The many companies that don't make money generally don't become prominent. But with CCP financial backing, more Chinese companies can take bigger risks in sectors we would prefer that they don't.

State capitalism has advantages and disadvantages compared to free market capitalism. Meeting long-term strategic objectives of the government is an advantage of the Chinese system. The US might be able to match it with various incentives, if we can pass them and keep them in place for decades.

The excuse is presumably that the US would prefer to continue leading the global economy in emerging technologies for long-term strategic reasons unrelated to jobs or prices.

It might not be good domestic economic policy, but it could be good US hegemony policy, which I think is better for the long term health of neoliberalism than letting CCP state banks sink their claws into critical industries globally.

US companies can't compete with Chinese state-backed corps. CCP corps can operate at a financial loss forever because their real purpose is to spread CCP hegemony and not make money.

They can make money, but they don't need to. When I pitched VCs, boards, CorpDev etc... for funding projects in the US, my theses had to be based on a financial ROI.

This year many big tech / Fortune companies hacked off their innovation arms to laser-focus on quarterly and yearly targets, because that is what the market is rewarding at the moment. It's difficult to get exploratory and long-term projects funded right now (unless you can work in AI).

When somebody in China pitches to the state-owned investment banks and so on, part of that pitch includes how the investment will help advance Party interests. That can be a hindrance in many cases, but it can also open up bigger/riskier funding for projects seen as having strategic value.

It's easier for Chinese corps to take risks and operate at a loss in the areas the US specifically does not want them to. It's not free market competition when one side is essentially a façade for a government.

That said, I think we should be more like China and set up strategic investment funds rather than use tariffs, but tariffs may be an effective way to stop the gap from widening while we get other measures in place.