Building Your Dreams
Soft power, consumerism, and driving beyond America
Yesterday, at the Turkish barbershop, I watched (most of) a UEFA game between Malmö and Galatasaray (which is, I’m told, the Turkish football version of the Yankees). The game ended in an exciting 2-2 draw.1
The attraction of the game to me wasn’t just that it was an exciting 2-2 draw (the equalizer was scored by Malmö at the 90th minute) but that the game was being shown on TRT, which is the Turkish version of …. uh, I’m not sure. Technically the BBC but it felt more like Sky or ITV—that is, it was clearly a national channel, but it had ads—a lot of ads.
Let me observe here that this is a dramatic illustration of something that’s become a theme of this newsletter really fast: Americans and America are somewhat less central to the world than they used to be. Nothing in the previous paragraph needed the United States or even had any particular connection to the United States. If the previous paragraph felt alien to an American audience, well…it also felt alien to me in the moment, too. It’s not the American Century anymore (if it ever was).
The ads championed a Turkish coffee shop chain (which looked a hell of a lot nicer than Starbucks), a prestige television series about the conquest of (Christian) Jerusalem, and a Chinese car brand—specifically BYD. (It wasn’t this ad but it was close.)
This came at a convenient time, because I’ve been wanting to talk about Chinese cars for a while.
I mentioned a few months ago that the streets and highways of Qatar boast many more Chinese cars than they did when I last lived here a decade ago. I can now report that the streets and highways of Qatar boast noticeably more Chinese cars than they did when I arrived here in August.2 There are a lot of them, many with names—BYD, Exeed, Geely, Chery—that are English-enough to cause uncanny valley problems (BYD is the most Englishest, as it means “Build Your Dream”). There are others—Changan, Hongqi, Great Wall Motors—that are more clearly Chinese (and that’s not even including the generic [Chinese City Name] Automotive Industrial Corporation formula).
There are Chinese cars that can replace low-end Japanese, European, or American brands. (From here out, I’m just going to call them “legacy” automakers.) There are Chinese cars that compete with mid-priced SUVs and sedans. There are Chinese cars that compete with Bentley, Land Rover, and other premium marques. Most notorious is the Jetour T2, which looks almost like a Land Rover Defender—a valet I was speaking with described as a “Temu Land Rover”, which seems right—but they are also everywhere.
There are three stories percolating in the background of global automotive industry news. One is that legacy brands like Nissan and Stellantis (Chrysler) are going through really tough times—even Volkswagen, whose founder3—
—had, uh, grand ambitions—is laying workers off by the tens of thousands. (Wall Street Journal overview on Stellantis; on Volkswagen.)
The second is that legacy (especially U.S.) automakers are having somewhat of a rough time meeting the transition to electric vehicles, especially in the U.S. market. (Here’s a good Wall Street Journal overview, gift link.)
The third is that Chinese automakers have made the PRC the world’s leading auto exporter in record time, even as PRC automakers have come to dominate the electric vehicle space. (Here’s a good New York Times overview, gift link.)
All of these are connected.
If you’re like me, and visited foreign countries BC (Before China), you might remember that national auto industries used to be a thing. The roadscapes of Rome, Paris, Tokyo, and, of course, Detroit used to look different from each other; Rome had cute, underpowered cars, Paris had weird-looking underpowered cars, Tokyo had good cars, and Detroit had good-looking cars. Before Covid, converging safety standards and the emergence of German and Japanese carmakers as the global default had produced some convergence, accelerated by the rise of South Korean firms, but there were still differences.
Pretty soon, the world will pass through a phase in which there are legacy car markets and Chinese-dominated car markets. You’ll see Geelys, Great Walls, Changans, Cherys, and especially BYDs everywhere, and then in the legacy car markets you’ll see the remaining legacy brands (if I had to guess: Toyota, Honda, Kia, Hyundai, Mercedes, BMW, Ford, and GM, plus two or three others).4 But you won’t see Geelys, Great Walls, or BYDs in legacy markets or markets beholden to them, because the trade walls will be built so high to keep out the invaders.5
Like many of the transformations in the rest of the world, then, this is one that Americans at home won’t experience directly. Instead, it will be something wide-eyed or cynical travellers will simply bake in to their experiences of travels to the rest of the world: “They drive Chinese cars there”, with or without an exclamation mark, more or less the same way I assume the generic phone outside the USA and Europe/Japan/South Korea is a Huawei/Xiaomi rather than a Samsung/Apple.
This is a development I’m tracking because it has international and very personal implications. Internationally, first, it’s wrecking the German auto sector, which is pretty big; it’s also upending North American auto industry and U.S. relations with Mexico, where Chinese cars have swiftly come to dominate the market even though Mexico itself is a hub for “U.S.” carmakers. (New York Times gift link.)
Second, it’s cutting off a rung on the economic development ladder—will Thailand, Vietnam, or Indonesia be able to make cars that compete with Chinese firms that are ruthless, hungry, and backed by state (well, probably provincial?) capital? And can you move up the industrial export-competing development model if the whole auto sector is closed off to you?
Third, Chinese cars are cheap(er) than legacy cars, especially for electric vehicles, and the crazy-quilt subsidy/tariff wall/requirements for U.S. automakers to transition to EVs is a lot weirder and costlier than just letting in Chinese vehicles—although that would have real problems, too!
Fourth, if/when legacy carmakers get hooked on tariff walls to keep out cheaper, and potentially higher-quality, competition, they will never be unhooked. What politician will throw the switch and vaporize tens of thousands, or more, jobs simply to benefit consumers? And industries reliant on protection tend to become less efficient, attractive, and productive over time, which will contribute in some ways to the doom loop I’m afraid may be developing in reaction to Chinese competition.
On the personal level: I need to buy a car here! What do I buy? (The answer will be Toyota.) Cars are expensive, and a saving of 10 to 20 percent (or more: the Jetour T2, the Temu Land Rover, is more like half as expensive as the original) shouldn’t be sneezed at.
So…have I looked at Chinese brands?
Not really. I’m a loyalist (to Japanese cars) and a lot would have to change to shake that. And it also matters that supply chains for parts for Chinese brands are less certain than competitors’—used parts are important.
But…
I have spent a lot of time on r/DubaiPetrolHeads, a car-centric (and Dubai-centric), subreddit, learning more about the local(ish) market. And there’s a growing acceptance of Chinese marques there. Compare the skepticism toward Jetour ten months ago with the applause for the GWM Tank the other day. When car enthusiasts move from outright disdain to conditional criticism to grudging acceptance…well, you know where the tastemakers are headed, and if it’s cheaper, too, then there’s a real shift coming.
So where does this leave us? If you’re American, as many of you are, the takeaway is probably this: the world is moving toward divergence faster than you think, and it’s accelerating faster than you think. There’s a web of trade and cultural connections that are undeniably modern that have nothing to do with the United States. For all the (deserved) praise for books that look at how the United States uses its privileged place in global networks to shape global politics, those seem relatively backward-looking. The central node for the economy of things is China, and it will become more so over the next generation.
Soft power will accrue from this. China is a soft-power laggard—there are cities in South Korea with more musical soft power than China—but eventually wealth and trade find a way. When you’re using a Chinese phone to navigate in your Chinese car to a store where you’ll buy more things fabriqué en Chine—when Chinese brands finally crack the luxury tier via car manufacturing—then eventually even the least pro-China person might finally come to view the country as having some advantages.
Just to repeat something I wrote in the previous two newsletters about a set of changes I’ve made to the paid tiers for this here publication.
I’ve been reluctant to have paywalled content because as a scholar, especially at a public institution (NOTE: I am no longer employed at one!), I’ve felt a responsibility to share my knowledge with the world.
However, there are topics and themes that don’t fit into my areas of expertise, and those are the ones that I’ll be writing about weekly(ish) and paywalling for paying subscribers only. I realize that’s kind of a weird pitch, but I don’t want to be in a position where I’m gatekeeping knowledge, but I’d also like to have a way to support my Macbook habit.
So here’s the “rewards” for going to paid. Paying subscribers will also be able to participate in polls to determine what I’ll write about. Polls will run monthly-ish and will definitely inform my editorial judgment.
As always, paying subscribers will be the only ones allowed to comment on every post.
Finally, those of you who pay for the highest membership tier (renamed “Medici”) will be able to commission a post—a full-length essay that will run here. I don’t expect many takers but, hey, if that’s you, let’s talk!
Thanks to those who have joined. You’ve (genuinely) secured the future of the newsletter. And I will be in touch soon about the privileges of membership.
95% of the Americans reading this sentence just rolled their eyes at soccer.
Is this really plausible? That is, is it really plausible that I would notice this? Well, in October, China exported $18.3 million in cars to Qatar (that month). If we assume that the average imported car (before dealer markup) is running in the ballpark of $20,000 (Qatari riyals are pegged to the dollar, so I can keep this all in hegemonic currency), that gets us to about 900 cars imported that month, or more precisely a range of about 500 to 1,100 PRC-made cars brought in to Qatar. Those numbers are in keeping with the general number of new car registrations in Qatar, conveniently available here, and would represent about five to ten percent of new car registrations. Conveniently, Qatar issues its license plate numbers more or less consecutively, so I can guesstimate there’s about 950,000 private vehicles on the roads (including Ubers). If the numbers are on the low end, then it’s not possible that I’d notice this; if the numbers are on the high end, then while I’ve been here it’s possible that half a percentage point of the Qatari fleet has turned over to become Chinese. If the base rate of Chinese car sales is low—let’s say in the range of five percent, which seems about right—I do think it’s possible I might notice that. BUT. The Qatari market is not your typical market! Two brands—Toyota and Nissan—account for nearly two-thirds of sales here! (The Land Cruiser alone is more than one in eight vehicles sold here.) So the real question is whether I’d notice a change of that magnitude in the scope of the remaining one-third of the market, which is much more plausible. So you should know that I might be hallucinating my visual confirmation of this, but I am not hallucinating the overall trend, which is that Chinese brands have moved from also-rans to second-tier competitors here really, really fast.
Yes, yes, inspiration, I’ve read Small Wonder and I know who Porsche is. Don’t ruin the joke.
OK, I’m also pretty sure Tata will survive, but what I know about Indian auto markets is … scant, so just assume I’m not talking about them.
Great trade walls keeping out Chinese invaders is irony.