> the rest is in debt/equity swaps which aren't going to be upfront costs

Those are still an upfront cost on Anhui's treasury as it is counted as a liability, and a liability with limited ability to service due to the relatively weak municipal and provincial bonds market due to the ongoing LGFV crisis.

> Ohio's situation is similar, with ~8% of yearly revenue spent on that one single TSMC [Intel, not TSMC - good catch selimthegrim] building. Ohio's direct revenue is only around 25B/yr, with the vast majority of the budget being funded by the federal government (mostly pass through, for example Medicare)

Ohio only gave $0.6B - ie. 2.4% [0] (and even that was controversial [1]). The rest of the $7.4B came from the CHIPS Act.

Furthermore Ohio has a AAA credit rating score [2] meaning it can borrow at low-to-no interest, which doesn't really exist as an option at scale in most Chinese provinces.

And finally, this investment by Ohio generated jobs within Ohio. The Tsinghua Unigroup bag-holding isn't allocating Capex for Anhui, as most of Tsinghua Unigroup's assets are not in Anhui.

That said, a capex-to-jobs case could be made for JAC Group and Volkswagen China which have Anhui government ownership stakes, but then again they themselves are losing marketshare to BYD - a privately funded company - like just about every other car manufacturer in China (the majority of whom are SOEs or have an ownership stake from Provinces or Central Ministries).

It's not so say American states haven't made similar mistakes before (eg. the NY Corruption indictments following the Buffalo Billions Scandal), but the fact that Buffalo Billions was news is itself a major deal - corruption and misallocation of capital within the BigFund and SOEs is sadly the norm in China, and everyday I can see CCDI arresting yet another person, while ignoring others until they piss off the wrong guy (and occasionally, even CCDI themselves are found to be corrupt).

> Again, the argument from the start was about outcomes in funding for the industry. I have not argued anywhere that Unigroup's leadership deserves any credit, just that some of the funding allocated to Unigroup - chiefly the one earmarked for YMTC - ended up with decent outcomes

And my argument is that this leads to a "to big to fail" situation which is extremely risky at the provincial and local level because of the lack of fiscal fallback options for local and provincial governments in China as well as the fact that all that capital could have been better spent by provinces to uplift their population's living standards instead of essentially acting as a wealth transfer to much richer coastal provinces or the 3 provincial level cities.

Tsinghua Unigroup is not a one-off example of this risk, plenty of similar crises and failures have happened in recently in China. And Anhui is not the only Chinese province faced with this situation - almost all are (except Guangdong, as usual).

Those tens of billions Anhui has spent not just on Tsinghua Unigroup in 2022, but the dozens of other similar ventures like JAC Group, Volkswagen China, etc could have been better spent on building it's human capital. For a government that should be the primary "decent outcome".

It's a middle-of-the-pack province in China with developmental indicators comparable to Ecuador, Cuba, and Peru and well behind Thailand's poorest region (Isaan). Think about how many more cars JAC could sell, how many more electric toilets RSD Group could sell, and how much more chicken 老乡鸡 could sell if Anhui's ytd median disposable income per capita was greater than $4,100 [3], and if Anhui's rural median disposable income per capita was greater than $2,500 [4].

You can argue purchasing power all you want but more of the high value goods that a company like Tsinghua Unigroup, JAC Group, etc are producing and intending to sell are at price points that are unaffordable at that level of disposable income.

By every standard it is a misallocation of capital, and sadly a very common one across China.

[0] - https://www.policymattersohio.org/files/assets/odod-intelons...

[1] - https://www.dispatch.com/story/news/2022/07/28/chips-act-fou...

[2] - https://en.wikipedia.org/wiki/List_of_U.S._states_by_credit_...

[3] - https://www.ceicdata.com/en/china/income-per-capita/disposab...

[4] - https://www.ceicdata.com/en/china/disposable-income-per-capi...