Chinese Economics Thread
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Incredible! Both the tweet and article is from stand point of complete ignorance. There were reasons why manufacturing and production went to China and those reasons from before have been added to or replaced by other reasons now...
Tweet and article author seems to be stuck in history or seems to be ignorant of current realities. It’s really amusing!
They seem to think that the original reasons, comparative advantage of large labour population, low wages, relatively weak country and the will to simply comply still completely applies today. Whilst a large labour population and relatively low wages still applies the dynamics have shift too much for them to matter as much as before... now with possibly the largest skilled labour force as well as the largest labour turned consumers force, economic forces will ensure manufacturing maintain at a relatively high level regardless of what these countries do, the fact that there are simply no potential replacements seems to be lost on these people. The only possible replacement is India and it is not exactly the shining example it likes to make everyone think it is, otherwise they would be looking at the entire collective regions of SEA or Africa, which then will run into legal and stability issues with multiple sovereign states involved, funny thing is, India also have this problem as each state tries to F*** each other to get more for themselves. Labour costs isn’t exactly the only issue... the stability of the state is also an issue... you don’t want protests stopping the supply chain, production and transportation, advanced countries can’t deal with it, hence the trade union and increased costs and less advanced countries can’t exactly put it down by force or they will run into the whole human rights hypocrisy.
Additionally, the supply chain already in place is unlikely to shift dramatically... building assembly plants is easy and labour training is far less complex but what about the parts, the machinery and raw material processing... which company’s CEO is going to propose to their board that they will be spending god knows how much money in order to build a parts factory, fit it out and then train staff, all the while not generating profits for their share holders, in a country that is not as competitive in turn of trained skilled labour or consumer base or in the case of more advanced economies have to deal with trade unions, all the while they could have done the same in the already established hub at a fraction of the costs, with well trained labour readily available, a well adjusted infrastructure and logistics network and generating profit at the minimal time needed. Also economy of scale isn’t a myth! There is also the issue of returns to consider even if they could do all the above. Which company’s CEO wants to explain to their board and shareholders the reason they are losing or are unable to gain market share or profits, is because they decided to take on more costs and risks due to a political reason, whilst their competitors can offer something better or equal for cheaper.
Furthermore, what about the infrastructure or the transportation network of the countries in question, time waits for no one especially in the modern global supply chain... the labour costs involved in moving things around isn’t exactly cheap either when transportation itself is an issue.
Their plan might be worth something either 20 years ago or 20 years from now but at this point in time, this is empty lip service of a bunch of people who don’t know what they are talking about. In case people are wondering, the reasons for 20 years ago I am sure everyone understands, the reasons for 20 years from now is mainly due to the developments of technologies (automation to be specific) as well as the development of other potential countries or regions such as SEA, Africa or India. For SEA, with RCEP and OBOR the potential development of SEA could generate a large and wealthy enough consumer base as well as the potential infrastructure build up, to justify thinking of the investments involved. For Africa, with the current projections some countries might become viable again with as infrastructure develops and wealth accumulates, hence serving local consumers with a local manufacturing base might become justifiable. As for India... I simply don’t know... this is not about looking down on India, but historical practices and the lack of consideration for the future makes it really difficult to consider it’s potential.
Sorry, rant over... after reading that BS I just needed to rant!
Yes try telling American lobster farmers, wineries, natural gas producers or wheat farmers why they must fight a trade war with China to force China to buy Australian instead of American products when Australia has a huge trade surplus with China and the U.S. a trade deficit.
Your 100% Eurocentric views, Portuguese man, are making us tired. We are reading those views in MSM daily. Spare us the garbage in this corner, thanks. Otherwise leave this platform and engage with your own people.
Skywatcher
Captain
People are still analyzing Chinese economic and technological policy as if it was 2000 (or 2010, if we're feeling generous).
Do we really think any of the "free western" world can get together, like the old days. ie: eight nations alliance?
Today, the "freedom" loving countries are just as happy taking the Australians share of China's market.
I agree to some extent but I don’t think it’s so much analysing Chinese economic and tech policy as if it was 2000 that people write these tweets or articles... the articles can be explained by political agenda... but people writing the tweet seems to not understand why China exports so much to the western/like-minded world in the first place. It’s quite fascinating how simple minded some people are on these topics.
Exactly. Look at Chongqing now. I rememver watching a BBC documentery on it from one of its reporters. It showed Chinese people (known as bang bang man) toiled up the steep banks with goods and people. Everthing is by hands and foot.
This subway of Chongqing is to die for, the west could only dream of having something like this
If anyone here is asleep it is you, who dont understand how the economy works in china.
Seems to me that this is something that every nation does or tries to do.
Why?
If so, perhabs no one bothers because american companies all list their shares in american exchanges (why should they go somewhere else?).
You dont have arguments to counter what i post, and now ask me to leave the forum?