How to cope with decreasing of export/demand for chinese goods.

Foreign industry presence in China is actually helpful for the development of the nation. Everyday I see more and more international companies trying to be locallised while still retaining their international status (glocalization). Foreign companies that fails to adapt and localize will lose out to either local companies or multinational competitors. If the chinese market grows to be bigger than the US market in the next few years, I expect some multinational companies to move their headquarter to China. Also remember that chinese some companies have deep pockets, they have the ability to takeover medium sized foreign companies with high tech products. Of course the opposite can also be true as some foreign companies agressively acquire local companies.

Also don't forget the contribution that foreign companies have in training chinese employees. My colleagues in business schools are mostly former employees of large multinationals with high innovative capabilities. What do they do after they graduate? Many will continue to work for foreign companies, some will end up in local companies and some will be entrepreneurs. I can see a distribution of knowledge and skills here. Besides more and more companies are setting up R&D centres in China as china shift from cheap manufacturing to cheap R&D.

Having foreign companies enter china is infact advantageous for Chinese soft power projection. As the Chinese market grows, more and more foreign companies depend on chinese market for their revenue and profit. Imagine where GM will be without the China market? it will probably file for chapter 11 now. Since these companies have large lobbying power, they will stabilize relationship between western countries and China. This way they will be less likely to initiate war with China. Imagine in 20 years time when the chinese market is larger than the US and Europes market and multinationals firmly established in China. For some reasons Taiwan declared independence and war ensues, Western countries embargoes China and as a result cause their companies as well as chinese companies to lose trillions of whatever dollars. The resulting catastrophy in the world economy will make the current financial meltdown in the US looks like child's play. that is what I call weapon of mass economic destruction.

Autumn Child said:

Foreign industry presence in China is actually helpful for the development of the nation. Everyday I see more and more international companies trying to be locallised while still retaining their international status (glocalization).

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I don't deny the benefit of that especially bring a country from bottom level to upper mid-level. As evidented in open market approach of malaysia, phillippines, thailand. Granted they are small, but look South Korea, totall surpassed them head to toe.

But from upper mid-level to top level, I don't think this wide open model works
time will be great indicator of whose opinion is more correct. My bet if they continue like this, full of foreign brands dominate their markets. CHina's potential is capped. It will never achieve overall industrial capility of Japan, let alone US.

antimatter said:

It's good for taiwan, but that not enough for China if it wants to be top power in the world.

If the next 10 yrs, CHina is wallowing in the same areas as taiwan and not much else. then it's no good.

right now, China really has one true world-class technology company that's Huawei. I don't consider Lenovo as coretech that's why IBM sold it.
CHina needs to develope at least 10 more world-class tech comapnies. I am keeping my fingers across on this.

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We all know what your projections many times. The failure of your argument is that you still haven't explained how kicking foreign companies out of China is going to help that. Thus, your argument really doesn't exist.

Anyhow, as a side note, the Chinese government has actually done a lot to promote domestic industries and companies. They have imposed restrictions on the outflow of private investments into foreign financial markets, thus forcing more Chinese savings to be invested in domestic industries than would have otherwise. On the flipside, by restricting foreign participation in the Chinese capital markets, the government has preserved the independence of Chinese firms and brand names. Restrictions on the flow of finance are realistic, at least in the short term. Restrictions on the flow of physical goods are not.

crobato said:

Who told you so? Its not as if the Chinese had a turbofan project to begin with on their own. It was in fact Rolls Royce that gave them the boost. Later the Chinese were studying the CFM 56.

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I am referred to the Y-10 program, the large transport program that would have included a turbofan program. The US dangled an offer and China killed off the program and bought American.

The Russians did the same thing with their engines. China makes some steps, and better engines are offered, killing the program.

crobato said:

Edged out by who? The fact is that it disputes protectionism, because Volkswagen should have been able to hold off the likes of GM, Toyota, Honda, etc,. They didn't, despite being in China so early and enjoyed all sorts of government backing.

It simply destroys your theory that being first to have a dominant market share creates a form of protectionism.

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I'm obviously not saying that a corporation that dominates a market can never lose it. That would be absurd.

I am saying that small local competitors from a developing country cannot challenge the dominant corporation -- of course other sophisticated, well-financed and well-run corporations can challenge the dominant corporation.

That's what happened to VW. It wasn't Chery that upset VW, it was Toyota (and the like).

FugitiveVisions said:

Your broad interpretation of protectionism is a non sequitor to this discussion, because the debate is over the viability of a much narrower interpretation, that restrictions on the introduction of foreign companies and goods into the domestic economy promotes domestic industries. So in fact, you have admitted to the fallacy of this argument by acknowledging that foreign participation in the domestic economy with certain restrictions is better than no participation at all. Debate over.

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LOL. You can't even get your logic straight. There is in fact no inconsistency between arguing that some restrictions on foreign companies is a good thing and arguing that some degree of foreign participation is a good thing too. :nana:

crobato said:

Actually Taiwan is doing pretty well.

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Antimatter is talking about branding. And he is right: there is a clear and undeniable difference between the brands of Japan / Korea and those of Malaysia / Thailand. China and Taiwan are sort of in between at the moment.

If you have to peek under the hood to find a Taiwan name, label or company -- that's NOT brand power.

Actually, I would argue that the actual make of the component is much less important than the "nationality" of the product as it is presented to the buyer. If your country is identified with a lot of famous brand names, this is a "meta-brand" for the country.

Consider this hypothetical: there is a corporation in China using the brand name "Ming Pai." It is a famous brand internationally, and it identifies itself as a brand from China. But all of its products are actually designed and made in Indonesia.

Now suppose Indonesia comes out with its own brand -- people would not associate this with Ming Pai because Ming Pai is a Chinese brand. Indonesia gets "no respect" from designing and making Ming Pai products.

Now suppose another Chinese company comes out with another brand "Ming Biao." Consumers would look at this and think, "Yes, those Chinese are good at making products. I remember buying Ming Pai, so Ming Biao must be good too."

Therefore, having a collection or a group of famous brands that are identified with a particular country creates a "brand of brands" for that country. The name of the country becomes a famous brand name by itself! This is what successful countries like Japan and USA have.

A place like Taiwan -- where nobody can think of an internationally famous Taiwanese brand -- is nowhere near the same level. I don't care how many things they actually make. Everything is under the hood. And that just doesn't cut it for consumer branding and reputation.

antimatter said:

Not according to my eyes of what I see, I see people ready to revolt and overthrow the government because of just imported beef.

That should give you a hint, them don't like to buy any foreign stuffs.

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That's a great point. And people on this thread who chose to ignore this are just being deliberately ignorant.

Nationalism is what separates the countries that go from LOW to MIDDLE versus those that continue on to go from MIDDLE to HIGH. :china:

Roger604 said:

LOL. You can't even get your logic straight. There is in fact no inconsistency between arguing that some restrictions on foreign companies is a good thing and arguing that some degree of foreign participation is a good thing too. :nana:

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Your insistence on distorting the original issue is quite trivial and doesn't win you any debating points here. The spirit of antimatter's original contention was that China should stop the flow of foreign goods into the Chinese market. It doesn't take a genius to recognize that. If you agree that China should stop foreigners from doing business in China and quit the WTO, then come out and say so. No need to waste anyone's time with petty manipulations.

FugitiveVisions said:

China should stop foreigners from doing business in China and quit the WTO, then come out and say so. No need to waste anyone's time with petty manipulations.

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Hold your horses. As of now, 2008, they are still making surplus at export.

But , when the CHina reaching the upper mid level per capita GDP of $6000, if they still don't have own brand name stuffs. then the advantage of world manufacturing would be gone. The Export would pretty much dry up by that time.

CHina would just serves as a juice steak for foreign companies to leeching off on CHina to make a living.

IF you ask me when and how China quit WTO and kick out foreign business, I would say by the time they reach $6000 per capita, and have no brand name stuffs to show for. Then, that's the time.

antimatter said:

IF you ask me when and how China quit WTO and kick out foreign business, I would say by the time they reach $6000 per capita, and have no brand name stuffs to show for. Then, that's the time.

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Your argument is totally laughable. Everyone knows that the time to kick out foreigners is when China reach $6050 per capita, and have only 2 brand name stuffs to show for. That's when they should stop being a juice steak. Get your facts right.

FugitiveVisions said:

Your argument is totally laughable. Everyone knows that the time to kick out foreigners is when China reach $6050 per capita, and have only 2 brand name stuffs to show for. That's when they should stop being a juice steak. Get your facts right.

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You didn't explain why's laughable.
$6050, it's alright. My numbers usually come with +/-10% tolerance w/o saying. it's still within the range.

I have feeling, when that date comes, you won't be happy camper, probably, a signifcant dip in standard of living in your country, or whereever you are from.

antimatter said:

You didn't explain why's laughable.
$6050, it's alright. My numbers usually come with +/-10% tolerance w/o saying. it's still within the range.

I have feeling, when that date comes, you won't be happy camper, probably, a signifcant dip in standard of living in your country, or whereever you are from.

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You want an explanation why it's laughable? Because when I saw that post, I laughed. There.

My $6050 estimate comes within +/-0%. It's dead-on accurate. See, even my estimates are better than yours.

If there is ever a day when the average Chinese citizen is making $6050 a year and yet China has only TWO brand names.....I don't want to live to see it....the shame is just too much....

FugitiveVisions said:

making $6050 a year and yet China has only TWO brand names.....I don't want to live to see it....the shame is just too much....

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Many countries citizens currently around $6000 don't have major international brand like panama, malaysia, kasakstan, brazil, south africa, urugay...etc

If China only have few brands by that time, it means they need adjust their policy, being too reliant on foreign stuffs, don't you think?