Free Republic
Browse · Search
News/Activism
Topics · Post Article

Skip to comments.

SURGE IN EXPORTS FROM CHINA HITS GLOBAL INDUSTRY (CHINA RUINING WORLD ECONOMY)
The Wall Street Journal | 10/10/2002 | Karby Leggett and Peter Wonacott

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

When 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


TOPICS: Business/Economy; News/Current Events
KEYWORDS: china; globaleconomy; lowwagelabor; manufacturing
Navigation: use the links below to view more comments.
first previous 1-2021-4041-6061-65 next last
To: meenie
We are going to see the development of small businesses replacing the international corporations

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.

41 posted on 10/13/2002 8:53:24 PM PDT by maui_hawaii
[ Post Reply | Private Reply | To 5 | View Replies]

To: LaGrone
My question to your assertion would be if American consumers pay less for products made in China with slave labor, doesn't that leave more money in our pockets to buy more goods? I'm sorry for their workers, but it looks to me like our economy is in better shape for it.

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.

42 posted on 10/13/2002 9:03:08 PM PDT by maui_hawaii
[ Post Reply | Private Reply | To 9 | View Replies]

To: maui_hawaii
You got it. I, for one, haven't noticed decent sneakers getting cheaper since the 'Made in China' label began appearing on them. Or much else come to think of it. I have noticed that it's *impossible* to buy a stuffed animal that *isn't* made in China. Lots more besides...
43 posted on 10/13/2002 9:05:23 PM PDT by Black Agnes
[ Post Reply | Private Reply | To 42 | View Replies]

To: RLK
You have no proof, but you just know it.

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.

44 posted on 10/13/2002 9:06:24 PM PDT by Conagher
[ Post Reply | Private Reply | To 40 | View Replies]

To: LaGrone
More companies creating the same type of product equals deflationary pressure to end consumers. Everything else is rarely passed on.

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.

45 posted on 10/13/2002 9:07:44 PM PDT by maui_hawaii
[ Post Reply | Private Reply | To 9 | View Replies]

To: ComputationalComplexity
bump #25

You got it dude.

46 posted on 10/13/2002 9:11:44 PM PDT by maui_hawaii
[ Post Reply | Private Reply | To 25 | View Replies]

To: LaGrone
Some workers? I guess your not aware that our manufacturing base is collapsing. The manufacturing base that built the middle class and employed immigrints. Even our damn hand grenades are made in China. So go buy ypur cheap shoes and I hope you feel real good about it.
47 posted on 10/13/2002 9:12:39 PM PDT by cp124
[ Post Reply | Private Reply | To 9 | View Replies]

To: maui_hawaii
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.

--------------------

The money ends up in the hands of the brokers.

48 posted on 10/13/2002 9:16:23 PM PDT by RLK
[ Post Reply | Private Reply | To 42 | View Replies]

To: cp124
Some workers? I guess your not aware that our manufacturing base is collapsing. The manufacturing base that built the middle class and employed immigrints.

-----------------------------

It takes a two or three step reasoning process to understand that. Don't attempt to expain it to idiots or people in denial.

49 posted on 10/13/2002 9:19:09 PM PDT by RLK
[ Post Reply | Private Reply | To 47 | View Replies]

To: Black Agnes
Pass along pricing is a joke. You pay what they can compel you to pay and still have you be interested in buying.

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.

50 posted on 10/13/2002 9:20:41 PM PDT by maui_hawaii
[ Post Reply | Private Reply | To 43 | View Replies]

To: RLK
Ends up in the hands of someone, but certainly not the consumer.
51 posted on 10/13/2002 9:22:27 PM PDT by maui_hawaii
[ Post Reply | Private Reply | To 48 | View Replies]

To: ComputationalComplexity
You posted real wisdom in #25. Impressive.

The other east asian nations had to switich to higher and higher sophistication of their products because their small population's GDPs quickly rose with the induction of any industry.

And hence their market was born. We had production and capital contained among only 'X' number of workers, and consequently, they made more money. They also consequently purchased more goods and paid more for them.

Consequently the real</> market, ie the people you sell to experienced an outward expansion in numbers and quality of consumers.

52 posted on 10/13/2002 9:26:59 PM PDT by maui_hawaii
[ Post Reply | Private Reply | To 25 | View Replies]

To: Black Agnes
See post #52
53 posted on 10/13/2002 9:31:39 PM PDT by maui_hawaii
[ Post Reply | Private Reply | To 43 | View Replies]

To: RLK
The problem is a corporate strategy of the 1990s. Let me sum up that strategy:

How well did we do this quarter?

54 posted on 10/13/2002 9:43:07 PM PDT by maui_hawaii
[ Post Reply | Private Reply | To 51 | View Replies]

To: MeneMeneTekelUpharsin
All this and they also ignore all copyright law.
55 posted on 10/13/2002 9:51:14 PM PDT by dalebert
[ Post Reply | Private Reply | To 1 | View Replies]

To: ComputationalComplexity
In the meantime China increases what they charge companies for manufacturing their product and do knock offs to undersell all their customers. China is putting the screws to everyone they do bussiness with.
56 posted on 10/13/2002 9:56:48 PM PDT by dalebert
[ Post Reply | Private Reply | To 25 | View Replies]

To: maui_hawaii
Consequently the real market, ie the people you sell to experienced an outward expansion in numbers and quality of consumers.

The real concern at this point is that China may in fact develop into some kind of a closed system where the wages are low, but all the prices of consumer goods are equivalently low. What I mean is that they may internalize their domestic market(Produce everything they consume at rock bottom prices) If thats the case then that country has the potential to bleed the entire world dry of industrial infrasture and still maintain rigorous growth due to its own domestic consumption. It means that even if we are too poor to buy their super cheap goods, the day may come, when their own people are rich enough to afford all the stuff they can make, when that day comes, they will no longer need us as consumers. I expect WWIII by then.

57 posted on 10/13/2002 10:12:59 PM PDT by ComputationalComplexity
[ Post Reply | Private Reply | To 52 | View Replies]

To: ComputationalComplexity
You are on the right road. We are on the same page.

China may in fact develop into some kind of a closed system where the wages are low, but all the prices of consumer goods are equivalently low. What I mean is that they may internalize their domestic market(Produce everything they consume at rock bottom prices) If thats the case then that country has the potential to bleed the entire world dry of industrial infrasture

58 posted on 10/13/2002 10:29:47 PM PDT by maui_hawaii
[ Post Reply | Private Reply | To 57 | View Replies]

To: cp124
I should have the widest choice possible in which shoes I buy for me or my family, same as you. If you choose to buy American shoes fine, but if I buy shoes made in China or Mexico, that is my choice and my business. Your same arguments were made about autos years ago. It was a wrong argument then and it is wrong now.
59 posted on 10/14/2002 8:26:56 AM PDT by LaGrone
[ Post Reply | Private Reply | To 47 | View Replies]

To: LaGrone
ok fine...Don't complain when your tax rates hit 80% and umemployment is at 30% to pad some CEO's pocket. When we go to war it will be hard to buy our arms from the enemy. NAFTA has become SHAFTA.
60 posted on 10/14/2002 9:08:56 AM PDT by cp124
[ Post Reply | Private Reply | To 59 | View Replies]


Navigation: use the links below to view more comments.
first previous 1-2021-4041-6061-65 next last

Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.

Free Republic
Browse · Search
News/Activism
Topics · Post Article

FreeRepublic, LLC, PO BOX 9771, FRESNO, CA 93794
FreeRepublic.com is powered by software copyright 2000-2008 John Robinson