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 ...
Define cheap labor for me? What's the trigger point at which labor rates alone cause you to leave America?
Also, what is lax regulation?
Lol, I guess when a US firm can export jobs to labor that is less than 10%, or even 5% of what was being paid in the US, then that can be defined as cheap labor, very cheap labor. And those reductions were realized in China for years, and can be realized in Vietnam and Cambodia and other poor nations.
The working conditions in China's state owned industries definitely qualify as lax regulations.
But this is a waste of time and you seem to know next to nothing about international labor conditions, so why are you even wasting time in this thread?
No interest in continuing this pointless exchange. And you should ask others on here about lax regulation. Many believe that unreasonable regulation in the US is the main, if not the only reason jobs are exported.
Here’s an article that will help you learn about cheap labor. The minimum wage in China was recently increased - to almost $200.00 per month. Looks like pay is closer to $210.00 or so in Shanghai. I know it was around $160 a few years back.
http://www.straitstimes.com/BreakingNews/Asia/Story/STIStory_535474.html
Would you agree that that is cheap labor???
But these unreasonable wage demands in China have already begun to move some plants to Vietnam, Cambodia and other places where pay is more reasonable. China is no longer the rock bottom cheapest.
Google: “China minimum wage” to become even better informed.
These Wiki figures look pretty accurate:
http://en.wikipedia.org/wiki/List_of_minimum_wages_by_country
Have you shared your stunning observation with the EPA? In your expert opinion, large operations do not create dust?
Because many manufacturing facilities have paved driveways, dontcha' know.
Direct your inane nonsense elsewhere.
Just admit you don’t know what the hell you are talking about, and all will be fine.
Leave poor Will alone. He still thinks an increased trade deficit leads to an increased budget deficit.
Protectionists find regulation does not cost jobs
EPA regulations concerning dust 'just paper,' have no effect on long-term growthWASHINGTON, D.C.--Citing an internet study that claims manufacturers have paved driveways, advocates of higher wages for workers today claimed . . . .
Lol, you are the last person on FR to tell anyone they don't know what they are talking about. And I see your tag team buddy, and your number one competitor as the most clueless poster on FR, has showed up to help you out - as usual.
Strange how that happens.
Maybe you'd like to again regal the readers at FR with your understanding of the causes of the Great Depression. Tell us all about Smoot-Hawley and ignore the Fed policies that reduced the money supply by 30%.
Carry on, boys.
Still think an increased trade deficit leads to an increased budget deficit? Still unable to explain how?
I mean specifically what is cheap labor? You were a controller for companies with employees, no?
At what price point was it worth it to go outside the country for labor?
No company I worked for moved overseas. And there is no exact answer to your question, but many textile plants and sewing plants that paid $8.00 per hour, or less, left the US for cheap labor in Mexico and Asia. Very little left of the textile industry in the US. Those moves happened mostly in the '80s and '90s, at least in areas I'm familiar with. - It's not just companies with expensive union labor that have moved, far from it.
And I know the wages in China ten or so years ago were around $.50 per hour and less. Even cheaper when the first US plants began moving there. And there is still plenty of labor around the world available for less than $1.00 per hour.
Strange to you, maybe. I just happen to be a big fan of poking people who say moronic things on the internet. Like, responding (to an observation that we are over-regulating ourselves by regulating dust) that people have paved driveways. I mean, how stupid is that?
By way of example, the last manufacturer I worked for had about 30 acres of gravel down. We generated lots of dust moving things around.
One more thing: I’ve never been able to find an accurate number regarding our textile industry, in billions of dollars. Do you have one?
Your problem is you don't respond to what people actually say. I said that municipalities often leave their industrial parks with no layout and no paved roads until the first firm builds in the park. Then they lay out the first roads and pave them. I also said I'd never seen an industrial park on (alongside) an unpaved road.
None of that had anything to do with that EPA regulation you mentioned, and I said nothing to disagree with the point you made. Your point just had nothing to do with anything I said. The moronic things you see on the internet and love to respond to are your own moronic misinterpretations of what others say.
Do you mean an accurate number for the textile production that is still in the US? Or maybe some history over a few decades?
I don't have any numbers but they could probably be found. I could provide you with a list of ten or more plants that once operated near me, but longer do. Either moved overseas or just went out of business.
Many US firms never wanted to leave the US, but cheap imports gradually forced many of them to seek lower costs.
So much of our trade policy has been politically motivated, not economically motivated. But the huge access to the US market given to Japan (with next to nothing in return) set all sorts of dislocations and corporate strategies in motion that no one actually wanted during the 1950s and '60s.
The Eisenhower administration and the demise of GATT: dancing with Pandora
The primary international concern of top officials in the Eisenhower administration was to counteract the spread of communism, especially in Europe and the Far East. Both Eisenhower and his Secretary of State, John Foster Dulles, viewed the expansion of international trade as a vital tool for integrating non-communist countries with the United States and also strengthening the war-torn economies in Europe and Asia. For these reasons, the United States was a major force behind the promotion of GATT and Japan's inclusion in the agreement.
The domestic US economy and the standard of living of particularly lower skilled workers in the US has seldom been a top priority (but we do send the lower skilled a few hundred billion annually in government programs as, in reality, low wage subsidies).
But that long article is fairly interesting history to scan through.
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