SURGE IN EXPORTS FROM CHINA HITS GLOBAL INDUSTRY (CHINA RUINING WORLD ECONOMY)

The Wall Street Journal | 10/10/2002 | Karby Leggett and Peter Wonacott

[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

[MeneMeneTekelUpharsin]

First, I have a hard time believing that the companies establishing manufacturing operations in China were not aware that the local populace could not afford their goods. That can NOT be true. Next, I have said before and will say one last time that China is pushing the world toward economic ruin by producing goods with virtual slave labor and putting those goods into the markets of other countries. The governments allowing this to happen are complicit in the ruin of the workers of their countries.

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?

[XBob]

Amazing - some of the idiots finally figured it out. We need to send all those who are for the lowest production costs at any price to live in China at chinese wages.

[spycatcher]

China dream alive and kicking (economy ripe for collapse)

[oct11]

When will these free traders realize that China is a mercantilist country that considers trade policy an extension of military policy?

The bottom line is the Chinese would gladly use trade policy to destabilize and collapse the economies of their perceived international enemies, specifically the U.S.

[meenie]

Carry this a little further and develop a depression in the US which is possible and our market dries up. The demand for Chinese goods go down and the Chinese plus our friends in Europe find our market is sour. We are going to see the development of small businesses replacing the international corporations and our import goods.

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.

[Blake#1]

Excuse me! Take off your blinders. I have personal contact with Entrepreneur-Capitalist in China. They are both American citizens. They live in China and sell all over the world. They are taxed at a more reasonable rate than in the USofA. Their products are those known to every American. They have freedom to sell or make deals that has not existed in the UsofA since the American Revolution. That is the time when the British government left the Colonies and there was no state or national governments.<>

The Good Ole-USofA is full of American haters that are out to destroy our "SYSTEM". The actor Tim Robbins was just on my TV saying he would never do anything to protect American Capitalism or American Businessmen. You don't have this in China. Which "SYSTEM" will survive?????

[Vigilanteman]

You've all got it right. We ought to have a tax on imports from hostile countries equal to their risk of using the wealth gained therefrom against the military or economic interests of this country minus whatever they buy from us.

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.

[cynicom]

One has only to look at Japan. Deflation at its best.

[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.

Some workers will be displaced during this process, but the marketplace is the place where buyer and seller come together at some agreed price.

[Red Jones]

bump

[ChiMark]

Free trade works well with China. The theory being that free markets require aq free populace. But China is not the west. I don't believe by encouraging free markets in China will necessarily change the political position of their leaders. The Chinese are capable of producing without the need for personal autonomy. Very different from the European communist societies.

[monday]

"We need to send all those who are for the lowest production costs at any price to live in China at chinese wages."

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.

[RLK]

When will these free traders realize that China is a mercantilist country that considers trade policy an extension of military policy?

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

The mind of so-called free traders is the triumph of shallow ideology over rationality.

[RLK]

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?

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

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.

[RLK]

We are going to see the development of small businesses replacing the international corporations and our import goods.

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

Right. Our refrigerators, electronic, automobiles, washers, electric motors, steel, etc. will all be made in mom and pop machine shops.

[Lessismore]

Just after WW II manufacturing shifted towards Japan. Then it shifted towards the "Asian Tiger" economies from South Korea to Singapore. Now it has shifted to China.

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 ...

[MeneMeneTekelUpharsin]

Thanks for the link.

Mene

[Conagher]

Absurd. What is your definition of "hostile"? Explain to me how China is hostile, other than the typical retort that they are audacious enough to have a military.

"Sino hegemonity [sic]" is a joke peddled by the likes of Bill Gertz and WorldNetDaily.com.

[Conagher]

Why would China want the US to fall? Isn't it us who buy all of their goods? Aren't we supposedly the source of all of their technology and education?

Oops!