China's Economic Cold War on the United States

Kunal Biswas

Member of the Year 2011
Ambassador
Joined
May 26, 2010
Messages
31,122
Likes
41,042
The one use abusive language first lose the argument first..

Be nice to your fellow forum member they will be nice to you, we dont appreciate such language..
 

Armand2REP

CHINI EXPERT
Senior Member
Joined
Dec 17, 2009
Messages
13,811
Likes
6,734
Country flag
lol are you one of those guys think everything will be replace by robots.
currently almost all consumer electronic are manufacture in china, thats a fact. now no one can predict future so if you believe all the stuff are shift to other country thats your opinion. even if some shift occur its miniscule compare to current china manufacture capability. currently china is one of the biggest market for many US/european products. you can predict all you want, people saying same doom/gloom stuff for years now, but the manufacture is still there in china. its not just about cheap labor as i indicate before. if you look at china car exports, don't look at europe/US, but look at country such as russia, s.america, africa, asia etc. the fact is unless there some major thing happen, china economy is not gonna fail like many doom/gloom forum member predict. if it fail it will have effect in global economy, anyone with a brain knows global economy will be affect when 2nd largest economy slow down. in fact we already seen price drop in resource such as iron ore etc due to china slow down this year.

you need take some economy class before saying the only thing it would affect US is for quarters. if you have pension, look at what your pension are invest in. and if you think anyone can find countries with manufacture capabilities of china in few quarter, establish supply chain and other stuff, well:tsk:

Why Apple Has to Manufacture in China - Karan Girotra and Serguei Netessine - Harvard Business Review


Apple, America and a Squeezed Middle Class - NYTimes.com

That is really cute. Your dreams are so precious even a young girl would be amased at that imagination. :laugh:

The fact is even your beloved Foxconn is not following your dictated model. The CEO said Chinese employees are like "cattle" and easily replaced. Move in a million robots and there is no one to commit suicide. They plan on having better results in Indonesia where labour is cheap and don't complain. American electronic companies don't care where their products are made as long as they keep margins, don't have labour scandals and riots all the time. It is getting too expensive to do business in the PRC with tax increases, exorbitant labour costs, strikes, scandals and loss of subsidies. It isn't even safe for Japanese to walk the streets much less make electronics. It is really becoming an unfriendly place to do business.

What do you know about macro-economics? You completely ignore Foxconn spending $10 billion to make Apple gear in Indonesia. :rolleyes:
 

s002wjh

Senior Member
Joined
Jul 9, 2009
Messages
1,271
Likes
153
Country flag
That is really cute. Your dreams are so precious even a young girl would be amased at that imagination. :laugh:

The fact is even your beloved Foxconn is not following your dictated model. The CEO said Chinese employees are like "cattle" and easily replaced. Move in a million robots and there is no one to commit suicide. They plan on having better results in Indonesia where labour is cheap and don't complain. American electronic companies don't care where their products are made as long as they keep margins, don't have labour scandals and riots all the time. It is getting too expensive to do business in the PRC with tax increases, exorbitant labour costs, strikes, scandals and loss of subsidies. It isn't even safe for Japanese to walk the streets much less make electronics. It is really becoming an unfriendly place to do business.

What do you know about macro-economics? You completely ignore Foxconn spending $10 billion to make Apple gear in Indonesia. :rolleyes:
well lets look at the fact here.

Foreign Trade - U.S. Trade with China china import from US 2011 $103,939Million.

right now you only focus on some minor shift from china to other country, mostly low tech stuff such as textile etc. if you read teh article i post, why so many company keep manufacture in china its not just about cheap labor, but you insist its about low cost labor. go back read the article i post, and let me know if you gonna continue insist its about cheap labor. if its cheap labor than those manufacture already shift all the productions to vietnam/india, but so far only some the labor intensive low-tech manufacture shift to SE asia, even those are miniscale compare to overall manfuacture in china

then there is the imports from china, china is one of the biggest market for pretty much any products. No company is gonna ignore 300-400 million middle class. the fact is china export alot all over the place, but also import alot too.

rather than looking at the overall china export/import statistic, you looking at individual examples where manufacture outsource job from china to elsewhere, but not examples on many company move into china every year. so basically when you look at china ecnomic development you only concentrate on examples that has negative impact on china economy rather than looking at examples where company move in/invest into china or the overall statistic of china. or how the supply chain, skillset of the employees, infrastructure, government subsidized etc etc make certain company move to china.

with raising wage/income it also mean the middle class will buy more stuff. even though US outsource most manufacture jobs to asia/elsewhere, it still is one of the biggest market for any company because we have decent income for middleclass.

china is already selling its own brand to developing country and developed country(depend on products, less volume), its a transition where they start from low-end type manufacture(1), to mid-high tech type manufacture(2), to own brands of low-mid range products for export(3). and they are around 2/3. the day when they start making decent products and outsource of mid-high tech jobs from US(not manufacture), its day ill be worried. right now they are simply go through a transition from developing world to a developed world. we seen it happen in s.korea, japan and other countries, there is no reason to doubt china won't turn into something similar, especially when they concentrate on economy. that been said, they do have alot internal issues that can hinder its development, but it has to do with politic, corruption etc, not cheap labor.
 

s002wjh

Senior Member
Joined
Jul 9, 2009
Messages
1,271
Likes
153
Country flag
Manufacturing: The end of cheap China | The Economist

"......Brian Noll of PPC, which makes connectors for televisions, says his firm seriously considered moving its operations to Vietnam. Labour was cheaper there, but Vietnam lacked reliable suppliers of services such as nickel plating, heat treatment and special stamping. In the end, PPC decided not to leave China. Instead, it is automating more processes in its factory near Shanghai, replacing some (but not all) workers with machines.

Labour costs are often 30% lower in countries other than China, says John Rice, GE's vice chairman, but this is typically more than offset by other problems, especially the lack of a reliable supply chain. GE did open a new plant in Vietnam to make wind turbines, but Mr Rice insists that talent was the lure, not cheap labour. Thanks to a big government shipyard nearby, his plant was able to hire world-class welders. Except in commodity businesses, "competence will always trump cost," he says.

Sunil Gidumal, a Hong Kong-based entrepreneur, makes tin boxes that Harrods, Marks & Spencer and other retailers use to hold biscuits. Wages, which make up a third of his costs, have doubled in the past four years at his factories in Guangdong. Workers in Sri Lanka are 35-40% cheaper, he says, but he finds them less efficient. So he is keeping a smaller factory in China to serve America and China's domestic market. Only the tins bound for Europe are made in Sri Lanka, since shipping costs are lower than from China.

Louis Kuijs of the Fung Global Institute, a think-tank, observes that some low-tech, labour-intensive industries, such as T-shirts and cheap trainers, have already left China. And some firms are employing a "China + 1" strategy, opening just one factory in another country to test the waters and provide a back-up.

But coastal China has enduring strengths, despite soaring costs. First, it is close to the booming Chinese domestic market. This is a huge advantage. No other country has so many newly pecunious consumers clamouring for stuff.

Second, Chinese wages may be rising fast, but so is Chinese productivity. The precise numbers are disputed, but the trend is not. Chinese workers are paid more because they are producing more.

Third, China is huge. Its labour pool is large and flexible enough to accommodate seasonal industries that make Christmas lights or toys, says Ivo Naumann of AlixPartners. In response to sudden demand, a Chinese factory making iPhones was able to rouse 8,000 workers from their dormitory and put them on the assembly line at midnight, according to the New York Times. Not the next day. Midnight. Nowhere else are such feats feasible.

Fourth, China's supply chain is sophisticated and supple. Professor Zheng Yusheng of the Cheung Kong Graduate School of Business argues that the right way to measure manufacturing competitiveness is not by comparing labour costs alone, but by comparing entire supply chains. Even if labour costs are a quarter of those in China to make a given product, the unreliability or unavailability of many components may make it uneconomic to make things elsewhere.

Dwight Nordstrom of Pacific Resources International, a manufacturing consultancy, reckons China's supply chain for electronics manufacturers is so good that "there is no stopping the juggernaut" for at least ten to 20 years. This same advantage applies to low-tech industries, too. Paul Stocker of Topline, a shoe exporter with dozens of contract plants in coastal China, says there is no easy alternative to China.

It is fashionable to predict that China's inland factories will supplant its coastal ones. Official figures for foreign direct investment support this view: some inland provinces, such as Chongqing, now attract almost as much foreign money as Shanghai. The reason why fewer migrant workers from the hinterland are returning to coastal factories this year is that there are plenty of jobs closer to home.

But manufacturers are not simply shifting inland in search of cheap labour. For one thing, it is not much cheaper. Huawei, a large Chinese telecoms firm, reports that salaries for engineers with a master's degree are not even 10% lower in its inland locations than in Shenzhen. Kolcraft considered shifting to Hubei, but found that total costs would end up being only 5-10% lower than on the coast.

Topline looked into moving inland, but found huge extra costs there. Infrastructure for exports is still shoddy or slow (shipping by river adds a week), logistics are not fully developed and Topline's entire supply chain remains on the coast. It decided to stay put.

........"
 

Armand2REP

CHINI EXPERT
Senior Member
Joined
Dec 17, 2009
Messages
13,811
Likes
6,734
Country flag
Some small shift? Your prime example is Apple whose supplier is Foxconn. They are replacing Chinese workers with a million robots and making $10 billion worth of supply chains for Apple products in Indonesia. Alone I call that a substantial shift and with the rest of the world moving production back home or to other developing countries, China has nowhere to go but down. Throw in tariffs from the US on Chinese manufactured electronics and it would collapse overnight.
 

s002wjh

Senior Member
Joined
Jul 9, 2009
Messages
1,271
Likes
153
Country flag
Some small shift? Your prime example is Apple whose supplier is Foxconn. They are replacing Chinese workers with a million robots and making $10 billion worth of supply chains for Apple products in Indonesia. Alone I call that a substantial shift and with the rest of the world moving production back home or to other developing countries, China has nowhere to go but down. Throw in tariffs from the US on Chinese manufactured electronics and it would collapse overnight.
right is that your argument robots? 10billion over next 10 years, and its basically foxconn test the water on how feasible to shift some jobs to other countries. foxconn already has manufacture in several place, but its major operation is still in china, and it has minimum affect on china. if you read the article I posted, wage increase there meaning more consumer spending, china is moving away from low-tech labor, its a transition from low to mid-high manufacture and making its own stuff. if you believe US will throw tariff on ALL chinese goods or a trade war between 2 biggest economy without suffer any damage, well take some economy 101. anyway i'm done with this arguement, i provide several sources on this subject, but obvious you didn't read it. if you belief raising cost of labors in china will end china economy now, thats your opinion. seem like many economist don't share your view though.
 

no smoking

Senior Member
Joined
Aug 14, 2009
Messages
5,000
Likes
2,302
Country flag
Labor is a comodity , like oil, wheat, lumber it sells best where its cheapest, with technology what matters is who invents and designs it.
Yes, that is correct only if you already have that level of technology! When your average technology level is 15-20 years behind the pioneer, talking about invents and designs is like a primary school student discusses about university course.

When it comes to science China is pretty backward, China has never even been awarded a nobel prize for science.
Backward? Yes!
This can be said with any developing country including india!
For these countries, putting effort in catching up on mature production technology means a lot more than generating a couple of nobel prizes!
 

Global Defence

New threads

Articles

Top