Posted on 11/16/2010 3:59:14 AM PST by Palter
Since the end of the Cold War, the world's powers have generally agreed on the wisdom of letting market competition—more than government planning—shape economic outcomes. China's national economic strategy is disrupting that consensus, and a look at the ascent of solar-energy magnate Zhu Gongshan explains why.
A shortage of polycrystalline silicon—the main raw material for solar panels—was threatening China's burgeoning solar-energy industry in 2007. Polysilicon prices soared, hitting $450 a kilogram in 2008, up tenfold in a year. Foreign companies dominated production and were passing those high costs onto China.
Beijing's response was swift: development of domestic polysilicon supplies was declared a national priority. Money poured in to manufacturers from state-owned companies and banks; local governments expedited approvals for new plants.
In the West, polysilicon plants take years to build, requiring lengthy approvals. Mr. Zhu, an entrepreneur who raised $1 billion for a plant, started production within 15 months. In just a few years, he created one of the world's biggest polysilicon makers, GCL-Poly Energy Holding Ltd. China's sovereign-wealth fund bought 20% of GCL-Poly for $710 million. Today, China makes about a quarter of the world's polysilicon and controls roughly half the global market for finished solar-power equipment.
Western anger with China has focused on Beijing's cheap-currency policy; President Obama blasted the practice at the G-20 summit in Seoul last weekend. Mr. Zhu's sprint to the top points to a deeper issue: China's national economic strategy is detailed and multifaceted, and it is challenging the U.S. and other powers on a number of fronts.
Central to China's approach are policies that champion state-owned firms and other so-called national champions, seek aggressively to obtain advanced technology, and manage its exchange rate to benefit exporters.
(Excerpt) Read more at online.wsj.com ...
We focus on currency because the Dems can "sell" it to their economically illiterate voters. In reality, our politicians (of both parties) don't have the balls to do what will actually work.
face it, the real reason he are starting to fall behind in so many areas is because the government and the environmental nazi’s wont let us build anything.
In the West, polysilicon plants take years to build, requiring lengthy approvals. Mr. Zhu, an entrepreneur who raised $1 billion for a plant, started production within 15 months.
That's started production, not built his plant.
China's national economic strategy is detailed and multifaceted, and it is challenging the U.S. and other powers on a number of fronts.
China's policy seems to be let's do it, let's build.
Ours is BANANAs - Build Absolutely Nothing Anywhere Near Anything
The Vitamin C story is very instructive:
And, of course, prices began to rise after China captured most of the market for Vitamin C. And US enablers still require no country of origin information on vitamins, something many Americans would prefer to have.
Obama closed gitmo, ended the fighting in Iraq, made healthcare free...
and our elites envy them so much you can see the tips of their hair turning green...imagine being able to push a button and get the economy/society to do whatever you want it to do?
you can expect to wait 5-6 years to start production in my little corner of Florida. You will also need several permits from several different agencies. The worst - St. John’s River water management district legally has 30 days to review your app - i think it’s 30, it may be 90 - and if they find one little thing wrong with it, they will reject it and you will need to resubmit and then the clock starts over. The project we just finished had 3 such go-arounds with those fatcat bureaucrats...and it miraculously took the full maximum legally permitted amount of time each time they reviewed the permit app...
But what is the more common situation in the US: companies which want to built new plants in the US, but can't because of government delays. Or companies that have shut down existing plants and moved production to cheap labor nations with lax regulations?
I know of many empty plants within miles of where I live. Haven't heard of any new plants which can't be built because of government delays.
See this post: http://www.freerepublic.com/focus/news/2627848/posts?page=27#27
Call your chamber of commerce and ask them.
It isn’t low pricing, but taxes, lawsuits and bureaucracies driving businesses overseas.
Call any developer and ask them about zoning.
Call any general contractor or tradesman and ask them about licensing and permitting.
If I understand this correctly, China floats their currency so it makes the Yuan stronger and their exports more expensive. Wouldn't that then lower the cost of inputs into their economy? Since China's inputs and exports, at least the last time I checked, are about equal, how does this do anything the politicians say it will?
The only thing here that’s consistent is that politicians are spewing nonsense and moron’s are screaming “ain’t it awful”. Our job is to keep the positions and their morons from reaching into our pockets.
It’s easy to see that many prefer to attribute the movement of production to cheap labor nations to everything but cheap labor. But this move has been going on since the 1950s before there were any environmental laws to speak of, and there was no EPA. When a firm can cut its labor cost to less than 5% of what it is in the US, then export back to the US with little or no tariff, the savings are immense for any operation with significant labor costs. The removal of tariffs is the major factor in all of this.
I don’t have to call a Chamber of Commerce. Stories of potential new plants become news as soon as a recruitment prospect is identified. Again, the story is all the existing plants standing empty, not all the new plants which can’t be built due to red tape.
And all those things you mention, businesses must still deal with at the warehouse, distribution and retail level. Producing overseas does not eliminate product liability law suits.
Lol, and you are another who insists that other commenters prove your assertions for you. Why don’t you provide specific examples of all the plants you claim cannot be built due to red tape.
You don't have to prove my assertions, just your own.
So far you've established your ignorance on zoning, building, environmental and regulatory law in America.
Why not double down? Opinion's as good as fact.
The US profiteers (nobody does anything for any other reason at that level) don’t want profits impacted by the knowledge that you might be taking China’s latest poison Trojan Horse.
You've proved your ignorance of the history of the loss of US manufacturing jobs and the more recent trend of outsourcing skilled jobs. As I said, the movement of US manufacturing to cheap labor nations preceded the EPA and most of the other more restrictive laws brought about by extreme environmentalists.
Learn something about US/Japan trade in the 1950s and 1960s. Learn something about the Maquiladora program started in the 1960s. That's when the big moves to cheap labor started, well before the EPA. The movement of jobs to cheap labor exactly follows the removal of import tariffs, as with Japan fifty years ago, and as with the Maquiladoras before NAFTA, and after,(also had to reduce tariffs into Mexico in the 1960s, IF the materials were to be reprocessed and exported back to the US).
Like so many on here, you seem to have only begun noting US trade policies very recently. It's a post WWII story, at least, not a story of the past couple of decades.
And I will add, and conclude with this. You are greatly exaggerating the negative impact of zoning, environmental and regulatory law as factors in why new industries do not locate in the US.
Every town of any size has an industrial park with land zoned and set aside for new construction of industrial concerns. Mayors and governors travel around the US and the world to lure new industry, offering lavish tax and other incentives that often last twenty or more years. The recruitment by southern states of new auto assembly plants is famous for the incentives offered.
There are ridiculous restrictions on new coal or nuclear plants, and a few other industries, but the welcome mat and the incentives and the zoned property is ready and waiting for a large variety of new industries, throughout the US. And many just don’t want to acknowledge the continuing huge factor that cheap labor still is, and always has been, in the decisions to export and outsource US jobs.
No it isn't. The hunt for cheap labor is the story of the history of the world. For America it began before the Revolution.
Cheap labor isn't the problem with America.
How many businesses have you opened and run?
Just make sure you don't use a gravel road for access!
Most industrial parks I've noticed are built on paved roads, and the municipalities tend to lay out the interior roads and pave them once the first new industry builds in the park. I don't think a park would attract many industries if they planned to rely on dirt or gravel roads for access.
Like so many on here, you seem to have only begun noting US trade policies very recently. It's a post WWII story, at least, not a story of the past couple of decades.
What you chose to bring forward and take out of context:
It's a post WWII story...
And we are clearly discussing US trade policy (including the trade of US jobs for cheap labor and lax regulation) and how the search for cheap labor has influenced that, not the entire world history of the search for labor.
Cheap labor is the major factor that has caused the export of US jobs and the outsourcing of US jobs, beginning in the 1950s.
I've been the controller and on the management team of three different companies in very competitive industries, two in manufacturing.
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