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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'."
What next. If China can make it for $40, I'm sure India can make it for $20, (may be next decade or so), whos's next??
We want cheap computers, but don't care for politics. Lets use (next to) slave labour in a communist contry!
My biggest problem with semi-conductor companies producing in 3rd world contries is that these factories do no require much manual labour so the money saved isn't that much. Of course land and construction will be cheap.
It is also nice to see the communist government claiming to be more "fair" letting the "evil" market economy enter whenever it is profitable. This makes them even worse, clinging to a lye preventing the people to gain privileges and a better standard while letting the "right" businesses in. I can't help it, but I suspect that bribes and corruption is very wide spread in this kind of areas.
Amazing what sort of price break you can achieve using near-slave labor.
Paul Lenhart writes words!
EricKrout.com
If you celebrate Xmas, befriend me (538
But is the quality of the $40 one made "just outside Hong Kong" the same as the $100 made in the USA?
Why always raise these political issues when discussing about china? The article has nothing to say about overseas chinese going back for business to "reclaim their property" or whatsoever
Why talk about politics when it is supposed to be a business/tech article?
And why is it modded +4? Do we have to rant about China's history everytime its name appears on Slashdot?
"It works" only if you are looking at the equation from the point of view of money. As the book "No Logo" explains well, there are similar economic zones in vvarious developing countries around the world where people are exploited to produce things at extra low prices so we in the West can get our fix of technology/fashion.
China has a terrible record on human rights and so is a popular place to set up sweatshops. The fact that they are owned by Taiwanese immigrants makes no difference - an exploiter is an exploiter no matter what their race!
I just wish there were more examples of companies using these services listed in the article so that we knew who to boycott!
A little planning goes a long way...
The article says "It's a postmodern waste-scape of continuous urbanization, broken only by the occasional glass spire of a luxury hotel." Try driving from SF to San Jose down the 101 and you'll get the idea.
I liked the No Logo book. Naomi Klein takes examples of child/slave/appalingly cheap labor for making IBM hard disks (if I remember correctly). She mentions China as one of the top countries for cheap, slave AND child labor.
Let's hear it for China!
I'll do it for cheesy poofs.
Every company I've heard of doing this, and every programmer I've talked to that's had to work with these third-world outsourcing companies, has had absolutely nothing good to say about it. There may be exceptions, but in every case I know if it's nothing short of a disaster.
First, there's the distance problem. Having disparate groups from across the world work together in free software or academia is possible, but it doesn't work in corporations. The cultural and political barriers cause more headaches than is already prevalent in the corporate world.
Second, there's the time problem. It really is hard to work with people on the other side of the earth because your schedule rarely overlaps. To have any meetings, someone has to come in early, or someone has to stay in late. Turnaround time for any question takes days instead of hours (for same time zone) or minutes (for the next cubicle). When facing corporate deadlines this can really bite you.
Third is quality. I don't want to sound pompous and say that third world programmers are no good, but usually they are no good. The good ones have left and have come to the first world, or are in universities studying to come to the first world. They're not going to be sweating away doing the same job in the third world getting paid 1/4 of what they can get in the first world. You can get away with that for lower class labor, who can't afford a plane ticket or immigration costs, but for university-educated third world, they have a reasonable capability of coming to the first world.
Fourth is culture. It's really, really hard to work with people who don't agree on culture; by this I mean work culture, not necessarily the same thing as culture in general. It's the reason sales and development in the same office are so often at eachother's throats. Even though developers in the first world come from all different backgrounds, countries, and cultures, there is a common work ethic among good first-world workers. The third world is often much more laid back, and people don't react to schedule pressure in the same way you might expect. There are more misunderstandings which hinders the group from working together.
In summary, there are several key problems with outsourcing brain power to the third world that prevent it from being a success. The real core of the problem is that, contrary to the views of many executives and MBAs, intellectual workers are not assembly line workers and cannot be managed in the same way. Programming, or brain work in general, is not a repeatable, repetitive, explicitly definable operation which can be performed by unskilled laborours in any part of the world. This makes it especially unsuited to third-world outsourcing.
If you or your company is considering this, save yourself a lot of headache: "Just Say No".
The people in the US that were willing to work all sorts of hours.
About fifteen years ago they were saying the same thing about Japan and look what happened. The American advantage is adaptability -- the ability to see a threat to their industries and respond forcefully. Again, in the case of Japan, the domestic auto industry transformed itself within a few years after seeing that the Japanese were providing what people wanted: cheap, reliable cars.
Now China has the most valuable resource: cheaper than hell labor.
Many companies that export labour under free trade agreements discover that paying 50 cents an hour gets you 50 cents an hour worth of labour -- in other words, it makes sense to pay higher wages to better-motivated workers, because the goods they produce are of better quality.
Toronto-area transit rider? Rate your ride.
Amen brother.
I doubt that China will let freedom of speech reign supreme. Does anyone think these people want to make anything but crap wages their whole lives? Give them a better life, and you'll have the whole system collapse when they want something more for themselves.
Yes, I know the counterargument about this one. Heard it a lot. "Blah blah best wages they ever had blah blah." So here is my response.
Don't you want to make better wages right now? Doesn't everyone? What if they want to unionize? What if they want to speak out against unfair working conditions? What if the corporation is going to have unsanitary and toxic byproducts spilling out all over China...
No wait. We know that one already. Pollute away. Happens everywhere in starting industry. As long as the PRoC gets a little profit, its all good.
I am not saying that it isn't good for the Chinese people that they are getting manufacturing jobs. I am saying that we should excourage them to be as free and open with their work as everyone else. That we should not be satisfied until everyone is livign a standard liek we are, if not better.
Honestly, I really hate the idea that just because a bunch of people live under a jackboot thug regime, it means that they we somehow desrve to be better off and recieve the fruits of exploitation.
If the manufacturing is taking place in China and the money is going to China who is going to be able to buy the product?
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.
As I sit here and look at my compter:
UNIX/Linux Consulting
That's just too damn many people. Apparently, they can make those 40 dollar items by brute force. Hell, they could make diamonds by having everyone pile on a piece of coal.
Anything you can make, We can make cheaper-
/.ers suggest to contribute to the solution? Stop buying consumer goods made in China? Write to congress? To be honest, it seems rather hopeless.
We can make anything cheaper than you!
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Now seriously. This is really sickening:
No reliable legal system enforces contracts. Theft of intellectual property is routine. Business disputes are often settled by hired thugs; on occasion, those thugs are the local police. But though it can feel like Dodge City, Dongguan works more like 19th-century Manchester, as perhaps the world's most extensive and systematic exploitation of transient labor by mobile capital. And the people who oversee this system -- and profit handsomely from it -- are the officials of the world's largest Communist Party.
While I am not an blind supporter of Amnesty International, I think they are spot-on with regard to China."
We have normalized trade relations with them, coddled them, and deceived ourselves under the banner of "engagement." We should not accept super-cheap components as a result of slave-labor or child-labor. Communism is bad enough, but now we have the worst of both worlds - totalitarian communism and ruthless robber-baron-style capitalism.
Let me be clear - I have nothing against Chinese people, just their government's practices.
What do
Yes, it's a blog. Sorry if that offends you.
that many of the West-based posters here talk about inexpensive being bad quality and Asian factories ran as sweatshops. It's in the political environment many of you were raised in.
Almost all your political foes are of opposing principles from which you hold. Wake up call: your ideals (often misquoted as democracy) are not as free as you see it.
</offtopic>
These sweatshops amount to a whole lot of (for example) the electronic things you use. I dare say that the computer you're using right now also contains these cheap components. Without these inexpensive products, the US economy no matter how massively independent you thought it was, won't be the way it is today. Why do you thing that China (which has so many times be flamed as a human-rights offender by the US) is a preferred trade partner? I guess when it comes to making uncle sam's pocket fatter human-rights can fuck off and die.
Now think before you post anything mindless like sweatshops and poor quality goods from China, Taiwan or any other Asian economy... your lovely AMD processors too come from an Asian country, Malaysia.
Welley Corporation - SLM Scammers
There are around 75 million urban unemployed in the PRC. There are about 150 million "surplus rural" workers. That makes about 225 million people who are simply idle. If they can make *enough* sweatshop jobs to take most of these unemployed out of circulation, wages will start to rise but it's going to take a lot more changes in the legal code to make that happen.
It's a slow process to make a capitalist country. Hopefully, the PRC will make it with a minimum launch of nukes along the way.
There are 225 million chinese unemployed (counting both rural and urban unemployed) in the PRC that would desperately want these jobs. Out of an estimated 800 million strong labor force that works out to about 28% unemployment. The unemployment rate in the US, last I checked, was 5.9% and people are already very nervous about jobs, nobody's hiring, people are taking a lot more abuse from their bosses, etc.
Get real. As long as PRC employment is so high, people are going to be scared to lose what they have. So what kind of companies are going to go to such a country where the politicians are all corrupt, the bureaucracy is mind numbing, and objectively the whole government has no business being stable with multi-year 20%+ unemployment levels and growth petering out? You betcha you're going to see lots of sweat shops. If the world's really lucky we're going avoid seeing the prospect of a chinese civil war complete with nukes tossed around. But we need to be very lucky for that to happen.
Ah, yes.
You see, a few people protesting sweatshops *do* have a valid point -- if what they're doing is specifically trying to get existing sweatshops to pay out more money.
The thing is that the entire movement was started by and is a tool for the US labor protectionists.
What you're doing right there neatly falls into the propoganda being put out. You're trying to avoid countries with "unfair labor laws" *entirely*, not trying to figure out what companies there pay their workers more. You're simply avoiding non-US products.
And in doing so, you cause far more damage to the "poor, exploited" foreign workers than the Nike-buyers. You see, the reason those workers are working under such extreme conditions is because they *have* to to avoid starving. Companies can get away with said wages because people there are *starving*.
So, you've been swayed by AFL/CIO images of "giving a poor, exploited foreign worker better wages", and are ending up depriving them of jobs and starving them. Wonderful.
Until there's a labor *shortage* instead of surplus in said countries, there will never be wage increases. Not going to happen.
Ironically enough, buying products from companies with production facilities in said countries is likely to help the workers, since it increases demand for local labor. If the levels of demand can produce a labor shortage...then sure enough, wages will rise.
Any other solution, like government-mandated minimum wages, just produces inflation, as the enconomy corrects itself to keep the buying power of those on the bottom the same.
May we never see th
Trade the word Taiwan for the US and "renegade province" for "nation" and think on that for a moment. We are gleefully tearing our manufactureing base apart for cheap labor and the resulting cheap goods. Once the conversion is complete and our nation is 90%+ 'consumer' and 10%- 'producer'.
What does that bode for the US? What does that bode for the Western World in general?
I think that the long term effect for China is that the nation does change into something else. Too much money, influence, and information is feeding into that nation from the "outside world" their wall will fall too. What the long term effect is for the West? I do not know.
Grimwell - old, cranky, mean, obsessive
Programming, or brain work in general, is not a repeatable, repetitive, explicitly definable operation which can be performed by unskilled laborours in any part of the world.
Actually the higher the quality control, the nearer programming becomes a repeatable, repetitive, explicitly definable operation. Unfortuantely this also makes it extremely boring.
I've done programming for "mission critical" systems for some major international banks. The scope for creativity was zero. Everything has a precise methodology, down to the last full stop, and everything was checked and rechecked. As a creative person, it drove me nuts. But I could see it could be something that would be ideal for outsourcing to China or India (which is what I believe many banks now do).
No, no you got it right the first time, dump as much trash as long as the cash flows on in.
The thing most people forget was that alot of the modern industrial countries had to go through this phase to get to were they are. Somehow people believe(especially in the US), that the poorest of the poor countries should start at the minimum standards that we are currently are at, instead of realizing they ain't got no money.
Do I like the fact that these people are treated horribly, paid poorly, and live and work what we would consider a hell-hole, NO! The thing everyone seems to ignore is how to develop a developing economy. The two things China has going for it are cheap labor and are willing to ignore environmental controls, that is really what China is trading, no matter what they make
Who said RCA was well built in 1975? Sony cleaned up the electronics market by 1985 by making stuff that was superior.
Today, much of what Sony does is not superior because they have opted to use Chinese slave labor. Seen a dream cube lately? Twenty years ago they were rock solid with a flourescent tube display that auto dimmed but was bright enough to see in daylight. Today, that same machine has a poorly fitting switch and cheap LEDs for a display. But then again, who esle is making anything? The dream cube sits on a shelf next to an even more repulsive RCA from a similar factory.
Wait did I say "slave labor"? Yes I did. China is a command economy run by a party which will enforce it's line by death. No dissent is allowed because there is no free press. Workers may flock to this place, but that is because they are left with few alternatives. Comfort is realative and people are easier to control when you make things we take for granted special and only for the privaleged. Most people, even the special ones are have little choice about what they do. As in 1984, purge is continual for the special.
This system is only working for a few, and only because they have a free economy to sap. Look at the former USSR, now that you can. They had a highly technicaly educated society, yet most things we take for granted were rare, vehicle ownership, TVs, even radios in a country that would love for everyone to have propaganda everywhere! Most if not all women were forced to work so child rearing was communal, as it always was for peasants in Russia. The command economy works by creating artificial scaricty. Without trade with free economies, most ordinary people lived only to labor in what we would consider poverty. This in a country with more land mass than any other and vast resources. Bigwigs lived well, sent their children to good schools and risked a bullet in the back of the head. Communists are always like this. The only difference betweeen China and the former USSR is that countries of the free economies are dumb enough to risk all their capital in a place that will surely take it all when the money stops flowing in.
The article sums it up nicely as it tells us the sickening life of self abuse in wine slop the lucky live we pay for and then the average story. This is you, and the woman is your would be wife:
In background and motives, these workers differ little from Zhang Ping, the hostess at the nightclub. She graduated from high school in Harbin but flunked the college entrance exams (only about half of test takers pass). For two years she worked for 200 yuan a month in a state-owned wholesale company, but it went bankrupt. Then she tried a stint behind a sales counter, but no one was buying much in a city with 25 percent unemployment. Finally, a girlfriend from down south wrote to say there was good work at the nightclub.
Free room and board for slaves and whores who work overtime everyday, how repulsive. That's what you get without laws, contracts and free speach. Surely our trade with such an economy is dragging us down more than it's lifting them up.
Friends don't help friends install M$ junk.
I disagree- the US became a super power because of World War II; it was a watershed event for this country. While the rest of the world was taking turns blowing up each others factories, decimating their populations, and sowing the seeds of political strife we were ramping up capacity, production, and developing business. The US is a super power for one simple reason- economic power. Think about it- we don't have the largest population, the most educated population, or even the longest life expectancy. We just out spend (usually on R&D) every other country in the world on defense; we even subsidize other country's purchase of our arms, regardless of ethics, to protect our economic interests. Money is the master of (ORWELL=offense)"defense"(/ORWELL). Why are your tax dollars spent in this fashion? Corporate lobbyists own our government.
At the end of the day though, what matters to a country is manufacturing, products, such as software, cars, widgets, etc. It doesn't matter to a country how well your software streamlines production, how many widgets marketing & sales can distribute, or how efficient the line can be if you're not paying employees in your own country to then buy those widgets. Third world countries are smart to follow in Japans footsteps. I know that this is a complicated issue, but I sometimes feel that the relentless American profit machine is its' own worst enemy.
Great occasions do not make heroes or cowards; they simply unveil them to the eyes. -Bishop Westcott
Anything you sell us for $40 we resell for $100 elsewhere
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Just how are you going to boycot?
I doubt many people will pay $300 for a mobo and
$600 for the processor just so some guys in china they never heard about will make money.
So, for $200 you'd be willling to sell your fellow human beings into serfdom.
Post may contain irony: discontinue use if experiencing mood swings, nausea or elevated blood pressure.
--western businessmen hauling their assets to china are short term thinkers and profiters who care not about anything but money. They sell their soul for a few more dollars. This IS going to bite all of them in the butt when china is strong enough and decides that the middle eastern oil fields are their's for the taking. And every time a US company closes shop, lays off and fires workers and moves to china, they also layoff and fire customers. And all of them doing it? The US is headed towards utter bankruptcy soon, IMO. We got strong and grew the world's largest and most successful middle class by being a manufacturing country, and trading within our own 50 state "common market" union. We bout/sold/traded with our neighbors inside the States, this WORKED and worked well for many years, but NO, got to let some CEO's suck down a few zillion more.
/rant
Bottom line it's a heinous security risk being financial enablers of china-just read their own public docs on who they consider their prime enemy, and we are destroying our economy and improving their's as fast as the fatcat CEO's can pull the plug and move to china for a few years short term profit, which will dry up eventually as even at reduced prices with no one working no one will be buying anything. If this move to china crap worked, we WOULDN'T be running a hundred billion plus trade deficit, so there's the dang PROOF it don't work. the only thing china is buying from us is advanced tooling to make more tools and to get stronger, while we layoff people, close factories and become dependent on them. this is NUTS!
And they slap lie about so many things, take unemployment figures. They don't count long term unemployed who have exhausted unemployment insurance benfits but are still unemployed. Try doubling the "official" US dot gov figures for a more realistic number. Cost of living-try re-adding in food and fuel like they REMOVED from the official US dot gov data figures a few years ago to keep the numbers lower than they really are. And how about the corpro/fascist theft of money where the "government" give tax breaks to companies moving to slave/serf nations like china? If that ain't a ripoff or whut. Takingmoney at gunpoint out of Joe USA workers pocket so the company he works for can have their management close shop and move to china. ya some real mastermind economists at work there on that one. short term thinking leading to short term profits and long term DISASTER.
And freeking illegal alien invasion, completely totally irresponsible and out of control, T-totally. Our small county has to build two new schools and the hospital is seriously running in the red to support the masses of ILLEGAL aliens who moved here in just the past few years and get away with breaking the law. A few local big fatcats make money off using these people, everyone else gets their property taxes raised to pay for these profits. Regular folks who only a few years ago could afford a very modest home with one spouse working and the other actually raising their children at home like God intended now have to work two jobs for the same place and have their kids dumped into the lowest common denominator brave new world creche "daycare" where strangers raise your kids. Ya, compete my butt, hard to compete when it's ignored the "recent arrivals" live 12 to a one bedroom apartment, run the same twelve from the same old ratty van with some plate slapped on it and no nuthing else.
The "second worlding" of the US is in full swing, won't be long before there is little left of the middle class. I am old enough to remember any normal blue collar job could afford home ownership, car, and a flock of kids, now that just ain't happening too much more. These globalist goons want a two class society, I call it technofuedalism, the elites, then everyone else. Throw the serfs a few bones now and then and use their mercenary paramilitarypolice to keep the populations in check, EXACTLY like china, which is their model poster boy nation setup. masters/serfs. Gee what a swell model to emulate-NOT!
Here is decent url for anyone interested in being part of the solution rather than the problem when it comes to purchasing products.
http://www.buyamerica.com/home.asp
As to the rest, we have an election coming up, do research see how your local congress critter bozos have been voting on freedom and on USA-first economic issues, and vote accordingly, ignoring those stupid D or R labels. If needs be vote third party or independent, ANYTHING but voting in the same old tired and disastrous loyal to the NWO bozos we got running things now if at all possible.
I think you missed what I said. I meant that people the whole world over need to live better. I don't disagree with your points. Nor am I some kook lefty. If I was a kook lefty, I would assume that everyone around me is not as eduated, blindingly noble, and clued in as I AM. I don't believe that at all.
I beleive we should never be satisfied with other people in terrible poverty. Just like the USA is never satisfied with a country until elections occur. As for the Chinese people... MORE POWER TO THEM. As for the Chinese government... screw them. If that make me a lefty, then you really need to establish a difference between what a lefty and a hardcore, freedom nut righty like me really thinks. Cuz it ain't the same.
Also, food aid is usually a UN situation, the last time I checked. Those derelict-duty model-humpers in the UN can't keep their own countries in check, and then try to pass legislation that is biased against those that can.
Oh, and if your nation has a name that has not changed since the time before the bible, Torah, or the al'Quaran, perhaps you need to be taken off of the "developing countries list." That isn't development, its retardation.