Hardware Manufacturing in China's 'Hot Zone'

solferino writes "'Anything you can make for $100, we can make for $40,' Chen says, summing up his commercial philosophy. An interesting profile in Wired magazine of the computer hardware manufacturing 'hot zone', situated around the pearl river delta in mainland china, just outside Hong Kong. The factories are mostly financed and operated by Taiwanese business interests. The article looks at life and business in the city mainly from the point-of-view of these 'foreigners'."

Comments

Foreigners?

[Anonymous Coward]

Overseas Chinese, especially Taiwanese, are not foreigners. Many of those over 50 were born in Mainland China. They're returning to their native land and regaining some of the money and property that was unjustly stolen from them.

China Activity

[webword]

China is extremely hot right now. I know for a fact that many companies are getting serious about sending their manufacturing to China for cost reasons. Also, the Chinese market is growing at a rapid clip. It won't be long before they are sucking up as much oil as we are, and expecting a higher standard of living.

This might interest some people: The New Silk Road - Secrets of Business Success in China Today. As I indicate in my review, I think the book is good, especially for people who want a 30,000 foot view of doing business in China. I also liked Chinese Business Etiquette: A Guide to Protocol, Manners, and Culture in the People's Republic of China (ISBN: 0446673870). This Etiquette book is more ground level, "tactical", and person-to-person. Combined, these two books will give you a good taste for doing business in China.

In any event, I know that going offshore is having an impact. Not just in manufacturing, but in other areas too, such as programming. It is strange to see whitecollar jobs fly away from the U.S. to places like Hungary, India, Russia, and China. Why? Well, when I was younger, I thought these "brain" jobs couldn't be easily replaced by lower cost labor. Well, that's just not true. The internet has had a lot to do with that, of course. I'd be interested to hear what other folks have to say about outsourcing "brain" work.

Less Cost vs. Cheaper

[ackthpt]

Anything you can make for $100, we can make for $40,'

Sounds like the reasoning behind something mentioned under the Power Supply Review, a couple days back, regarding produce it fast enough and let quantity make up for the high failure rates.

Re:quality?

[tzanger]

But is the quality of the $40 one made "just outside Hong Kong" the same as the $100 made in the USA?

Having worked with several US and Taiwanese manufacturers, I would say it's a toss-up. Some US manufacturers are far more expensive and the quality is so poor you'd think it were assembled by chimps.

Been there this past summer.

[jedi_gras]

Hey, as someone with first hand experience in Dong Guan, Guan Dong, Shen Zhen, Hong Kong and other manufacturing centers of China, I can say that many posts so far are ignorant ramblings of naive posters.

I don't think that you can judge one area of China because a article on the internet says it's corrupt. You should all visit and see first hand. It's not THAT bad...

So the real scoop...

workers live in factory/housing complexes and can be forced to work 24 hrs/day.

food is cooked in 1.5 meter diameter cauldrons, stirred with shovels, and stored in barrels.

karoke parlors are great places to wind down and there are some really upscale places with shows, music, and lots of entertainment. (sauna's or discos may be more iffy)

business deals are sealed on handshakes during business meetings at nice karoke clubs.

the average salary of a Educated College graduate programmer is around 2000US annual (decent for the cost of living and government subsidized housing).

Anyway...you get the idea. It seems crappy to us, but we are all spoiled. In reality, most of non-industrialized China is worse off. The most horrible thing is the general air quality and water quality...I thought I was gonna die and I couldn't wait to get back to the US.

For general reference, the primary customers of these "sweat shops" are industrialized countries...I saw game boards, AOL CD tins, halloween decorations etc...Container after Container after Container was being shipped out from the port in ShenZhen and in HongKong. Ever wonder why the west coast port shutdown affected us so much? Most of our shit comes from over there. It's cheaper to produce there than probably in any other part of the world. You just need to "Guanxi" or network really well and get in the goverment loop and not piss off the gangs there and you'll do fine.

I hope everyone is a little more edumacated about this here area of the world. Now go visit, play dice games, drink, and be merry. After all, if you are going to buy all the shit (ram, computer cases, clothes, toys etc...) then you are the ones driving the economic disparity..so you might as well go and see and at least be concious of what really goes on. I did, and I don't think it's too terrible....does that make me a bad person?

Re:Who has $40?

[keyed]

For example, we are constantly seeing people being made redundant, unemployment rising throught Europe. I can only assume that the US is also suffering. In the long term if the production of most of our goods ships to China, the wealth of the nations will also be shipped there too.

That leaves us in the "West" impovrished, disenfranchised and unable to purchase any of these goods. Sorry to be gloomy but this is NOT good news.

A lot of manufacturing already left the US, starting in the 80s. While it did take a lot of jobs out of the country, the US economy has compensated and become more of a service economy than manufacturing.

If you live in Europe, I'd be worried. While the manufacturing is of much higher quality than China, the quality of Chinese goods can only go up in time. Japan did it, and now it's happening to them in turn.

Japan has been floating in and out of a recession for the last decade and while it's their banking system that keeps them in it, the fact that Japanese corporations are moving their manufacturing out of Japan with no signs of new jobs being created to replace the ones lost doesn't help.