is harsh for me to say why not 25billion into education ?

America has the money but I have so many questions :
-Big tech companies want a lot more H1B visas?
-Are fabs to expensive? - not enough high educated workforce? i assume high skilled workers are in extreme demand in the USA like in most countries in the world but how much shortage is there? Really interesting to see if anyone has like a comparison educated workforce USA vs Taiwan.

-Is there enough talent ; is there even any motivation to go for higher education or is the cost so ridiculous?
-25billion dollars seams like almost nothing if you talking about state of the art fabrication and keeping it up to date over multiple generations?

I mean wanting high end fabrication but not having the workforce or resources for it locally feels like throwing away money unless you change something fundamentally?

Then again I am pessimist by nature so if i was in charge nothing would ever change :p.
When I was working tech, it seems that they liked the H1B visa for cheap labor. They would work for way less than US college grads.

And I know why they worked so cheap. Most of them were totally incompetent. I know becuase I had to work with them. But managers had no clue, as they were as worthless as the workers.
 
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plopke

Senior member
Jan 26, 2010
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When I was working tech, it seems that they liked the H1B visa for cheap labor. They would work for way less than US college grads.

And I know why they worked so cheap. Most of them were totally incompetent. I know becuase I had to work with them. But managers had no clue, as they were as worthless as the workers.


;s That does not sound good for keeping businesses leading in bleeding edge tech.
 
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Doug S

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When I was working tech, it seems that they liked the H1B visa for cheap labor. They would work for way less than US college grads.

And I know why they worked so cheap. Most of them were totally incompetent. I know becuase I had to work with them. But managers had no clue, as they were as worthless as the workers.

H1B would be easy to fix but the tech industry doesn't want it fixed because they use it for cheaper labor while claiming they can't find qualified people in the US. They can, but those people want higher salaries than they want to pay. That's why they want it expanded, so they can hire more cheap labor and drive down the salaries in the US.

To fix H1B there should be a requirement that the salary paid (after cost of living adjustment since SF doesn't cost the same to live in as Austin or Des Moines) be at or above the 90th percentile for employees in similar roles in the company. If I'm hiring a senior developer role and want to bring in a PhD from India, I have to pay him better than 90% of the other senior developers I have, and better than 80% of the industry wide salaries. The only reason why you should need to bring in someone like that under H1B should be if he has special knowledge or experience you can't find from US applicants.

That would ensure that 1) companies aren't hiring H1Bs for cheap labor and 2) truly encourage the "best and brightest" from other countries to come to the US and get rich - because some will inevitably stay, start up their own company, and create more jobs here.

Maybe that 90th and 80th thing needs some adjustment - I just picked those numbers out of the air to show the magnitude of what I'm suggesting. I'm sure there will be some fudging of the numbers, but setting the thresholds high mean they can't possibly fudge them enough to pay less for H1Bs than they pay for people in the US. That will bring it back to what it is supposedly intended for, bringing in people who have special knowledge or experience that is absent or in severe shortage in the US.

If they did this there wouldn't need to be a limit on H1Bs, the market would adjust itself based on supply and demand.
 

Hitman928

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Apr 15, 2012
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H1B would be easy to fix but the tech industry doesn't want it fixed because they use it for cheaper labor while claiming they can't find qualified people in the US. They can, but those people want higher salaries than they want to pay. That's why they want it expanded, so they can hire more cheap labor and drive down the salaries in the US.

To fix H1B there should be a requirement that the salary paid (after cost of living adjustment since SF doesn't cost the same to live in as Austin or Des Moines) be at or above the 90th percentile for employees in similar roles in the company. If I'm hiring a senior developer role and want to bring in a PhD from India, I have to pay him better than 90% of the other senior developers I have, and better than 80% of the industry wide salaries. The only reason why you should need to bring in someone like that under H1B should be if he has special knowledge or experience you can't find from US applicants.

That would ensure that 1) companies aren't hiring H1Bs for cheap labor and 2) truly encourage the "best and brightest" from other countries to come to the US and get rich - because some will inevitably stay, start up their own company, and create more jobs here.

Maybe that 90th and 80th thing needs some adjustment - I just picked those numbers out of the air to show the magnitude of what I'm suggesting. I'm sure there will be some fudging of the numbers, but setting the thresholds high mean they can't possibly fudge them enough to pay less for H1Bs than they pay for people in the US. That will bring it back to what it is supposedly intended for, bringing in people who have special knowledge or experience that is absent or in severe shortage in the US.

If they did this there wouldn't need to be a limit on H1Bs, the market would adjust itself based on supply and demand.

Not to get too into politics, but there are some in the U.S. government who have been proposing similar things. It has gotten a lot of push back but I agree, it really needs to be done. I know several people who graduated with engineering degrees or worked as engineers for several years who eventually started doing other things because they could make more or make the same and work less doing other things. If you eliminated the H1B abuse being committed by a lot of U.S. companies, you'd see more domestic talent going into and staying in STEM fields.
 
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Markfw

Moderator Emeritus, Elite Member
May 16, 2002
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H1B would be easy to fix but the tech industry doesn't want it fixed because they use it for cheaper labor while claiming they can't find qualified people in the US. They can, but those people want higher salaries than they want to pay. That's why they want it expanded, so they can hire more cheap labor and drive down the salaries in the US.

To fix H1B there should be a requirement that the salary paid (after cost of living adjustment since SF doesn't cost the same to live in as Austin or Des Moines) be at or above the 90th percentile for employees in similar roles in the company. If I'm hiring a senior developer role and want to bring in a PhD from India, I have to pay him better than 90% of the other senior developers I have, and better than 80% of the industry wide salaries. The only reason why you should need to bring in someone like that under H1B should be if he has special knowledge or experience you can't find from US applicants.

That would ensure that 1) companies aren't hiring H1Bs for cheap labor and 2) truly encourage the "best and brightest" from other countries to come to the US and get rich - because some will inevitably stay, start up their own company, and create more jobs here.

Maybe that 90th and 80th thing needs some adjustment - I just picked those numbers out of the air to show the magnitude of what I'm suggesting. I'm sure there will be some fudging of the numbers, but setting the thresholds high mean they can't possibly fudge them enough to pay less for H1Bs than they pay for people in the US. That will bring it back to what it is supposedly intended for, bringing in people who have special knowledge or experience that is absent or in severe shortage in the US.

If they did this there wouldn't need to be a limit on H1Bs, the market would adjust itself based on supply and demand.
I am in Portland Oregon, there is Intel, and many other tech companies. And cost of living is way less. I know since my old boss from CA, sold his house, and paid cash for one here that is twice the size. And it continues, maybe due to Intel. The number of California plates here is ridiculous. Looks like we live there. Its like a train from CA to Oregon, and it does not stop.

As far as salaries, I think the first thing that needs to happen is a test. See if the degree they got overseas is worth the paper its written on. I doubt it.
 
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ehume

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Nov 6, 2009
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H1B would be easy to fix but the tech industry doesn't want it fixed because they use it for cheaper labor while claiming they can't find qualified people in the US. They can, but those people want higher salaries than they want to pay. That's why they want it expanded, so they can hire more cheap labor and drive down the salaries in the US.

To fix H1B there should be a requirement that the salary paid (after cost of living adjustment since SF doesn't cost the same to live in as Austin or Des Moines) be at or above the 90th percentile for employees in similar roles in the company. If I'm hiring a senior developer role and want to bring in a PhD from India, I have to pay him better than 90% of the other senior developers I have, and better than 80% of the industry wide salaries. The only reason why you should need to bring in someone like that under H1B should be if he has special knowledge or experience you can't find from US applicants.

That would ensure that 1) companies aren't hiring H1Bs for cheap labor and 2) truly encourage the "best and brightest" from other countries to come to the US and get rich - because some will inevitably stay, start up their own company, and create more jobs here.

Maybe that 90th and 80th thing needs some adjustment - I just picked those numbers out of the air to show the magnitude of what I'm suggesting. I'm sure there will be some fudging of the numbers, but setting the thresholds high mean they can't possibly fudge them enough to pay less for H1Bs than they pay for people in the US. That will bring it back to what it is supposedly intended for, bringing in people who have special knowledge or experience that is absent or in severe shortage in the US.

If they did this there wouldn't need to be a limit on H1Bs, the market would adjust itself based on supply and demand.
I have to agree. Decades ago my brother was a machine language programmer for the mainframes that did reservations for airlines. Back then we did not understand the layoffs, since the work went on. Only much later . . .
 

Doug S

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Feb 8, 2020
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As far as salaries, I think the first thing that needs to happen is a test. See if the degree they got overseas is worth the paper its written on. I doubt it.

That's up to the company that hires them to figure out, just like it is for US employees whose degree isn't worth the paper it is printed on (I've met many such over the years)
 

Ajay

Lifer
Jan 8, 2001
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I am in Portland Oregon, there is Intel, and many other tech companies. And cost of living is way less. I know since my old boss from CA, sold his house, and paid cash for one here that is twice the size. And it continues, maybe due to Intel. The number of California plates here is ridiculous. Looks like we live there. Its like a train from CA to Oregon, and it does not stop.

As far as salaries, I think the first thing that needs to happen is a test. See if the degree they got overseas is worth the paper its written on. I doubt it.
There are some excellent overseas universities, OFC. The Korean companies sponsor Universities, have their best scientists and engineers give advanced seminars to grad students and then hire the best students into said company. Grooming you own workforce seem pretty brilliant to me.
 

JasonLD

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Aug 22, 2017
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Pfft.. I guess Intel doesn't really need any fab or R&D money.

Intel announced another round of stock buy backs at the lofty sum of $10B :rolleyes:

Well, that shouldn't affect Intel's R&D expense in any degree. Company would be in bigger trouble if they had to burn through their cash reserve on R&D expense.
 

zir_blazer

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Jun 6, 2013
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I find the idea of getting back manufacturing is funny mainly for three reasons:

1) Costs. How much money and time does it takes to start building a fab and getting it online and ready for production before you start to get a return for your money? Given the current global context, long term plans that would take years before giving back material results are not the type of things that usually attract investors. In China they are doing it because it is heavily state sponsored. Private investors in the western world will not even bother with that much uncertainty, and those that do are for sure because they want a few press releases to stroke someone's ego, and you know who I'm talking about. So I suppose that if you're serious about getting manufacturing back, you will have to spoonfeed resources to private corporations to do it, with a lot of tax money, rebates, or some type of kickbacks... How is that Foxconn plant is Winconsin doing?

2) Backdoors. On the current political climate, I fear less a chinese, taiwanese or russian backdoor in Hardware or Software than one from USA, more so if it was living in that country. Is amazing that on the post-Snowden world where we know all the shenanigans that your intelligence agencies do, that there are people that aren't measuring the risk of having a physical location than can be easy to interdic for a goverment that is currently leaded by a wannabe dictator. And you want to give him the potential for more power when you're forced to use Made-in-USA silicon? I can guarantee you, from a security standpoint, that it will backfire. Maybe your corporations will be safer from industrial espionage, but the little guy has a significantly higher risk of political opression.You have a president that said multiple times "jokes" about that. This will help him to make them a reality.

3) Consumers. Yeah, manufacturing locally may make a few nationalistic/antiglobalist guys happy. Will they be as happy when they have to open their pockets deep enough to pay more for these products? The main reason why all those global corporations did all its outsourcing to Asia is because labor and logistics are cheaper, and the infrastructure is already there. When you have to pay out of your wallet to build from scratch all that, which is something that will take YEARS to do before getting some sort of parity, will you still do it? Consumers will not be happy, and Argentina can tell you something about trying to create an artificial protected environment by putting high import taxes to let some local manufacturers grow, with inferior products that were more expensive, and letting the consumer pay the blunt of it. I want to see the faces of these guys when they figure out that they will be paying themselves the cost of local manufacturing. Or do they expect the investors to do it at a loss? How did the taxes that affected washer machines go? Because I recall a lot of people complaining than your local manufacturers actually jacked up prices now that the outside competence was more expensive.

Remember that once some narcicist sociopath is gone and the world returns to do business as usual, the reasons that made the high costs of this idea reasonable will not be there any longer.
 
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zir_blazer

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Keep it in P&N?

Also, who honestly fears a Taiwanese backdoor? Pretty much nobody.
You can't really talk about this without touching the politics side, else congress or tax payers money wouldn't be involved.

And precisely because no one fears a Taiwanese backdoor, I don't mind TSMC manufacturing whatever chips I use. Can't say the same about state sponsored USA semiconductors given your intelligence agencies track records, or the wishest of your current government:
Doesn't seems like a good idea to have backdoors introduced and managed by your local law enforcement. More so when these are the guys that wants them, and have to enforce the laws.
 
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Thunder 57

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You can't really talk about this without touching the politics side, else congress or tax payers money wouldn't be involved.

And precisely because no one fears a Taiwanese backdoor, I don't mind TSMC manufacturing whatever chips I use. Can't say the same about state sponsored USA semiconductors given your intelligence agencies track records, or the wishest of your current government:
Doesn't seems like a good idea to have backdoors introduced and managed by your local law enforcement. More so when these are the guys that wants them, and have to enforce the laws.

You can do that without saying things like

...for a goverment that is currently leaded by a wannabe dictator

and

...once some narcicist sociopath is gone and the world returns to do business as usual

I hear enough "Orange man bad" stuff every day. I don't want to read it here as well. You could have instead wrote "...for a government with our currently led administration."

and "Once we have a new president...".
 
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A///

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The biggest impediment to building out fabs here are cost, pollution concerns and tax rebates from municipalities or states.



I am in Portland Oregon, there is Intel, and many other tech companies. And cost of living is way less. I know since my old boss from CA, sold his house, and paid cash for one here that is twice the size. And it continues, maybe due to Intel. The number of California plates here is ridiculous. Looks like we live there. Its like a train from CA to Oregon, and it does not stop.

As far as salaries, I think the first thing that needs to happen is a test. See if the degree they got overseas is worth the paper its written on. I doubt it.
Oregon isn't a bad place apart from the rain and snow. And the hipsters.
 

Doug S

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And precisely because no one fears a Taiwanese backdoor, I don't mind TSMC manufacturing whatever chips I use.

No one should fear a chip backdoor regardless of what country the fab is in or is controlled by. TSMC receives a mask set from its customers, so there is no way for them to alter the customer's design and insert something nasty like a new instruction to elevate to ring 0 or equivalent. Even if the fab was located in China and run under the personal supervision of Xi Jinping that couldn't happen.

If you want to worry about backdooring chips, worry about the companies that actually make the mask sets, or better yet make the software that handles the earlier stages of design. If you haven't ever read it, look for "on trusting trust" and let your thoughts wander as you consider the ramifications if someone at Microsoft, Google, or Apple ever managed to perform a similar trick.

Backdoors aren't the reason why the US government should care where chips are made, it is a matter of having control over the means of production of a critical technology. I mean heck we just learned this the hard way over technology as simple as N95 masks and reagents.
 

Hitman928

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No one should fear a chip backdoor regardless of what country the fab is in or is controlled by. TSMC receives a mask set from its customers, so there is no way for them to alter the customer's design and insert something nasty like a new instruction to elevate to ring 0 or equivalent. Even if the fab was located in China and run under the personal supervision of Xi Jinping that couldn't happen.

If you want to worry about backdooring chips, worry about the companies that actually make the mask sets, or better yet make the software that handles the earlier stages of design. If you haven't ever read it, look for "on trusting trust" and let your thoughts wander as you consider the ramifications if someone at Microsoft, Google, or Apple ever managed to perform a similar trick.

Backdoors aren't the reason why the US government should care where chips are made, it is a matter of having control over the means of production of a critical technology. I mean heck we just learned this the hard way over technology as simple as N95 masks and reagents.

The U.S. is very concerned about "bad actors" in the IC supply chain. They have trusted foundry partnerships for the military for this reason (not just for theft reasons). There are multiple attack vectors they are concerned about from start to finish.
 

Doug S

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The U.S. is very concerned about "bad actors" in the IC supply chain. They have trusted foundry partnerships for the military for this reason (not just for theft reasons). There are multiple attack vectors they are concerned about from start to finish.

They are worried about counterfeit chips that don't meet spec (i.e. don't have the same temperature range, aren't rad hard etc.) not that someone is inserting a back door into a complex SoC with a billion transistors.

So it is more that they are worried that they might need a relatively standard part with nonstandard requirements like "this goes in a Mach 3 fighter's intake so it needs to operate from -150C to +450C" and "this goes in a surveillance satellite so it needs to be rad hard and not suffer from errors across a wide range of input voltages". If they can't trust the fab making them they can't be sure they were really made to those requirements, which could increase the cost a thousandfold. You won't know until you fly over the pole during winter, or are over a nuclear explosion, and the chip fails because a standard chip made with the same process as the chip in your phone was substituted to pad profits (or worse, intended to actively sabotage you)

And of course there are security worries that someone can get access to a top secret custom chip designed by the DoD or NRO, which they could view under an electron microscope to see stuff like hardcoded private keys or what have you. Or to get an idea of what sort of capabilities are going into a next gen fighter. Or if they recovered a crashed next gen fighter that had its electronics self-destruct, have a chip that could be used to replace what self destructed (since they could buy most of them off the shelf) so they could get it operational.

There's lots of reasons for the government to want to make stuff in a foundry they trust, that go well beyond why Apple or IBM would care or what is in the economic interest of the US.
 

Hitman928

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They are worried about counterfeit chips that don't meet spec (i.e. don't have the same temperature range, aren't rad hard etc.) not that someone is inserting a back door into a complex SoC with a billion transistors.

So it is more that they are worried that they might need a relatively standard part with nonstandard requirements like "this goes in a Mach 3 fighter's intake so it needs to operate from -150C to +450C" and "this goes in a surveillance satellite so it needs to be rad hard and not suffer from errors across a wide range of input voltages". If they can't trust the fab making them they can't be sure they were really made to those requirements, which could increase the cost a thousandfold. You won't know until you fly over the pole during winter, or are over a nuclear explosion, and the chip fails because a standard chip made with the same process as the chip in your phone was substituted to pad profits (or worse, intended to actively sabotage you)

And of course there are security worries that someone can get access to a top secret custom chip designed by the DoD or NRO, which they could view under an electron microscope to see stuff like hardcoded private keys or what have you. Or to get an idea of what sort of capabilities are going into a next gen fighter. Or if they recovered a crashed next gen fighter that had its electronics self-destruct, have a chip that could be used to replace what self destructed (since they could buy most of them off the shelf) so they could get it operational.

There's lots of reasons for the government to want to make stuff in a foundry they trust, that go well beyond why Apple or IBM would care or what is in the economic interest of the US.

All the concerns you've pointed out are valid and yes, it's more of a concern the the government, specifically the military, but I can tell you with first hand knowledge, they are worried about people messing with ICs at the fab level. Both from hardware trojan horses as well as process manipulation. There is a lot of research going on about this at the university and government R&D levels right now. This could be a worry for someone like Apple as well, though they are not as likely a target for a lot of this stuff as is the government entities.
 

ThatBuzzkiller

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Nope, I think America deserves to be more poor and out of jobs too so they can suck it! I sincerely hope America keeps biting the dust as well ...
 

DrMrLordX

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Apr 27, 2000
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I hear enough "Orange man bad" stuff every day.

Pretty much.

Yes, politics will come into play given how current administrations are run in various counties, but I'd rather not see this thread devolve into some kind of anti-Trump or anti-Xi crapfest.

Nope, I think America deserves to be more poor and out of jobs too so they can suck it! I sincerely hope America keeps biting the dust as well ...

Yow. Okay.