I know all this. Nothing you mentioned prevents Chinese companies from making bad or speculative investments. Regulatory authorities are not going to step in just because one company invested into a bunk project that went nowhere. Hundreds of companies go bankrupt in China every week, and hundreds more are formed, as it would be a bureaucratic nightmare for the central economic office to micromanage the investments of individual firms. Speculative venture capital is also not “gaming the system” as insider trading and short selling are, and the entire point is that there is a high risk to those investments.
I don’t see how you describing China’s mixed command economy is at all relevant to a small startup firm taking a risk on a single aircraft frame. A bird in a cage can still choke itself on a poor investment and die.
Sure, and there’s nothing wrong with any of that. The system allows for flexibility that’s necessary for innovation. Companies trying speculative things is how technology progresses. Some ideas will be good, others will not. Meanwhile, the government nudges overall development towards particular goals that are seen as socially useful.
If this particular company is making a product that’s not viable then they will die, and that’s perfectly fine. If their idea works then it will produce something useful that will advance the state of aeronautics in China. Either way something useful will be learned in the process.
I know all this. Nothing you mentioned prevents Chinese companies from making bad or speculative investments. Regulatory authorities are not going to step in just because one company invested into a bunk project that went nowhere. Hundreds of companies go bankrupt in China every week, and hundreds more are formed, as it would be a bureaucratic nightmare for the central economic office to micromanage the investments of individual firms. Speculative venture capital is also not “gaming the system” as insider trading and short selling are, and the entire point is that there is a high risk to those investments.
I don’t see how you describing China’s mixed command economy is at all relevant to a small startup firm taking a risk on a single aircraft frame. A bird in a cage can still choke itself on a poor investment and die.
Sure, and there’s nothing wrong with any of that. The system allows for flexibility that’s necessary for innovation. Companies trying speculative things is how technology progresses. Some ideas will be good, others will not. Meanwhile, the government nudges overall development towards particular goals that are seen as socially useful.
If this particular company is making a product that’s not viable then they will die, and that’s perfectly fine. If their idea works then it will produce something useful that will advance the state of aeronautics in China. Either way something useful will be learned in the process.