According to the article, what is the perspective of Kevin Rudd, the former Prime Minister of Australia and current Ambassador to the US, regarding the strength of the US scientific, technological, industrial base compared to that of China?
Kevin Rudd, the former Prime Minister of Australia and current Ambassador to the US, stated that “where the American scientific, technological, industrial base has a huge advantage is, frankly, in its inbuilt nimbleness, flexibility, ability to pursue ready sources of capital to invest in products and services which deliver a real return.” This suggests that Rudd believes the US has a significant advantage over China in terms of the agility, adaptability, and accessibility of its resources and funding for innovative projects.
How does Rudd explain the difference in efficiency and effectiveness between the Chinese and American approaches to industrial policy and subsidies?
Rudd explained that success in China’s industrial policy and subsidies is measured by a 5% to 10% return on investment, whereas the American approach focuses more heavily on delivering a real return. He further added that while China has spent 12 times more on subsidies than the US in various sectors such as electric vehicles and semiconductors, the American model provides greater flexibility and a stronger focus on pursuing viable investment opportunities. Rudd noted that the Chinese approach has resulted in concerns about excess inventory and cost depreciation, particularly in the automotive industry. Overall, he suggested that the American model is proving its resilience due to its strong economic foundation and the injection of additional funds through the Biden administration’s industrial policy and subsidy programs, such as the Inflation Reduction Act, CHIPS and Science Act, and Bipartisan Infrastructure Law.
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