Skip to comments.SURGE IN EXPORTS FROM CHINA HITS GLOBAL INDUSTRY (CHINA RUINING WORLD ECONOMY)
Posted on 10/13/2002 11:01:08 AM PDT by MeneMeneTekelUpharsin
Behind It: Foreign Ventures Shifting Focus, and Locals Boosted by WTO Status Price Pressure on U.S. Griddles
Price Pressure on U.S. GriddlesWhen Philips Electronics NV began prospecting for opportunities in China in the early 1980s, the Dutch company adopted the hot strategy of the time: produce and sell locally. Back then, China was thought to be a land of unlimited demand. But the same low wages that foreign companies loved because they kept production costs down also reduced the purchasing power of Chinese consumers.
What's more, Chinese knockoffs of the foreign companies' goods made competition tougher. So, many foreign-based manufacturers, with plants in place and funds committed, looked for markets abroad. Philips and a swarm of other foreign manufacturers soon learned that using China as an export base proved to be more profitable, and easier, than selling locally. Philips now operates 23 factories in China and exports nearly two-thirds of the roughly $5 billion in goods those plants produce each year.
Today, there are few things in the gobal marketplace that aren't made in China. The export drive of foreign companies' stand-alone plants, their joint ventures and China's thousands of homegrown operations has put China at the center of a broad reordering of how goods are supplied to the global economy. Companies have been forced to scrap old business strategies and come up with new ways to compete.
Many foreign manufacturers find they must either produce in China or expand their purchases from China. The country has become the world's factory floor, with output so massive and wide-ranging that it also exerts deflationary pressure world-wide on everything from textiles to TVs, mobile phones to mushrooms.
Rest on page A1 of Thursday, Oct. 10, 2002 WSJ
The article even admits that this practice is exerting "...deflationary pressure world-wide on everything from textiles to TVs, mobile phones and mushrooms." When this finally does happen, I wonder who is going to remember that China's government was responsible through bribery and collusion with other greedy leader the world over the contribute to the common man's financial ruin?
As workers lose their jobs, they will be forced to employ themselves in small manufacturing and services. This is not all bad. Our large corporations have been a larger drain on our resources than the welfare programs in dollar value.
China goods would be virtually unaffordable if the free traders had to pay for their free ride of taxpayer expenses to displaced workers (including our allies) and the need for greater militrary spending to counter growing Sino hegemonity.
Some workers will be displaced during this process, but the marketplace is the place where buyer and seller come together at some agreed price.
Thats sort of a strange attitude. All business men are for the lowest production costs, the ones who aren't don't last long, but then if you send them all to China, who will hire Americans? It sounds to me like you want to give the Chinese all our jobs.
Are you conceding that Chinese are more productive than Americans. I am not. Americans are more highly paid but we also produce more value per dollar paid than the Chinese. Don't whine about the Chinese. It's embarrassing.
The mind of so-called free traders is the triumph of shallow ideology over rationality.
When people are put out of work they don't have more money for anything. When the people who are not out of a job yet use the "more money" to buy foreign goods, it further depletes the American economy.
Right. Our refrigerators, electronic, automobiles, washers, electric motors, steel, etc. will all be made in mom and pop machine shops.
But there are still a lot of other countries that it can go to, once wages get too high in China. For example, Vietnam, Burma, India, Africa ...
"Sino hegemonity [sic]" is a joke peddled by the likes of Bill Gertz and WorldNetDaily.com.
The Chinese have a methodical plan to dominate at least their part of the world and as much of the rest as they can get away with. More than likely they have been assisting the Muslims in their attacks on us. Funny how nothing Chinese is getting hit by Al-Qaeda. Hmmmmm? Hello, great analyst. Give us YOUR analysis. Come on...let's hear it.
LOL! See my profile.
Hello, great analyst. Give us YOUR analysis. Come on...let's hear it.
Easy. One cannot prove a negative. The whole "hegemonity [sic]" argument is made by stringing together conjecture and half-truths. The Chinese have been known to protect their interests, but the idea that the PRC is able to launch an all-out attack on the US is quite absurd. A general perusal of the papers will tell you that the CCP barely has control over China. Any kind of attack on anyone else will signal the collapse of China from purely interior causes.
Scrape your shoe, pal.
That's a temporary condition and ploy. The Chinese are on a program of strategic acquisition which will make them completely independent and powerful withing ten years.
'Some' workers are displaced by the chinese, 'some' by the indonesians, 'some' by the Mexicans, 'some' by the Sri Lankans (sp), 'some' by the Brazilians, 'some' by the - well just read the labels on your products. By the time we have split the 'some' among all the countries of the world, there aren't many 'somes' left with jobs.
Now if there are no jobs, and you have no money, it doesn't matter how cheap the product is.
This is to say nothing of the absolute absurdity of a country having no manufacturing. I do not think we could even manufacture the uniforms if we had a large scale war to say nothing of the hardware needed. This is suicide.
Are the Bilderbergers and the CFR in on this too?
In the fullness of time we'll see the same product's prices slowly rise to very high market levels in the absence competition. I agree, they are on the economic Long March and plan to extend their sphere of influence to encompass all of the Pacific, at least. They are patient.
Look what happened to the Soviet Union when its government controlled the means of production. Everyone wants to earn more per hour, month, or whatever; but if everyone was paid more, each item we purchase would cost more.
The key has been to open more markets which helps more people of every country. As markets are restricted more workers worldwide are hurt.
The Chinese can be counted as a threat to world stability only as much as Britain, France, Germany or the US can be counted as a threat to world stability. Personally I think that none of the above countries poses any significant threat. Merely possessing a military does not rise to the level of world threat (unless one is a peacenik, then the very thought of a standing military is a threat). I do not assume that they could never be a threat, but I think the likelihood at this point is exceedingly small.
China indeed can create a problem for other nations, but so can we. We created a problem for Iraq by restricting it in the manner that we do. That was a good thing, and I certainly hope to create more problems for Iraq in the very near future. However, you're not saying anything by merely assuming that they can't create a problem.
From Business Week
Of course, some prices have been falling for years. That's especially true for computers, consumer electronics, and industrial goods such as steel. And price wars typically break out during recessions as vendors battle for consumers. But something new and troubling may be happening today. Excess capacity is growing around the world, particularly as products from low-wage China appear in more and more sectors. Meantime, demand in many industries is fizzling. In addition, the recent surge in productivity is encouraging the efficient to slash prices, forcing rivals to match their discounts or lose share.
A glut in goods and services is why many businesses lack the power to nudge prices higher. To be sure, many companies have cut back on capacity, shutting factories and offices and exiting markets. Yet the cuts haven't been enough, given current demand levels. Excess capacity exists in everything from telecom and aluminum smelting to banking and retail stores. And the rise of production in extremely low-cost countries, especially China, is exacerbating price pressures in an array of industries.
We can survive without Chinese goods quite well, for the present. We like paying 1/3 price for products comparable to American products. As American companies are diven out of business, we'll be dependent on foreign manufacture. Last year or this year Chinese production of industrial metal machinery equaled ours, a feat that was thought impossible 20 years ago. Our output has gone down while theirs has gone up. Please notice Bessie has closed their plant in Bethlehame. If you want steel you will shortly need to go to foreign sources to by it.
An interesting straw man and parody for clowing around, but not taken seriously in the intelligent adult world.
Are you honestly trying to tell me that the marketplace is all that is driving this. Governments, on both sides, ours and theirs are in it up to their necks. Our government made loans to businesses to open in those foreign countries, helped them in every way. That is not staying out of the process.
Our government has allowed our country to be flooded with aliens from all over the world. They have forced us to give our monies to care for them, give them low interest loans to start businesses - loans American citizens could not get. That is not government staying out of the process.
Our government has negotiated trade deals that harms the American worker while allowing other country to put restrictions on our products.
The governments are running this not the marketplace.
I have no "sources" to prove the sun will rise in the East tomorrow morning. Some things are so congruent with known reality that sources are not necessary to sane sincere people of good will.
THAT is exactly why there is such a push into "globalization". These big organizations will be eaten by smaller ones if they don't.
Competition is great, except if you are competing with me. So they make system where the big companies get favored, and thats that.
"globalization" can do good, but the breed of it they now employ should be cast off forever.
Your assumption in many cases is flat out incorrect. In many cases the product price is NOT driven down by importing from China. Its simply not.
If I can make a pair of shoes for $10 in Mexico, and I can make them for $8 in China, but I can sell either pair for $75, why chose Mexico?
I get an extra $2 bucks for chosing China, but the end price is hardly affected. The consumer doesn't benefit, or hardly care at all, but the executive pay of those on top of the totem pole will go through the roof.
Deflationary costs in pricing are not rooted in China. They are rooted in competition for marketshare, overall supply, and overall economic conditions.
LOL! Okey-dokey. The "I just know it" standard of proof is not one that is terribly credible to other people, but if you like your little fantasy, go right on ahead!
And you castigate me for engaging in straw-man arguments.
Many of the products you see are falsely priced.
There are some economic values to using China, but you certainly did not make any arguments for any of them.
The only thing going up in relation to Chinese imports is the wages of the left over company execs, that is after they have laid everyone else off.
You got it dude.
The money ends up in the hands of the brokers.
It takes a two or three step reasoning process to understand that. Don't attempt to expain it to idiots or people in denial.
What they pay is a whole different matter.
The spread between their purchase price, and ours is where they make money. These guys don't want to trim their own fat and run a real business.
Fact is, these big corporations will sink if the game is changed. Medium size businesses ($100 million in revenue+) will run the show if I am in charge.