June 18, 2008
ONE OF THE MOST IMPORTANT THINGS THAT THE CHINA OBSESSION HIDES...:
Investors Seek Asian Options to Costly China (KEITH BRADSHER, 6/18/08, NY Times)
Canon is no longer building or expanding factories in China, but the company is doubling its work force at a printer factory outside Hanoi to 8,000.Nearby, Nissan is expanding a vehicle engineering center. Hanesbrands, the underwear company based in Winston-Salem, N.C., is setting up two new factories here, as is the Texhong Textile Group from Shanghai.
China remains the most popular destination for foreign industrial investment in the world, attracting almost $83 billion last year. But a growing number of multinational corporations are pursuing a strategy that companies and analysts call “China plus one,” establishing or expanding Asian bases outside China, particularly in Vietnam.
A long list of concerns about China is feeding the trend: inflation, shortages of workers and energy, a strengthening currency, changing government policies, even the possibility of widespread civil unrest someday. But most important, wages in China are rising close to 25 percent a year in many industries, in dollar terms, and China is no longer such a bargain.
...is that the entire economic "miracle" is based on monkey-see-monkey-do and since there is no value-added the manufacturing is easily transferable to anywhere cheaper assemblers are available. Posted by Orrin Judd at June 18, 2008 8:46 AM
Ours is--we won't be able to trust the wogs to maintain the completely robotized manufacturing of the future.
Posted by: oj at June 18, 2008 2:54 PMThe value-added comes from the invisible hand - the guy on the line who figures out how to do something better. Or from the design guy (with good practical sense) who sees how to make something better. Surely a Vietnamese can do this just as well as a union guy from Michigan.
But all 'cultures' (whether the authoritarian in China or the kleptocratic at the UAW) have to get past their histories and their prejudices for innovation to occur.
Manufacturing can be robotic, but the design and testing phases (as well as the inevitable corrections/modifications) cannot be. Just look at the hurdles Boeing and Airbus have dealt with over the past few years. Much of it is political, but not all. Doing something that big means there will be a lot of little problems. The "best" manufacturers figure out how to resolve them, smartly and quickly. I suspect the US will have a corner on that for some time to come.
Posted by: ratbert at June 18, 2008 3:14 PMThey can't. That's why Japan faded too. Only we innovate.
Posted by: oj at June 18, 2008 5:23 PMoj,
The whole China "globalization" thingy is just the tip of the iceberg.
Previously emailed book recommendation, "McMafia", highlights much of the corruption indemic in today's 2nd/3rd World embrace of "Globalization". Not the least of which would be the importation of teenage prostitutes to Dubai, U.A.E. from the P.R.C
Mike
http://www.amazon.com/McMafia-Journey-Through-Criminal-Underworld/dp/1400044111/ref=pd_bbs_sr_1?ie=UTF8&s=books&qid=1213844205&sr=1-1
No nation's future is lowest wage manufacturing.
Posted by: Ibid at June 18, 2008 9:13 AM