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The End of Cheap Labor In China

samzenpus posted more than 2 years ago | from the they-grow-up-so-fast dept.

China 422

hackingbear writes "In the past decade, real wages for manufacturing workers in China have grown nearly 12% per year. The hourly cost advantage, while still significant [comparing to the West], is shrinking rapidly. The changing economics of Made in China will benefit both the rich and poor world. Countries like Cambodia, Laos, India and Vietnam are picking up some of the cheapest labor manufacturing left by the Chinese. And there is already evidence of at least the beginning of a shift in manufacturing operations returning to the US. Perhaps we will soon stop picking at 'Made in China' but instead complaining 'Made in Vietnam/Cambodia,' while serving the flood of Chinese tourists stocking up on brand-name merchandises on US tours and Chinese students paying high tuitions to our cash-strapped universities."

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The capitalists will sell us the rope to hang them (-1)

Anonymous Coward | more than 2 years ago | (#36494206)

Done deal.

Re:The capitalists will sell us the rope to hang t (0)

Anonymous Coward | more than 3 years ago | (#36494240)

To hang who? China? US? I'm a bit weak on brain power.

About. Fucking. Time. (1)

MrQuacker (1938262) | more than 3 years ago | (#36494226)

'nuff said.

Re:About. Fucking. Time. (1)

jhoegl (638955) | more than 3 years ago | (#36494324)

Yeah... Its all theory.
Ill believe it when I see it.

Re:About. Fucking. Time. (5, Insightful)

mjwx (966435) | more than 3 years ago | (#36494580)

'nuff said.

China will simply move the cheap manufacturing to Africa.

You don't think china's been buddying up with East African nations for nothing do you? They've had a military medial ship there for six months late last year spreading China's good will.

China is not dumb, not in the slightest, they've been preparing for the growth of their economy for at least a decade and manufacturing will not start to move for at least another decade, China intends to branch into the more advanced side of manufacturing such as aircraft and high tech. Much the same as Japan and Taiwan did, when I was a lad, "made in Taiwan" was not a symbol of quality, now days Taiwan makes some of the highest quality electronics in Asia (along with Korea and Japan) so why can't China do the same thing? Unlike the other poor Asian nations such as Thailand or the Philipines, China does not have a incompetent leadership mired in corruption.

So chances are, in 15 years we'll still be buying Huawei modems, except they will have "made in Tanzania" written on the side.

Re:About. Fucking. Time. (1)

Anonymous Coward | more than 3 years ago | (#36494658)

The African "Initiative" at this point is more focused on stripping all the resources they can from that sad continent without regard for the human cost. If anyone is left for outsourced labor in the coming decades, that would be miraculous.

Re:About. Fucking. Time. (5, Insightful)

Wyatt Earp (1029) | more than 3 years ago | (#36494838)

Once you get out of South Africa and Egypt there is no infrastructure for manufacturing in Africa. Even with 15-25 years of solid investment and construction, there won't be infrastructure for manufacturing in Africa outside of Egypt and South Africa.

China isn't investing in the Republic of South Africa or Egypt, they are investing in places they can strip bare of mineral wealth.

Re:About. Fucking. Time. (0)

Anonymous Coward | more than 3 years ago | (#36494950)

What good is moving to East Africa? Are they also going to re-locate their citizens there to work? "China does not have a incompetent leadership mired in corruption" This is the stupidest statement I have seen all month. Are you shilling for the Party?

Re:About. Fucking. Time. (1)

2fuf (993808) | more than 3 years ago | (#36494806)

they took our chaaps!!!

Central planning doesn't work. (2)

trout007 (975317) | more than 3 years ago | (#36494230)

It amazing to watch all of the people saying China is going to take over the world. It is like they have been asleep for the last 20 years. All centrally planned economies go broke including ours. China will be a basket case in the next 20 years.

Re:Central planning doesn't work. (2)

RightwingNutjob (1302813) | more than 3 years ago | (#36494276)

China's not centrally planned. That's how they got rich. In some (by no means many) ways, the Chinese *economy* is more free than ours. The problem China will have will happen because people who are rich, and whose parents and grandparents were rich won't be so quick to swallow the party line as people whose parents or grandparents didn't have indoor plumbing.

Re:Central planning doesn't work. (3, Informative)

paulo.casanova (2222146) | more than 3 years ago | (#36494308)

China is not centrally planned? There is no way you can be serious... check NDRC [wikipedia.org]

Re:Central planning doesn't work. (2)

DNS-and-BIND (461968) | more than 3 years ago | (#36494414)

Huh? Huge parts of the Chinese economy are directly owned by the government. Sort of like how General Motors is owned by the US government. I suppose the Western media failed to inform the public of the recent unveiling of the Twelfth Five-Year Plan [chinalawblog.com] , which will guide China's development for the next half decade.

I really don't know how this idea got started, because it's not true at all. I see it so many places, though, so there must be some source of the contamination, like the Broad Street Pump [ucla.edu] .

Re:Central planning doesn't work. (0)

Anonymous Coward | more than 3 years ago | (#36494630)

Huh? Huge parts of the Chinese economy are directly owned by the government. Sort of like how General Motors is owned by the US government.

Uh, maybe you didn't hear, but the government sold off a bunch of those GM shares. They're now a minority shareholder, so they don't "own" GM.

Re:Central planning doesn't work. (1)

mirix (1649853) | more than 3 years ago | (#36494282)

Not sure if you missed it, but Mao died a long time ago.

Re:Central planning doesn't work. (1)

Anonymous Coward | more than 3 years ago | (#36494338)

Can you name any large economy in the last say 5000 years that at least didn't have some authority providing a regulatory framework or some authority to which disputes can be reffered to? With out any central orginaztion or authority at all pure unfettered capitalism (rarely if ever seen) is impossible. At very least currency must be regulated unless, all the myth of the free market is dishonest. Every policy and regulation will favor some over others. If you really belive in an economy with no regulations or oversight at all that is rapidly going to devolve into either anarchy(unlikely) or rule by some class who has a power that transcends money (like people who control weapons, food , water, medicine, etc)

Re:Central planning doesn't work. (1)

Anonymous Coward | more than 3 years ago | (#36494410)

If you really belive in an economy with no regulations or oversight at all that is rapidly going to devolve into either anarchy ...

I wouldn't call this devolution.

Re:Central planning doesn't work. (3, Insightful)

The Dawn Of Time (2115350) | more than 3 years ago | (#36494606)

If you think there's no difference between a regulated market and central planning, I invite you live in a Chinese ghost city [dailymail.co.uk] for a little while.

Re:Central planning doesn't work. (0)

erinpolerimos (2213640) | more than 3 years ago | (#36494364)

China is called the sleeping giant. China has the most population and they are engaging also in invention and a lot more.

Re:Central planning doesn't work. (1)

Haedrian (1676506) | more than 3 years ago | (#36494384)

Its not just that which is making China powerful. China is playing both the capitalist game and the 'government controlled' game. You're free to open your own factory and employ chinese workers (which also means they get a look at your designs), while the government owns research facilities and that sort of thing.

So when you look at how China got its train designs, and you wonder how the 'fake iPhones' look just like the real thing...

Fuck 'em both (-1)

Anonymous Coward | more than 3 years ago | (#36494238)

Fuck the U.S and fuck China., they are both piles of nigger shit. Listen up both of you, THE REST OF THE WORLD DOESN'T GIVE A CRAP ABOUT EITHER OF YOU.

They can both eat a bloody nigger dick and die.

Re:Fuck 'em both (0)

Medevilae (1456015) | more than 3 years ago | (#36494248)

lol u mad?

Re:Fuck 'em both (1)

AngryDeuce (2205124) | more than 3 years ago | (#36494566)

Oh, he mad.

Poor China (1)

Medevilae (1456015) | more than 3 years ago | (#36494296)

But more importantly, poor Walmart!

Re:Poor China (1)

ISoldat53 (977164) | more than 3 years ago | (#36494356)

Bangladesh her we come!

Re:Poor China (0)

Anonymous Coward | more than 3 years ago | (#36494620)

Bang(...) her we come!

Captcha: restroom

Re:Poor China (0)

Anonymous Coward | more than 3 years ago | (#36494922)

What is (...)? Is it ASCII art representing a single breast with a triple nipple?

You have a very specific fetish!

Nah (0)

DNS-and-BIND (461968) | more than 3 years ago | (#36494300)

This is just the latest Western media meme (read: distortion). Manufacturing isn't going anywhere. The lowest-cost stuff will find a new home wherever it's cheapest, and that's how it's always been. But China manufacturing is here to stay. American companies may find that it's cheaper in the short run to bring manufacturing back onshore, but then they're right back to the problems of an anti-business zeitgeist which is probably why they left in the first place. China manufacturing will move...to China [managingthedragon.com] . Almost all of the development since the 80s has been concentrated on China's east coast. The costs in Beijing or Shanghai exceed those of many Western cities. There are plenty of inland areas awaiting investment and development. Vietnam? I have a buddy who does a lot of business down there. Says it's like China 20 years ago...shipments can't get to port because a flood washed out the road, generally poor infrastructure for taking care of foreign investments (permits take forever to get, etc.), and tons of other disadvantages. Still, Vietnam can make sense under certain circumstances.

Re:Nah (2)

Mashiki (184564) | more than 3 years ago | (#36494408)

Africa will more than likely be the next big development store. China is quickly running into the gambit of 'too expensive' even by other standards. Vietnam beh maybe, but I doubt it. Generally 'shifts' in manufacturing happen every 10-20 years(though the last time it happened before that it was the industrial revolution, and moving everything from europe to north america). Last time it was mexico and latin america. Then it was china and se-asia. But china in and of itself has a more serious issue with an artificially controlled currency tacked with seriously out of whack housing and commodity prices to the average person.

Re:Nah (0)

Anonymous Coward | more than 3 years ago | (#36494512)

"But china in and of itself has a more serious issue with an artificially controlled currency tacked with seriously out of whack housing and commodity prices to the average person."

But China has something that the rest of the world does not. 1/5th of the whole consumer market!

Even if it becomes as expensive to produce and ship in China compared to say the US, companies will still prefer to produce there because that is where their customers are.

This is why we can't leave globalization to save US jobs. The companies will just leave the US forever and focus on China and the rest of the world.

Re:Nah (1)

korean.ian (1264578) | more than 3 years ago | (#36494560)

"Africa" (as a vast generalization) still suffers from too much political instability and lacks high-tech manufacturing facilities. There are still vast stores of minerals and natural resources in Africa though, which is where much of the economy is focussed.
Vietnam is definitely an up-and-comer for cheap manufacturing - they've been following China's lead in terms of liberalizing their economy to accommodate foreign investment, and they have an intelligent, hard working, underemployed labour pool.

Re:Nah (1)

Mashiki (184564) | more than 3 years ago | (#36494794)

Political instability didn't stop development in latin america, nor s.america. In fact it simply made it more attractive.

Re:Nah (0)

Anonymous Coward | more than 3 years ago | (#36495016)

Political instability didn't stop development in latin america, nor s.america. In fact it simply made it more attractive.

There's a big difference in the kind of instability seen in Latin America in the last couple of decades, and the kind seen in places like Liberia or the Congo.

Re:Nah (1)

AngryDeuce (2205124) | more than 3 years ago | (#36494618)

And then, by the time Africa starts getting a large middle class, in like 2050, manufacturing will move back here to the Americas because by that time our economies will have collapsed, we'll be the third world countries with all the slave labor, and people will be complaining about cheap American made crap the world over...

The words may change, but the song always remains the same...

Re:Nah (0)

Anonymous Coward | more than 3 years ago | (#36494498)

So... an article talking about the end of 'cheap labor' in China (compared to other developing countries) is an example of the 'latest Western media meme' of how manufacturing in China is at an end?

It seems it isn't the Western media who have a problem with being nuanced.

Re:Nah (1)

icebike (68054) | more than 3 years ago | (#36494514)

Exactly right.

As I've posted elsewhere, China is a factory, and Factories need work. Low skill stamping and molding jobs may go elsewhere, but manufacturing of machinery and electronics is going to stay in China. They can't afford to lose that because those workers aren't going to move back to the farm.

The cities are modern in their core areas, and atrocious in their dense beyond belief housing areas. And almost everywhere the streets and highways are empty. This is not a mobile population that has anywhere to go, or any means to get there. They will stay and work for what ever wage is offered.

Re:Nah (1)

Antisyzygy (1495469) | more than 3 years ago | (#36494542)

Meme's are not distortions necessarily. They are just popular and catchy ideas or phrases. Oddly enough, the US dollar has been dominated by other currencies recently, hence the high oil prices, commodity prices, etc. Our purchasing power is being eroded. As a consequence, nations like Canada, Britain, Australia, etc. can now buy more in the US for their money then they could 5-10 years ago. It makes us look more attractive as a manufacturing base when you consider exchange of currency and purchasing power. The US is only as powerful as it is due to being the one of the only two manufacturing centers since WWII to a little past Vietnam (i.e. the other is USSR). The Germans, Japs and our ancestors bombed the majority of the rest of the developed world's major industrial infrastructure to the ground. We had the only remaining centers of industry, and our nation became rich since if someone wanted a tractor for their farm, they couldn't get one anywhere else. We existed as a manufacturing monopoly. Now, people aren't use to being efficient or even working that hard to make a living so we are suffering in light of the globalization of supply/demand. However, the US still has vast tracts of land, vast amounts of resources, and a huge military. We have nothing to worry about accept for the economy shoveling most of the money to the already rich rather than sharing it with the other "more-than-willing-to-work" Americans. The US still has better manufacturing capacity than most places in the world save Germany, Japan and some others I may not be aware of. To this day Chinese goods still are inferior quality but usually functional (at least for short term).

Re:Nah (0)

Anonymous Coward | more than 3 years ago | (#36494612)

right back to the problems of an anti-business zeitgeist which is probably why they left in the first place.

Care to cite any evidence of this? Most of the largest companies in the US pay *negative* tax rates, so unless you consider "paying workers enough that they don't starve to death" and "not poisoning everything in sight for a buck" to be "anti-business zeitgeist" I'm not sure what could make the US more *pro*-business...

You may also want to consider that the Chinese you're giving a handjob to are COMMUNISTS - so much for "US will win cuz capitalism is BETTAH!", I guess?

Re:Nah (1)

bosef1 (208943) | more than 3 years ago | (#36494800)

I'm not sure where the grandparent gets the idea of "an anti-business zeitgeist" either. I must admit I'm not up on the variety of opinions held by the various communities of the entire United States, but I seem to recall hearing about many communities that get involved in tax bidding wars to attract companies, and many of the major "Rust Belt" cities still bemoan the loss of manufacturing jobs in a way that makes you think they would take them back if they were offered.

Re:Nah (0)

Anonymous Coward | more than 3 years ago | (#36494970)

I'm not sure where the grandparent gets the idea of "an anti-business zeitgeist" either.

Most likely he's from California.

Re:Nah (1)

phantomfive (622387) | more than 3 years ago | (#36494684)

More importantly, imagine a new factory opened in the US, and needed a million workers. Who would want to work in a factory? Some Americans, maybe, but it will mostly be filled with Latinos and other immigrants. So we have a choice to either import immigrants to work in factories in America, or build factories in their countries so they can stay home. Because Americans don't want to do that manual labor (I sure don't).

Re:Nah (1)

jbplou (732414) | more than 3 years ago | (#36494780)

Do you realize that the US is the largest manufacturer in the world not China. Countries see these big gains as they improve thief infrastructure but they never surpass the US. Look at Germany and Japan both have had times in the past 60 years where "experts" said they were over taking the US.

Re:Nah (1)

el3mentary (1349033) | more than 3 years ago | (#36495028)

Do you realize that the US is the largest manufacturer in the world not China. Countries see these big gains as they improve thief infrastructure but they never surpass the US. Look at Germany and Japan both have had times in the past 60 years where "experts" said they were over taking the US.

Bullshit.

https://www.cia.gov/library/publications/the-world-factbook/rankorder/2078rank.html [cia.gov]

Sorry for the anon post... but... (1)

Anonymous Coward | more than 3 years ago | (#36494320)

I know of at least two large corporations that are winding down (through attrition) their sw development headcount in China. Both due to the fact that the cost advantage is going to disappear in the next 2 to 3 years, but also because other benefits promised have failed to appear. (I'm being deliberately vague here. Lets just say that the Chinese powers that be made commitments that they have not met, or even begun to meet. Not even a hint of it actually.)

No skepticism at all? (0)

Anonymous Coward | more than 3 years ago | (#36494330)

I am a little surprised that everybody seems to instantly assume that the article is entirely true, and unbiased. I have learned not to immediately trust China, the pop-media, or US corporations.

On the other hand, I do not have any specific evidence to refute any it.

Re:No skepticism at all? (-1)

Anonymous Coward | more than 3 years ago | (#36494442)

Damn chinks are finally gonna take over the world. About time, all these niggers were tired of spit shinning whitey's boots. Now since china is investing heavily in africa, and since both breed like rabbits on fuck day, u can expect to start seeing lots and lots of blasian babies. Kill whitey!

Plenty of space (0)

Anonymous Coward | more than 3 years ago | (#36494350)

Perhaps then they can afford to move into their ghost cities.
http://www.youtube.com/watch?v=rPILhiTJv7E

Hate when my predictions come true (0)

Anonymous Coward | more than 3 years ago | (#36494352)

When we first started the wholesale export of manufacturing and service economy jobs to China, India and the like I predicted that within a very short time the wage pressure would increase and the environmental law would catch up. At the same time the U.S. economy would be decimated enough so that manufacturing could be brought back here.

I hate when I'm right.

Re:Hate when my predictions come true (2)

ameline (771895) | more than 3 years ago | (#36494374)

Arbitrage is always temporary.

Re:Hate when my predictions come true (0)

Anonymous Coward | more than 3 years ago | (#36494756)

When we first started the wholesale export of manufacturing and service economy jobs to China, India and the like I predicted that within a very short time the wage pressure would increase and the environmental law would catch up. At the same time the U.S. economy would be decimated enough so that manufacturing could be brought back here.

I hate when I'm right.

Since it began in the late 70s / early 80s I would hate to see your definition of a long time to prove you right or wrong. Also, Google "onshoring" or "reshoring" and you may find out your prediction looks more like a 10-day forecast than a card trick.

Oh my god... (0)

Anonymous Coward | more than 3 years ago | (#36494362)

It's no longer a society now of a little chinaman saying

FIVE DOLLAH YOU PAY NAO :p

That's how industrial revolutions go... (5, Interesting)

jcr (53032) | more than 3 years ago | (#36494368)

People move from subsistence farming to factory work, capital investment raises their marginal productivity, employers have to compete for workers, and wages rise. It's the same thing that happened in England and the United States in the late 1800s and early 1900s.

-jcr

That's just the beginning of the cycle, John. (-1)

Anonymous Coward | more than 3 years ago | (#36494518)

But that's only the beginning of the cycle, John. A few generations later, the business leaders in such countries realize that there are third-world laborers somewhere else who will work for a small fraction of the cost of domestic workers. Of course, these workers will work in shitty conditions, but more importantly, the goods they produce and the services they offer will be far inferior to those produced by the domestic workers.

In the end, "free trade" will harm the domestic economy significantly. The lost jobs and the shitty imports will result in a situation much like we have in America today. A once-proud nation with a free and well-functioning economy is reduced to a pathetic mess, with a small number of very wealthy individuals and a huge masses of the poor. Nobody will be able to even buy simple manufactured items that work properly.

Such a country will never recover. The loss of the jobs means the loss of the manufacturing knowledge. By the time the country hits rock bottom, such knowledge will have been gone generations earlier. Even simple goods cannot be manufactured any longer. Nobody will even know how to build the factories or the machinery needed to manufacture the goods effectively! It's a hopeless situation. Indeed, it's even unlikely that manufacturing would ever return to such a nation, even after many generations. The political situation at such a point will be extremely bleak. The nation state itself may not even exist at this point any longer.

Re:That's just the beginning of the cycle, John. (4, Insightful)

phantomfive (622387) | more than 3 years ago | (#36494596)

A once-proud nation with a free and well-functioning economy is reduced to a pathetic mess, with a small number of very wealthy individuals and a huge masses of the poor.

I was having trouble deciding whether to mod jcr up or reply to this braindeadedness.

Huge masses of poor? In the US? The only way you can come to that conclusion is if you don't even know what poor is. I don't need to show you, but this [google.com] is poverty. In America, homeless people are fat, and the only reason they are homeless is because they have serious mental or emotional issues.

In America, we have 'poor' people, as measured by the poverty line, but the poor people have refrigerators. They frequently have cars. They definitely have shoes. I'm not saying that everything is perfect here, or that there aren't people who have money problems (the primary problem people will run into in that case is healthcare), but in America, we have it good. If you don't think so, you really need to get out of the country and see the world.

Re:That's just the beginning of the cycle, John. (0)

Anonymous Coward | more than 3 years ago | (#36494734)

Huge masses of poor? In the US? The only way you can come to that conclusion is if you don't even know what poor is.

Oh, I see. So as long as there's *some* shithole in the world whose poor are worse off than ours, we shouldn't be concerned about it. And here I figured that since our country has a GNP per capita 10+ times the size of those other countries that it might be reasonable that we not have people starving and dying of preventable diseases like TOOTH DECAY - guess I'm just a DFH for that...

Related question: do you ever get used to tossing the salad of the rich, or did you just love the taste from birth?

Re:That's just the beginning of the cycle, John. (0)

Anonymous Coward | more than 3 years ago | (#36494816)

...the poor people have refrigerators.

Yeah, but they're in the yard.

Have you been to the Deep South lately? (1)

Anonymous Coward | more than 3 years ago | (#36494898)

You're quite short-sighted. Free trade has only really taken hold in America over the past 20 years. It's just the very, very beginning of the decline.

Have you been to the Deep South lately? While the Rust Belt states were hit first, they were much better off to begin with than the Deep South. The Deep South has always been somewhat backward, but things did turn around for a while. They did have a lot of manufacturing, but that has since been shipped off to Asian nations or Mexico. The Deep South is suffering now, and it's becoming more and more obvious each year.

The claims you make about the poor do not hold true any longer. Many poor in the Deep South only have a refrigerator because their parents or even grandparents bought it in the 1970s, when Americans still had jobs, and Americans still produced appliances that lasted more than a couple of years.

It's much the same situation when it comes to vehicles. Many of them are driving cars that were manufactured in the 1970s and 1980s, when vehicles were still made in America, and when they were far more reliable than they are today. Of course, America is somewhat unique in that it's totally against every form of affordable public transportation. So anyone living outside of basically New York, Boston, Washington or Chicago needs to have a car of some sort, regardless of their economic situation.

They have shoes merely because shoes are an item that can be produced extremely cheaply in third-world countries, and even cost only $2 to $5 in the US. But that's not the case for refrigerators and vehicles. The near-antiques being used by so many in the Deep South will break down soon. They won't be able to find parts, and won't have the skills or money to fabricate such parts themselves. They won't be able to afford new items, either, and likely won't even be able to afford heavily-used items being sold second-, third- or even fourth-hand.

You need to think beyond more than the present, and beyond more than one or two years. Look into the future. It will be very bleak. What's starting in the Deep South will spread to the rest of the US. It may take a while, but it will eventually reach the more civilized parts of the nation.

Re:That's just the beginning of the cycle, John. (1)

Anonymous Coward | more than 3 years ago | (#36494902)

BBC - BBC Two Programmes - "Welcome to Lagos" Is the Rags to riches story of the Nigerian rapper vocal slender. He literally lived in a dump and earned a living recycling metal clothes and glass. It is both uplifting and informative. After watching it there can be no confusion about what poverty is.

Re:That's just the beginning of the cycle, John. (0)

Anonymous Coward | more than 3 years ago | (#36494966)

Amen Brother.

Re:That's just the beginning of the cycle, John. (1)

jbplou (732414) | more than 3 years ago | (#36494858)

Do you live in the US? What about the huge middle class, sure some consider themselves poor because they only own 2 flat screen tvs but this is hardly a nation filled with poor. You can find some small European countries like Luxembourg that have almost 0 poor but I challenge you to find a large country with a situation like us, we are the envy of the world. The median wage in China is only around 900 per year per capita, they are no where near us. China is a country with very few rich and 100s of millions living in situations the poorest American could only imagine. In twenty years people lime you will be saying that the US is going to be taken over by India and forget about how supposedly China, Germany, and Japan were supposedly going to do this before and failed.

America had a free economy and culture of competion when combined with many hard working immigrants who are the best of their home countries we are an unstoppable juggernaught,

Not too long ago (0)

Anonymous Coward | more than 3 years ago | (#36494386)

Made by Japan was pretty crappy too...

Not the U.S.! (5, Insightful)

sootman (158191) | more than 3 years ago | (#36494390)

"The changing economics of Made in China will benefit both the rich and poor world."

It won't help the U.S! We keep demanding cheap goods, no matter how poorly made they are, and the only way to get that is to take advantage of poorer countries and manufacture overseas. Of course, that means there are no manufacturing jobs anywhere in the country, so in another few years, the only place in the U.S. where anyone will be able to shop or work will be Walmart.

On the one hand, you have the iPhone--built in China and it's an absolute miracle of modern technology. Have you SEEN one of those things on the inside? Rows and rows of tiny little dots on a board and I can't even guess what any of it does. I'm sure, given U.S. labor costs, it would cost a lot more than it currently does.

On the other hand, I don't know where to buy decent clothes. I bought a 12-pack of socks a couple weeks ago and three of them were mis-sewn. Every time my wife buys a 3-pack of underwear for the kid, she takes them out of the package, washes them, and 1 or 2 will come out of the washer--their first wash, having never been worn--with the waistline frayed.

I'm not saying that everything that is (or was) made in America is automatically great, but wouldn't it be great if people DID give a shit about the quality of what they made, and that the money would stay within our borders? But I think the opportunity to do good has passed. I saw Schmatta [latimes.com] a few months ago and that, too, is depressing as hell. It's the story of New York's fabled garment district and it ends with some fun stats: 40 years ago, 95% of clothing sold in America was made here. Today, 5% is.

The only thing America has now is an entertainment industry and bullshit I.P. laws. Oh yeah, and prisons and wars. And a bailed-out, fucked-up auto industry that somehow managed to learn almost NOTHING after they started loosing their asses in the 80s. (They started to regain their composure a bit in the 90s but then they just started making SUVs.)

Maybe I've seen Jerry McGuire too many times but I really would be happy owning fewer things that held together better and I would be more than happy to pay more for that. My parents bought a microwave within a few years of when they first became common (early/mid-80s) and it has been replaced exactly once, and that replacement is still in use. Sure, new ones cost less than $100 at Walmart now, but I've bought 3 or 4 since buying my house in the late 90s. I don't care if it costs less overall to live like this--money isn't everything. The Great Pacific Garbage Patch [wikipedia.org] should make anyone stop and think "hmm, maybe rampant consumerism isn't the way to go."

PS: we also, as a country, need to stop looking down on blue-collar work. Not everyone needs a college degree. We really need to have trade schools at the high school and college levels.

Re:Not the U.S.! (3, Interesting)

jcr (53032) | more than 3 years ago | (#36494456)

, I don't know where to buy decent clothes.

Norsdstroms. You get what you pay for.

-jcr

Re:Not the U.S.! (1)

whoever57 (658626) | more than 3 years ago | (#36494502)

My parents bought a microwave within a few years of when they first became common (early/mid-80s) and it has been replaced exactly once, and that replacement is still in use

I have noticed that too. I had a washer that was over 20 years old (I bought it used, all I knew was they stopped making them 20 years earlier). Its replacement lasted less than 5 years.

I believe that the US has seen big drops in real incomes, only hidden by low-cost imports form the US, but the real impact will hit when people realize that they have to replace supposedly durable goods every couple of years.

Re:Not the U.S.! (1)

Kenja (541830) | more than 3 years ago | (#36494540)

If you only have 50$, you buy a 50$ microwave that only lasts a couple years. People cant afford high quality merchandise anymore. And the low cost items will still be made over seas so long as we have such stupidly low trade tariffs.

Re:Not the U.S.! (1)

dgatwood (11270) | more than 3 years ago | (#36494662)

And then, because 95% of people chose the $50 microwaves, the $150 microwave market becomes unsustainable at that price, so they become $500 microwaves, then $1,000 microwaves, and eventually disappear from the market entirely, leaving nothing but the junk available for purchase. And this is why the consumer electronics market is in large part a race to the bottom, both in price and in quality.

Re:Not the U.S.! (1)

dgatwood (11270) | more than 3 years ago | (#36494632)

My washer's lid switch broke after about five years, but all it takes is a couple of twist ties to fix that. If your washing machine actually broke in a major way (burned out motor, drum leak, etc.), then you just got really, really unlucky. Most non-electronic hardware (even stuff built today) has a lifespan measured in decades except for minor mechanical problems like sticking timers that need to be oiled, Nader switches that need to be solder-bridged, etc.

Re:Not the U.S.! (1)

whoever57 (658626) | more than 3 years ago | (#36494912)

If your washing machine actually broke in a major way (burned out motor, drum leak, etc.), then you just got really, really unlucky

The main gearbox (with plastic gears) broke such that it was not economically replaceable. Using Google, I determined that this was not an unusual problem for that model (a Maytag) at about 4-5 years old. So, no, the only time I was unlucky was when I chose that model.

Re:Not the U.S.! (1)

AngryDeuce (2205124) | more than 3 years ago | (#36494784)

PS: we also, as a country, need to stop looking down on blue-collar work. Not everyone needs a college degree. We really need to have trade schools at the high school and college levels.

This, oh man, a thousand times this.

There's only so many white collar jobs out there. Everyone gets fed this idea that you go to college, get a magic piece of paper that says you're worth hiring, instantly get a job making a decent living, have 1.8 kids, white picket fence and it's all such crap. Maybe 30 years ago that was the case, but today it's actually the opposite. I have friends with Masters Degrees that are living with their parents working in retail because there's nothing else and they have mountains of student loan debt to pay off. Several people I know were going to school looking to become teachers that have since dropped out and just resigned themselves to working as waitresses full time, or delivering pizzas.

Meanwhile, people that everyone made fun of for not going to college right out of high school started their own companies doing things like landscaping and cleaning and such and are doing much better than the college grads. Everything we've been told is just so backwards anymore...

The only college grads I know that are really anywhere near where they expected to be when they started school are the people that went into nursing and health related fields. They're making money hand over fist because people are getting sicker as a whole, and costs are so inflated it's almost like the beginnings of a new bubble, the "Health Care Bubble". So sad...

Re:Not the U.S.! (2)

Falconhell (1289630) | more than 3 years ago | (#36494872)

Interesting about the student loans. Here in Australia we have a govt scheme called HECS, which comes into effect after graduation and starts to repay thru the tax system after a reasonable income threshold is reached.

We seem to manage this and public health care for all with ease, I wonder why the US cant do the same?

Small sample size? (1)

icebike (68054) | more than 3 years ago | (#36494418)

I'm not so sure I believe this.

When you consider the vastness of China and difference in economic conditions its hard to make general statements about "wages of manufacturing work" applicable to the country as a whole.

With modern, and mostly new, cities which are as up to date (at least in their core areas) as anything in the US or Europe, you also must consider that a great deal of the rural country people are still sleeping with their animals, and don't show up in any wage survey.

These rural people provide a steady flow of new recruits to work in Foxconn model factories, then shipped back home when they start making too many demands. Its unlikely this workforce will be soon exhausted, but what might be seen is a glut of ex-employees of such firms who don't want to return to rural areas, but really don't have any marketable skills.

Put your cursor on any portion of central china and zoom to the maximum extent of Google Earth. Farms and terraced hill sides as far as you can see, with very small dense villages situated close by. Most of these farms are not very mechanized, and while the labor demand is high, there are still millions of excess workers in these areas, which end up being warehoused in cities.

Not even around the coastal manufacturing cities do you see housing developments that indicate the inhabitants have anything but cheek by jowl housing in the most densely packed neighborhoods imaginable. You can almost count the private swimming pools in all of China on your fingers.

These people need something to do, and no signification portion of the manufacturing done in China will move very far before prices will come down. China is a factory, and factories have to have work.

The map is not the territory (4, Informative)

ameline (771895) | more than 3 years ago | (#36494486)

Have you actually been there? (I just got back.) Shanghai is an interesting place, that's for sure. Wages for university educated and skilled people there are rising quickly. (You can't use unskilled farmers as programmers.) At the present rate of growth, they will match North American wages for equivalent work in about 4 to 5 years. Now I'm perfectly prepared to entertain arguments that the present rate of growth is unsustainable, so lay them on me... (And explain how they won't also depress wages here.)

Re:The map is not the territory (1)

Antisyzygy (1495469) | more than 3 years ago | (#36494572)

Not necessarily unsustainable, but less and less people will benefit as they get richer.

Farmers are used as "programmers" in some areas. (0)

Anonymous Coward | more than 3 years ago | (#36494670)

You can't use unskilled farmers as programmers.

You should be careful with this claim. I've had the misfortune of actually dealing with offshore developers in India who were farmers before becoming "programmers". (I put "programmers" in quotes, because they couldn't actually program worth a damn.)

One fellow in particular was extraordinarily bad at coding. I mean, he had trouble declaring simple variables, and didn't even know what a function was. So I stayed up one night and called him directly. It turned out that he'd worked full-time as a papaya farmer up until he was in his 40s. Then he moved to the city, and somehow was hired as a programmer.

When it comes to offshore developers, you're often getting somebody with no practical education. You get people who have entered the field extremely late in their lives, without having any sort of useful background beforehand. Many of them don't even have what would be considered a primary school education in the US. It's no wonder the software they develop is so shitty.

Currency Issues? (4, Interesting)

ect5150 (700619) | more than 3 years ago | (#36494434)

Let's see China pull this off without constantly manipulating their currency to boost the manufacturing while keeping pollution half of what it is currently over those same 10 years. It's okay, because when inflation hits, the sh*t will hit the fan in China (look up the economic trilemma and see where China's weakness is... for the USA, we choose not to peg our currency to fix our trade gap).

Re:Currency Issues? (2)

Eightbitgnosis (1571875) | more than 3 years ago | (#36494702)

And what would the economy of the USA look like without manipulating our own currency by means of quantitative easing and record low interest rates?

We're both currency manipulators

Re:Currency Issues? (0)

Anonymous Coward | more than 3 years ago | (#36494978)

The prime rate for a time in the US was 0 zero percent - They were giving money to banks.
A few nights ago charlie rose interviewed the fmr treasury secretary, he says there is too much liquidity and inflation is next up.
Manipulating the currency is how countries get rich and provide wages. People like you and I are never ahead of food and rent never invest or get rich.

Re:Currency Issues? (1)

poity (465672) | more than 3 years ago | (#36494992)

I think the idea here is that there's no free lunch in distorting the economy, artificially strengthening one part will always make some other part of the system more vulnerable -- the invisible hand always catches up with you and makes you pay. To say things akin to "well the USA does it too" avoids the issue, I mean what conversational response can there be to that rhetoric, "ok we'll stop talking about it"? Give me a break.

Re:Currency Issues? (1)

Anonymous Coward | more than 3 years ago | (#36495012)

China loans us money so that we turn around and spend it ... in China. It's like they are using government money to create jobs for their population, but they don't just throw that money away, they make interest on it! Assuming we pay them back some day.

Brilliant!

Re:Currency Issues? (0)

Anonymous Coward | more than 3 years ago | (#36494724)

China has had such heated growth in the last several years that it has nowhere to go but down. Add in its own over heated real estate market and we're going to be seeing some real shit hit the fan - soon. And when the shit hits the fan, the Chinese leadership is going to be doing some really drastic things - think 1989 only this time, tanks will be rolling over people.

The terrors of globalization (4, Interesting)

goodmanj (234846) | more than 3 years ago | (#36494464)

People who oppose globalization should really think about this. In a couple of decades, the globalized economy has elevated a nation of a billion people from the bottom rung of world socioeconomic status to the solid middle ground. No question, the elevation of China has had some negative impacts on the economy of the developed world, but not so bad, really: the US economy has not collapsed during the process, and its manufacturing industry has been weakened but survives. No question, the process has had some negative impacts on Chinese workers, but nothing compared to the servitude, abuse, and death of the West's own industrial revolution. And finally, no question that political freedoms in China have not changed with the economic times, but I consider the *ability* to communicate a prerequisite to the *freedom* to speak, and the Chinese government may soon realize it has a tiger by the tail in that regard.

And consider on the other hand, the positives. A billion people are now able to live in comfortable housing, free of disease and pestilence, able to travel across the continent and participate in global dialogue. A good chunk of these billion people are now in a position to buy US-made products like World of Warcraft, Ford Explorers, and a million things made in China, but designed in the US by 3M, IBM, and Microsoft.

A rising tide may not lift all boats, and it surely doesn't lift all boats equally, but still, a billion boats is a damned good start.

Re:The terrors of globalization (0)

Anonymous Coward | more than 3 years ago | (#36494650)

A billion people are now able to live in comfortable housing, free of disease and pestilence, able to travel across the continent and participate in global dialogue

You're operating under the critical misconception that a whole billion Chinese have been elevated to high standards. (By the way, there are actually 1.3 billion now). In reality, no, they're not living in nice houses, traveling across the continent, or participating in global (or even regional) dialogue. The ruling class and the business class are living well, and the other billion are just scraping by. Further, the ones on top are largely the same families that have been on top for fifty years.

Re:The terrors of globalization (0)

Anonymous Coward | more than 3 years ago | (#36494652)

the US economy has not collapsed during the process

Where have you been for the past four years? Living under a rock? Or swimming in your money vault, a la Scrooge McDuck?

The U.S. economy has absolutely collapsed. It's just not reflected since the wealth of the wealthiest continues to grow. But the rest of us are hurting. Bad.

The good news about this: (1)

drolli (522659) | more than 3 years ago | (#36494478)

China seems on good way to actually equalize the incomes a little bit. Creating a working internal Martken is good for them and good for the world.

And I want a pony! (0)

Anonymous Coward | more than 3 years ago | (#36494480)

And we will all have one, whether we like it or not!

14% increase of $1/hr = $1.14/hr (2, Interesting)

Americium (1343605) | more than 3 years ago | (#36494510)

With technological advances I would hope Chinese workers see some of the benefits from high tech production facilities combined with new infrastructure.

The US has a minimum wage well over $5/hr and for long hours manual labor it's about $10/hr for minimal skill work. In China it's now approaching what? $1/hr? Wow, a whole 14% increase in that per year? So in 15-20yrs their wages will compete with ours. I'm sure the petroleum costs just to ship products here has been a bigger burden to manufacturing companies.

People say they are taking over, yet I still haven't seen anything new from China, it's all designed in the US and Europe. Until we start importing high speed trains, I see China just as a jewel of cheap labor. Let's hope at some point they are developing high tech products for us and cheap manufacturing leaves, but I think it's going to be another 20 years before that happens.

Re:14% increase of $1/hr = $1.14/hr (1)

smash (1351) | more than 3 years ago | (#36494810)

Be that as it may, the money is moving to china. The clever people will go earn money where the money is. The US has been living on borrowed money and time for far too long and eventually people will lose confidence in the dollar (its already happening, our exchange rate in AU has gone from $0.70au:$1usd to $1.1au:1usd fairly rapidly) and stop extending any more credit.

Once that happens, the US will need to work to repay its debts without any more spending.

Re:14% increase of $1/hr = $1.14/hr (1)

Americium (1343605) | more than 3 years ago | (#36494910)

The clever people would much rather stay in the US, but we kick them out every year due to VISA restrictions.

We have what, $100,000 of debt per working adult? at less than 1% interest. Let's start with $2,000 a year payment, that'll do it in less than 100 years at 1%. Or we could just not pay anyone back, that works too, just default on it all. Or add 2% inflation, keep interest at 1%, and our debt decreases every year with no payment. So worst case scenario is a 2% tax hike, I could live with that.

Smart money in china? So there's new software from China? New hardware? New cars? New seeds? New materials? New tech breakthroughs? Gimme a break, they need more than a decade to catch up. Once they are caught up, they have their whole 30% more guys than girls debacle... let's hope humans turn gay in those environments (unlikely, we aren't fish) or it's going to be a mess.

Re:14% increase of $1/hr = $1.14/hr (1)

Falconhell (1289630) | more than 3 years ago | (#36494892)

Wow, a whole $5 per hour! What an incredibly rich country. Here in .au it is about $15/hour. And I thought the US abolished slavery years ago!

Re:14% increase of $1/hr = $1.14/hr (1)

Americium (1343605) | more than 3 years ago | (#36495006)

I have to say it, OMG! I'm moving to Australia, that's $30,000/yr for 40hr work week, minimum wage. That's unbelievable, I just deleted my rant about not being able to legislate wage increases, apparently you have done exactly that, amazing.

Cheers.

I love the article (1)

ILongForDarkness (1134931) | more than 3 years ago | (#36494552)

"In what is supposed to be a land of unlimited cheap labor". Everything has a limit. The thing with China is that most of the manufacturing is happening at the coasts. People migrate in droves but this drives up the cost of living. Wages rise and eventually will be come marginally competitive. Similarly moving things to Cambodia, Vietnam etc. Eventually the flood of money will cause prices to raise negating some but perhaps not all the benefit of outsourcing there.

You can look at it at a company level too. You offer 1/4th the price to win the contract. Next renewal you offer 1/3rd etc. Always cheap than other options but getting closer and closer. Not doing that you are just giving away money. You only need to come in low enough to win the contract any more and your throwing money away.

Horsecrap (0)

Anonymous Coward | more than 3 years ago | (#36494640)

"...and Chinese students paying high tuitions to our cash-strapped universities."

The United States would have to have internationally recognized top-notch Universities and while there are still a couple considered acceptable internationally for the most part the international intellectual community considers the Universities in the US to be second rate at best. Forget about exporting US education, that ship sailed ten years ago at least.

There's something that everyone's forgetting... (1)

luke923 (778953) | more than 3 years ago | (#36494708)

Chinese wages haven't really gone up -- the US Dollar has been losing value. In other words, the Chinese aren't getting richer -- we're getting poorer. This is why Hu Jintao wants the Dollar to no longer be reserve currency.

Hmmm. Vietnam vs China (1)

Maxo-Texas (864189) | more than 3 years ago | (#36494748)

Yea... I can see Vietnam absorbing China's manufacturing.

Let's see...
87,279,754 Vietnamese.
1,331,460,000 Chinese (in 2009).

There may be a SLIGHT difficulty here.
Same for eastern european countries.

Now.. Africa has 1 billion people... so far so good.
But it's 54 countries with 54 legal systems.

The rule of law doesn't really hold in many of those countries.

I'd say China will draw jobs from the US for another 4-6 years. Then the bigger threat is automation and robotics. Already businesses are buying hundreds of these things to replace humans and the annual operation costs are about $15,000. They can work 2 shifts for that.

Re:Hmmm. Vietnam vs China (1)

smash (1351) | more than 3 years ago | (#36494820)

Don't count russia out. Moscow is currently the most expensive city in the world to live, and Russia has a decent number of people. The chinese can sell to the russians just fine.

Re:Hmmm. Vietnam vs China (0)

Anonymous Coward | more than 3 years ago | (#36494852)

But it's 54 countries with 54 corrupt legal systems that are easily bought off with pocket change.

There, fixed that for you.

what's next (1)

smash (1351) | more than 3 years ago | (#36494768)

... is that the chinese have all the credit, the USA has all the debt, and they farm out work to the USA's totally fucked up jobless economy for cheap(er than they earn).

This is where the USA repays its debt (from living on and inflating markets with borrowed money) to the world, Good luck guys, its not going to be pretty.

Quality? (1)

Renraku (518261) | more than 3 years ago | (#36494840)

My guess is quality will go up as manufacturing leaves China, where it is encouraged to do ANYTHING for a buck and isn't unethical to take/gives bribes.

That should not keep businesses from outsourcing (1)

dindi (78034) | more than 3 years ago | (#36494874)

Your government putting a crazy-bigass-TAX on companies who take jobs outside the country would.
FYI: they rest of the world is watching you and wondering WTF is happening over there. And this is one of the reasons among many....

And We Continue Sliding Towards Marginalization (1, Informative)

damn_registrars (1103043) | more than 3 years ago | (#36494914)

Chinese wages are increasing 12% per year, while real wages in the US are decreasing every year. Soon it won't matter whether or not China buys us out, because we won't be able to afford their products anyways.
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