American Economics Thread

Anlsvrthng

Captain
Registered Member
Cautionary tale: lack of competition AND complacency bring ruination:



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I see it on a daily basis.

The companies choose to ship the procution to "low cost countr " as an easy and simle solution to stay competitive.

And usually the move from say UK to China doesn't means that the manufacturing process will be more efficient, but usually it will be less efficient will use more resources like before.

Exampel the highest quality requirements of one UK business had from the Chinese customer, simply because they had 100% incomming inspection over there ,using up a lot of workforce.
In germany they haven't had the money for that.


So, sadly the current international framework doesn't support the efficiency improvement of the businesses, it supports the cheap, "make your product for a bowl of rice" organisation methods.
 

Hendrik_2000

Lieutenant General
I see it on a daily basis.

The companies choose to ship the procution to "low cost countr " as an easy and simle solution to stay competitive.

And usually the move from say UK to China doesn't means that the manufacturing process will be more efficient, but usually it will be less efficient will use more resources like before.

Exampel the highest quality requirements of one UK business had from the Chinese customer, simply because they had 100% incomming inspection over there ,using up a lot of workforce.
In germany they haven't had the money for that.


So, sadly the current international framework doesn't support the efficiency improvement of the businesses, it supports the cheap, "make your product for a bowl of rice" organisation methods.

Can you read an article ? Boy you need reading comprehension classes . The article has nothing to do with outsourcing I show why the US is uncompetitive not because of out sourcing but because of lack of vision and refusal to spend money in investing into up to date technology. Because dong so will depress quarterly result temporarilty that is no no by the wall street standard

That is basically what is wrong with American industry they are so short sighted and don't want to see further than quarterly result
I believe it has to do with how the management are rewarded . They don't care about the long term health of the complay all they care is bonuses and option that they get if they get rave review from wall street . Long term planning is not in the card
As well nowadays the management come straight from Wharton or other big name Mba program instead rising from the ground up within the company hierarchy
 

supercat

Major
I think it's too late for the U.S. to rein China's development of science and technology - the genie is out of the bottle.

How China's Huawei Killed $117 Billion Broadcom Deal

U.S. President Donald Trump’s
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move to block
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’s hostile takeover bid for
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reflects growing concern about China’s rising economic prowess. At the heart of that decision to scupper what would’ve been the largest technology acquisition in history is
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, the world’s third-largest maker of smartphones and, by some reckonings, the biggest producer of telecommunications equipment. Trump was acting on the
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of the Committee on Foreign Investment in the U.S., which vets deals for national security risks. The agency suggested that the deal could curtail U.S. investments in chip and wireless technologies, handing leadership to a relatively opaque Chinese company that’s funneling billions into developing next-generation wireless systems.

1. What is Huawei?
The Chinese company has in three decades grown from an electronics reseller into one of the world’s most important communications companies, with leading positions in telecoms gear, smartphones, cloud computing and cybersecurity. With 2017 sales of about 600 billion yuan ($95 billion), Huawei generates more revenue than
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or Boeing -- and twice as much as Broadcom and Qualcomm combined.

2. What role did Huawei have in the Broadcom/Qualcomm deal?
None. Huawei -- never an aggressive acquirer -- had no direct role in the deal negotiations. But it loomed over the talks because of its growing influence.

3. So why the worry about Huawei?
CFIUS is concerned that Broadcom would cut back on R&D funding at Qualcomm, strengthening Huawei at a time when rivals from Ericsson to Nokia are grappling with weak telecoms spending. That theoretically gives Chinese companies such as Huawei and closest rival ZTE Corp. the upper hand in steering the direction of wireless communications development, thereby -- so the argument goes -- jeopardizing U.S. national security. CFIUS’s concerns over the deal are
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also to stem from Broadcom’s ties to Huawei, which was blacklisted in 2012 along with ZTE when the U.S. House Intelligence Committee cited security risks posed by the companies.

4. What’s the link between Broadcom and Huawei?
Huawei uses Broadcom’s chips in networking products such as switches that direct data traffic between connected computers. Qualcomm also works with Huawei. The two said on Feb. 21 they completed testing on technology that advances faster 5G mobile services. Under one envisioned scenario, wireless carriers may be forced to turn to Huawei or other Chinese companies for cutting-edge telecoms gear. That’s unacceptable for a U.S. government that, concerned about the security of Huawei’s gear, has already
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the sale of the Chinese company’s smartphones on American carriers’ networks.

5. Are there broader implications for Chinese companies?
The president’s order is the latest sign of Trump’s tough stance on foreign takeovers of U.S. technology, and dovetails with a broader move to contain China on
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and deal-making. Government officials and industry executives have long harbored suspicions that the closely held Huawei works primarily for Chinese government interests, especially as it sells increasing amounts of critical telecoms infrastructure to Europe, Africa and the Middle East.

6. What exactly is Huawei’s connection with Beijing?
Founded in 1987 by Ren Zhengfei, a former People’s Liberation Army engineer, Huawei has always enjoyed favorable treatment from a government that -- like the U.S. -- remains wary of employing too much foreign technology for vital communications. In a report released by the U.S.
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in 2012, Huawei and ZTE were tagged as potential threats to security interests. The report questioned Huawei’s ties with the Communist Party and -- after multiple interviews including a sit-down with Ren himself -- it concluded that Huawei failed to properly explain that relationship. Huawei has repeatedly
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those accusations and says it’s owned by Ren and its own employees. Chinese government
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enacted in the past year seen as favoring local providers have only intensified suspicion. It remains unclear what support -- financial or political -- Huawei gets from Beijing, if any. In recent years, the company has begun releasing results, spent more on marketing and engaged foreign media in an effort to boost transparency.

7. Will Trump’s move give the U.S. a lead in 5G?
Nothing’s for certain. Along with ZTE, Huawei began plowing billions of dollars into the field from 2009 and is now among China’s top filers of patents both
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and domestically, covering everything from data transmission to network security.
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which may own a
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of essential patents on 5G, is angling for full-scale commercialization of 5G networks by 2020. Its rise coincided with the decline of competitors like Ericsson and Nokia, often undercut by Huawei and ZTE even as global telecoms rollouts slowed. Huawei is now not just the leading provider in the world’s largest telecommunications equipment, but also a dominant player across the planet. In a direct threat to Qualcomm, Huawei’s now designing its own chips. The Chinese company’s Kirin series mobile processors, made via subsidiary HiSilicon, compete with the Qualcomm Snapdragon chip employed extensive by
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and other global smartphone names.

8. What about the longer term?
China aims to lead the world in 5G -- a next-generation standard that will enable richer and faster video and open a whole new playground for mobile apps. In an interview with
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last week, the country’s minister for information technology said China is already preparing for the development of 6G technologies.

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hkbc

Junior Member
Can you say "trade protectionism"? What goes around comes around.

What's really interesting is how much the yanks seem to be spooked by things even tangentially related to China, it's almost like they feel they can't handle capitalism/competition and are just pulling down the shutters, I guess in the zero sum game Trump's manufactured you can't lose if they don't play but it's their so called allies that end up in the firing line rather than China.

I suppose the US is just not use to dealing with a country that's got a bigger more homogenous home market than theirs, probably more comfortable with pushing sh**hole countries (their words not mine!) around. Huawei is big because China's big I mean if mobile telecoms usage in China is half that of the US (which it isn't) the market would still be twice the size, every time some ban, embargo or restriction is put in place (for example microprocessors for supercomputers) it just means China has to spend a bit more time and money on R&D but once it's done they get to reap the benefits and leverage their huge internal market.
 
Tuesday at 7:41 AM
now noticed
Trump blocks Broadcom's $117 billion Qualcomm bid over national security
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related is this DefenseNews
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Without a comprehensive strategy to regulate foreign investment, China wins
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Most Americans would agree that a competitor’s control of an important military resource would create a threat to U.S. national security. Unfortunately, the primary watchdog for such situations, the Committee on Foreign Investment in the United States, or CFIUS, does not have adequate resources or legislative authorities to monitor or prevent many of the
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have engaged in to control, influence, or eliminate American economic capabilities.

Chinese President Xi Jinping and the Chinese Communist Party are explicit about their desire for complete control of China’s economy, and
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to the party’s often intrusive demands. When foreign companies seek to acquire a U.S. company, the CFIUS review process is voluntary or by the panel’s request. As a result, transaction participants have been able to skirt CFIUS authority. In order to protect America’s vital supply chains from foreign interference, regulations and laws governing CFIUS must be updated.

As illustrated by the recent acquisition of the United States’ only rare earth mine, foreign companies have found loopholes in the current CFIUS process. When MP Mine Operations LLC ― a Chinese-affiliated consortium including rare earth miner Shenghe Resources Holding Co. ― sought to acquire the only formerly operational U.S. rare earth mine, CFIUS, the very committee charged with evaluating deals of this nature, did not review the transaction, despite the fact that rare earth minerals are found in almost every major weapon system.

Proposed legislation in Congress aims to broaden the powers of CFIUS; moreover, this legislation provides an opportunity to scrutinize the very foreign investments that threaten to leave America reliant on China for critical military technologies.

Since it was established in 1975, CFIUS has not considered the long-term geopolitical implications that foreign investments in U.S. companies will have on the defense industrial base and on our military’s ability to fight — and win — wars. Not only is the United States the world’s largest recipient of foreign direct investment since 2006, but it is also the primary target of Chinese investment.

During the past 10 years, China’s investment in U.S. technology firms has amounted to approximately $35 billion. During this same time frame, foreign companies have continually evaded CFIUS scrutiny and threatened the United States’ technological advantage in a number of ways. For example, in 2012 a promising lithium-ion battery technology, developed in part with U.S. government funding, was sold to the Chinese conglomerate Wanxiang Group. Despite public concern that the acquisition would be used to supply advanced technology to the Chinese military rather than to American troops, CFIUS approved the acquisition with few reservations.

To prevent any further degradation of our military’s technological advantages, CFIUS must focus on the long-term implications foreign investment will have on the American defense industrial base.

CFIUS reviews hundreds of proposed transactions each year and recommends whether the U.S. president should prevent a transaction from being finalized. Over the 30 years of its existence, a U.S. president has prevented only five CFIUS-reviewed deals from being finalized. Two of those denials have happened under this administration.

Just this week, President Donald Trump blocked Broadcom Limited — a Singapore-based company tied to Chinese firm Huawei Technologies Co. — from acquiring Qualcomm Inc. Huawei and Qualcomm are the two dominant players in the market for next-generation wireless 5G. CFIUS was concerned that Broadcom’s links to Huawei, which many believe works primarily for Chinese government interests, and its hostile takeover bid of Huawei’s primary competitor would have given the Chinese company the lead in the race for 5G technology and forced consumers to turn to Hauwei or other Chinese companies for telecom gear.

The decision to block Broadcom from acquiring Qualcomm follows a presidential order last fall to prevent the acquisition of Lattice Semiconductor by a subsidiary of the state-owned China Venture Capital Fund Corporation Limited.

This rare uptick in blocked deals is promising and necessary to ensure American technologies are not easily sold to competitor nations. Unfortunately, these outcomes are rare exceptions in a long history of CFIUS reviews.

Recent legislation introduced by Sens. John Cornyn, R-Texas, and Dianne Feinstein, D-Calif., is an opportunity to strengthen CFIUS and ensure recent progress continues under future administrations. The “Foreign Investment Risk Review Modernization Act of 2017” would give CFIUS new tools to prevent mergers or acquisitions that could lead to the loss of technology critical to our military’s operations. This bill, the first to address the power and scope of CFIUS that Congress has considered in more than a decade, is an important opportunity to sharpen the national security focus of CFIUS and ensure that technology produced in the United States — and funded by U.S. tax dollars — is not surrendered to foreign entities seeking to take advantage of America’s open economic system.

In a period during which critical supply chains for U.S. military equipment and services are increasingly influenced or even owned by Chinese firms, CFIUS is one of the few tools America has to protect against foreign investments that may be designed more to weaken American national security than provide economic benefits. Accordingly, the need for a comprehensive policy that adopts a multi-decade, strategic view of foreign investment in critical technologies has never been more important. Without a holistic view of foreign investments and their long-term implications, CFIUS will fail to preserve the technologies needed to create disruptive, enhanced and enduring operational advantages over potential adversaries.

As
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notes, “if we allow China access to [the technologies that enable our Third Offset strategy], then not only may we lose our technological superiority, but we may even be facilitating China’s technological superiority.”

Congress and the current administration seem aware of the dangers to national security posed by unrestricted foreign investment. Recent actions suggest that both are serious about taking a more holistic and long-term view of acquisitions of American technologies and manufacturers. Further codification and establishment of safeguards against hostile foreign acquisition should be strongly considered, lest we someday find ourselves overmatched on the battlefield by an adversary using our own technologies against us.
 

Anlsvrthng

Captain
Registered Member
Can you read an article ? Boy you need reading comprehension classes . The article has nothing to do with outsourcing I show why the US is uncompetitive not because of out sourcing but because of lack of vision and refusal to spend money in investing into up to date technology. Because dong so will depress quarterly result temporarilty that is no no by the wall street standard

That is basically what is wrong with American industry they are so short sighted and don't want to see further than quarterly result
I believe it has to do with how the management are rewarded . They don't care about the long term health of the complay all they care is bonuses and option that they get if they get rave review from wall street . Long term planning is not in the card
As well nowadays the management come straight from Wharton or other big name Mba program instead rising from the ground up within the company hierarchy
It is the lost of the american ( or every ) economy capability to improve the efficience (output per unit work) .

The management is irrelevant, they dance with the market, and that drive everything to the direction of the minimum resistance. -> effciency improvement == move production to low cost country.

It was hiden in the past decades by the massive influs of Chinese peasants to the job market, but now this help evaporating...
 

Equation

Lieutenant General
So long Toys R' Us, I grew up with ya and will miss ya.:(

Toys 'R' Us will close or sell all US stores

by Chris Isidore, Jackie Wattles and Parija Kavilanz
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March 15, 2018: 10:44 AM ET
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Toys "R" Us is closing its doors after 70 years in business.

It marks the end for a company that sold toys, bikes, video games and birthday presents to millions of American kids. For half a century, Geoffrey the mascot giraffe invited children to its giant playhouses. Legions of adults who came of age in the 1980s and 1990s can probably still whistle the jingle: "I'm a Toys 'R' Us kid."


Yet Toys "R" Us fell victim to the strong currents pulling specialty retailers into oblivion. Walmart, Target and other big-box retailers — stores that offered aisles of toys and everything else, too — began to erode its dominance. And then the emergence of Amazon sped its demise.

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Toys "R" Us will shut or sell all of its 735 stores in the United States, according to court documents filed early Thursday. About 31,000 workers in the United States will be laid off.

In September, Toys "R" Us
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, hoping to shed debt and reinvest in its stores. At the time, Toys "R" Us disclosed that it had about $5 billion in debt and was spending about $400 million a year just to service it.

The turnaround didn't work. In January, the company said it would
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across the United States.

In a bankruptcy court filing Thursday, Toys "R" Us said it had a horrific holiday season, "well below worst case projections." It earned just $81 million in pre-tax profit in the fourth quarter, $250 million below the company's target and a quarter of what it earned a year earlier.

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The company said it would have to spend several hundred million dollars just to keep its remaining stores open through the end of the year. That's a problem because Toys "R" Us is already burning nearly $100 million per month. Meanwhile, no buyer has come forward to save Toys "R" Us, and the company acknowledged its creditors are getting antsy.

Toys "R" Us said it realized its plan to stay in business through the 2018 holiday season wouldn't work.

"The stark reality" is that the company will run out of cash in the United States in May, the company noted in its filing. So it determined the best way to pay back its creditors is to liquidate the remaining inventory in its remaining US stores.

"Everything is up for sale," Toys "R" Us CEO David Brandon told employees on a conference call Wednesday, according to a recording obtained by CNNMoney. "All of these assets are available. Someone can literally buy these assets, and if they are willing to pay one more dollar than the liquidation value of these assets then in fact it could be of interest."

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Toys "R" Us did not say when it would close the stores, but they will probably stay open for at least two months. The company has filed store closure notices that require a 60-day wait before it can shut them down. Toys "R" Us also told its 31,000 US employees that they will be laid off.

"That's horrible news, but that's the way it is," Brandon said on the call.

The company hopes to remain alive outside the United States. It said many of its stores in Canada, Europe and Asia "remain strong, viable businesses," and may be saved or sold. On Wednesday, Toys "R" Us said it was closing all its stores in the UK.

Toys "R" Us hopes to sell its much stronger Canadian business and run the company from that country. It is currently based in Wayne, New Jersey.

Brandon said a buyer of the Canadian business could choose to purchase the 200 best-performing US stores and keep them operational. But that's far from certain.

Toys "R" Us hasn't made a full-year profit since 2012 and has lost $2.5 billion since then. It reported a loss of $953 million in the first nine months of last year alone. Sales during the recent
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, which the company has yet to report, are believed to have been very bad.

The company was taken over by private equity giants KKR, Bain Capital and real estate investment company Vornado in 2005. Together they paid $6.6 billion, but saddled the company with $5.3 billion in debt.

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