Posted on 04/29/2007 11:06:18 PM PDT by steelboy
The American dream, Made in China China's rise has cost South Carolina jobs but it's also saving consumers money
Employees of lighting manufacturer Quoizel, located in Shenzhen, China, work in the plant’s painting area. The company's headquarters are located in Goose Creek. BY TONY BARTELME
China will be the “dominant” economic power by 2050? Yet another journalist I’ll be writing.
I since another Wal Mart bahing thread.
These are fun to read.
Most people have no idea how extensive this is. Here is a link to products made in China: http://www.alibaba.com
It is almost limitless what they manufacture...
Quoizel's move to China is a good one. There's no way it could have survived otherwise. *Furniture manufacturers*, who produce a low value-to-weight product (meaning freight costs are high relative to product price), compared to lighting, are getting creamed by Chinese-based competition. Margins are getting sliced to zero and below that. If you can't beat 'em, join 'em. At least the headquarters will stay stateside. If they don't move their plants, Chinese companies will take over the lighting business. Like it or not, low labor costs matter in labor-intensive businesses.
It’s definitely a good piece from most respects, however publishing not one but two ChinaHype comments in it is depressing.
But yes, I’m not sure why so many people who continue to complain about companies moving manufacturing to China don’t understand what will happen to companies who do _not_ make moves to meet their competitors.
He's quoting an American manager at the Chinese plant. I see where he's coming from. In 92, Shenzhen was a fishing village. It is today a modern city. The problem is linear extrapolation. It's easy to go from making 20 bucks a month to 100 bucks a month. It's not as easy move from 100 bucks to 500 bucks. Once they hit 200 bucks, there are a lot of places that have cheaper labor available. Hong Kong is a First World city because it has relatively few impediments to foreign investment. Shenzhen is a completely different story - it is a successful in spite of government impediments because of its cheap labor. When the cheap labor goes away, the foreign investment leaves with it. Unless China's government removes those impediments.
“He’s quoting an American manager at the Chinese plant”
Actually, the plant manager quote is at the end of the piece, and that guy (the company president) says 20 years. The journalist cites “experts.” I’m not a China doom-and-gloom type. I’m very pragmatic about the country’s economic prospects. But this sort of ill-informed stuff is rapidly becoming conventional wisdom (unquestioned) ... and it’s depressing.
I also believe it’s this sort of unquestioning attitude that has allowed China to grow as it has in the first place, and to build the sort of cushion that will let it, at this point, weather virtually any economic storm — simply because people “believe”. The money believes, and when the money believes it will continue to flow against all logic. Sure, it creates imbalances, but at this point China would have to suffer some truly catastrophic economic events over a long period of time to be derailed (far more than the “social fracturing” many continue to tout), and a lot of the reason is that the money believes.
Actually, I think foreign investment in China has been spurred mainly by cheap labor, accompanied by cheap land and relatively low levels of government regulation and corruption (compared to countries with similar labor costs). Domestic investment has been spurred by the denationalization of many enterprises, the removal of domestic trade barriers among provinces, the creation of stock exchanges, the dismantling of moribund state enterprises and a host of other Chinese initiatives. The reality is that a move towards a freer economy has brought about many improvements that would have happened whether or not the world opened its markets to Chinese products (thus spurring foreign investment in China for re-export to their home countries). The problem with Chinese economy (and with all other dirt-poor economies) has always been excessive state intervention in aspects that are not conducive to economic development, whether this is due to corruption or ideological principle. China still has a lot of excessive corruption and regulation.
What the Chinese example has shown is that even a little economic reform goes a long way. The problem with a lot of undeveloped countries is that despite not being Communist, they are much more ideological about trade and foreign investment than China. How is that? Maybe the Chinese leadership learned* something from the ideological excesses that characterized the first three decades of Communist rule - excesses that resulted in tens of millions of deaths.
* Talk to ordinary Chinese, and the answer is a little different. There's some mumbo jumbo about how China's 5000-year (sic) recorded history is evidence of the superiority of the Chinese race, meaning that its recent ascent is the result of superior blood lines rather than any changes in economic thinking imported from the West.
Actually, Vietnam, Cambodia, Laos, the Philippines, Indonesia, Bangladesh, Pakistan, India will all become competitive in the light manufacturing business once Chinese wages hit 200 bucks a month. Like I said, it was easy for China to get from 20 bucks to 100 bucks a month. The road from 100 bucks to 500 bucks a month will be much rockier. This is why the linear extrapolation of China's recent growth rates is a mistake.
Very extensive. I found Bayberry candles.
Not if they keep on killing Rex and Jinx.
> When the cheap labor goes away, the foreign investment leaves with it.
China has more absolutely poor people than the combined populations of the USA and European Union.
What you failed to realize is, there is only probably 20% of cheap labors in China are on their way from 100 bucks to 200. They are alreay where they are rightnow while the rest 80% is still largely untapped. If majority of their labors making 200 bucks a month...it’s pretty scary even without going further.
Certainly. As does India. But most of them are unemployable. Because if they were employable, wages in China would be lower than they already are. The quality of some products we get from China is lamentable. But the sad reality is that we are getting them made by the cream of the crop.
I have to disagree that they are untapped. It doesn't cost a fortune for the rest to relocate to the coast, where most of the manufacturing is set up (for reasons of transportation cost). The fact is that a lot of these people are unemployable. Think about how many low quality products we get from the present coastal labor force, who are the cream of the crop. I don't want to know how low the dregs of China's labor force can sink in terms of quality control. I doubt the average factory owners wants to know, either, when there are cheaper alternatives right next door to China.
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