China's companies are often state controlled. (if not outright owned, then the government controls a commanding stake) With an intense focus on keeping employment high, they are lothe to cut production in any way that would see to a lost of jobs.
So they're in a catch of their own: They know if they continue to produce, they'll flood the market and depress the price, (mind you, this lowers the profit they can obtain per-panel as well) but if they scale back to keep the demand higher, they'll need to cut factory shifts, which means letting go of workers (and dealing with the instability that follows)
The State's interest is in maintaining stability in society above all else, even in the face of sound economic sense. Unfortunately for all involved, this is not terribly sustainable. One of those shoes will drop eventually. Manufacturing in China is starting to suffer noticeably despite their best efforts to dress it up. Either the economy is allowed to liberalize and adjust normally (as it does in western countries), or it breaks down. Both scenarios would bring a critical eye to the Party.
>>So they're in a catch of their own: They know if they continue to produce, they'll flood the market and depress the price
They only need to depress the prices until they kill off the non-Chinese competition, then they have a money earning business. After that, repeat the procedure for the next industry...
(This is the standard business model of monopolies. I believe a classic example are big bakery chains which enter an area and kills off the local small bakeries with low prices, then they raise the prices above the prices of the now-gone bakeries, to finance taking over the next area.)
> "It would be very easy to blow them out of the market by offering cheaper flights than them with better customer service."
Conceptually sure, but in reality not at all. Airlines are extremely capital intensive. Everything aspect of their operation means truckloads of cash.
Airplanes cost a lot of money. Trained maintenance crews cost a lot of money. Hangars cost a lot of money. Parking at a major airport costs a lot of money. Forget flight attendants and amenities, just getting a barebones aircraft off the ground costs tens, if not hundreds of millions of dollars.
So there's a big caveat here: nobody enjoys flying Ryanair, it would be easy to blow them out of the market if you had a source for a few hundred million dollars of funding to get started.
China's companies are often state controlled. (if not outright owned, then the government controls a commanding stake) With an intense focus on keeping employment high, they are lothe to cut production in any way that would see to a lost of jobs.
So they're in a catch of their own: They know if they continue to produce, they'll flood the market and depress the price, (mind you, this lowers the profit they can obtain per-panel as well) but if they scale back to keep the demand higher, they'll need to cut factory shifts, which means letting go of workers (and dealing with the instability that follows)
The State's interest is in maintaining stability in society above all else, even in the face of sound economic sense. Unfortunately for all involved, this is not terribly sustainable. One of those shoes will drop eventually. Manufacturing in China is starting to suffer noticeably despite their best efforts to dress it up. Either the economy is allowed to liberalize and adjust normally (as it does in western countries), or it breaks down. Both scenarios would bring a critical eye to the Party.