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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'."
Let's hear it for sweatshops!
May we never see th
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.
What made the US a super power? (Besides the threat of Nuclear War) The people in the US that were willing to work all sorts of hours. The US became the Hegemony because the US culture has, to varying degrees, penetrated every other culture in the world.
Now China has the most valuable resource: cheaper than hell labor. Now all China needs is to reinvent its culture (again, for the umpteenth time) and, again, the middle kingdom could be the Hegemony.
Well, anything you can make for $40 I can break for free!
Beat that!
---
"The chances of a demonic possession spreading are remote -- relax."
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?
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.
How to Download YouTube Videos
American Translation: Anything that you can do for 100 dollars we can do for 40 but now its gonna be made out of cardboard, cheap plastic and rubberbands. Maybe a paperclip or two if necessary.
Yes, lets all assume its slave labor.
My father-in-law, now retired, was an electrical engineer in China. He made a decent living, by Chinese standards. How much did he make? About $125 US a month.
THAT is where the savings are coming from. You're paying 20 times as much here.
"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...
See picture on the first page of the story.
Is that a mouse in your pocket, or are you just happy to see me?
Man, if I had benefits like that at work, I'd work harder too!
When I was working for a designer lighting manufacturer as a network admin, we were currently in the process of moving our manufacturing process out of Germany over to China, for the simple reason that it was A LOT cheaper. Now, this isn't even electronics, merely simple electrical work w/ designer casings. However, I noted many a time that the German versions were much higher quality than the Chinese varients, though the Chinese ones were often 2x - 4x less expensive, though not 2x worst than the German ones. As far as electronics go, this is not surprising, but quality control is a MAJOR issue here. Things like Abit's exploding/leaking capacitors and such are signs of shoddy parts. There is NO point to buying something for 1/2 the price if you are going to have to RMA it in under a year.
"What can a thoughtful man hope for mankind on Earth, given the experience of the past million years? Nothing." -Bokonon
People that willingly enter into contracts can't be called slaves....it's an insult to people who actually were/are slaves.
If you were to remove these so-called "sweatshops", do you really think life would suddenly improve for those working there? Don't you think that those people might actually know what is good for themselves better than you do? I know it's hard to imagine...but try. If someone takes a job making what we consider to be very low, then it must be better than the alternative (for that person)...else they wouldn't have taken the job.
A modern day witchhunt.
"any ting you want."
"Anything?"
"Anyting"
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.
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
...manufacturing 'hot zone', situated around the pearl river delta...
Reading this gives me creeps, even though I'm not a radical tree-hugger. Seriously, what are the policies of the Chinese government on industrial pollution? Let them all dump as long as cash flows in? Or something more sensible?
My exception safety is -fno-exceptions.
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!
--
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.
The main gripe of these MBA's et al seems to be that their counterparts graduating across the Taiwan Strait in China seem to be lined up for fat salaries (China style) even before (now where do we remember this from?) graduation or (horror) are even dropping out of college just for the money.
"'Anything you can make work for 1 year, we can make work for 4 days,' Chen says, summing up his commercial philosophy.'"
War crimes, torture, lies, illegal spying... Would someone give Bush a blowjob, already, so he can be impeached?
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
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.
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 $200 you'd be willling to sell your fellow human beings into serfdom.
Post may contain irony: discontinue use if experiencing mood swings, nausea or elevated blood pressure.
As an expat who has lived in Asia for 11 years, roaming factories and companies both low and high tech all over the region, I must say that this little expose` on Dongguan was pretty damn accurate. The article and several posters did, however, miss a few points:
1. The savings these mfg companies realize compared with US or European based is not only labor and tax. Industrial environmental waste processing is next to nill in Southern China. The place makes Taiwan look like a park refuge, and I tell you, Taiwan is no place for a scenic vacation unless you are into touring large polluted industrial zones, most of them abandoned now. For most tech companies, waste processing is a large cost, sometimes MORE than labor in industrialized nations. That is why so many fabs get moved over.
2. Software piracy is an issue, but it is not SAP, Oracle, Sun and our favorite M$ that lose out the most. Most of these Taiwanese companies are using native Taiwanese ERP software. About 50% of it is pirated, and the other 50% is licensed legally from the Taiwan ERP co's with branch offices in China. Either way, Taiwanese ERP software is WAY cheaper than western solutions.
3. MS has taken a "soft stance" on piracy in China. If they took the same stance they did with companies and individuals alike in China as they have done in Taiwan, there would be an exodus from thier beloved desktop. Taiwan has cracked down hard over the past years, but because the general public can afford it, they still shell out for MS solutions. If China cracked down like that tomorrow, it would not fuel massive MS sales, but would fuel a massive move to GNU/linux and other solutions.
4. I have watched foreign buyer after foreign buyer be entertained daily over weeks of factory visits in China. As a marketing and sales department, try to imagine the budget a firm would need to do that with clients in New York, London, or even Nebraska for that matter. You just can't get your clients so happy for so little after a hard day's work anywhere in the world. And, thier wives are not around and yes there are plenty of things for the client to do at night. And, happy clients come back to buy more.
5. A LOT of Taiwanese money in China is the result of one or a combination of the following:
a. Taiwan firm borrows heavily, boss runs off to China with all the money, firm goes bust. Boss starts new factory in China with money he never has to pay back.
b. Taiwan firm gets money from Taiwan investors (or private lenders), runs off to China, gives shareholders minimum or no return (or defaults on private loans)
c. Taiwan firm has uncompetitive business but nice pension fund built up. Taiwan boss transfers pension fund to China, starts new factory. Taiwan employees left with nothing as Taiwan company goes bust.
d. Taiwan firm some how burns down in flames, literally!!!. Fortunately, boss had insurance, and decides that the insurance payout is better invested in China. Oh, and he had two policies so doubled his capital.
Of all four above, I have personally known of a firm in each case that has done it and got away with it. Cheap capital (as in extorted), is just another competitive advantage these guys have.
So, why does China let them get away with it? Because China is the next manufacturing superpower. That's right, in 5 years you will be lucky if you can find 10% of the goods on US shelves made in the USA. Even if they have the tag, those goods are probably assembled in the USA from components and sub assemblies made in China, Mexico, Indonesia, India, or wherever it is cheaper than the US. There are just too many arbitragers out there looking for a buck.
Real men don't need signitures!!!
'Anything you can make for $100, we can make for $40'
I can produce $100 bills for $100 each. If I can purchase some from you for $40 each (and I want real US $100 bills, not those cheap counterfits), I will buy all you have.
Hmmm... but I guess you guys don't actually make money, do you?
For every post, there is an equal and opposite re-post.
As a chinese student studying in US, I do have something to say.
a lley/43 5 0115.htm [siliconvalley.com]
> by 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.
Usually every time Slashdot has a story anything related to China, communist bashing usually follows. You know this world is full of catch-22s. Nationalist's land taken over by communist. But wfterall, what the United States did build on is their strong military power. Quoted from Black Hawk Down, "When bullets go pass your head, politics go right out of the window." But guns speak for politics. Every countries struggle like this, think about history of Texas and Israel. They fight. Power struggle.
For human right records, China certainly does not have a word to say. Lest not forget Tiananmen Square, but watched out for next 5 to 10 years. Power struggles and in-fights in the regime be taken account over this
>Asia feels heat as sofware piracy rises
>http://www.siliconvalley.com/mld/siliconv
>
>Microsoft Corp said on Wednesday software piracy was on the rise worldwide and
>China, Taiwan, Hong Kong, Malaysia and Indonesia were the "hotspots" in Asia
>where major counterfeiting activities thrived.
Yes, you are absolutely right. Now think about this, if you are a student, your monthly wages is less than $125 USD and you want to do 3D graphics just like you slashdot readers do, will you choose to buy a Maya 4.0 student version for a pirated $4 USD CD or $400 USD student version ?
Globalization hits every corners of the world. China is forced to open its market and they have to change, but standards has yet to follow. You really can't compare the wage of average Chinese wages with a piece of Microsoft Office.
By the way, ask yourself, did you ever you Napster, LimeWire, Gnutella and Hotline grab your favourite MP3's and Warez ? Pretty much the same moral story you know. It spares money (for more beer).
And of course again, that's why Linux is pretty hot. Watch out for the Redflag Linux.
> by aburnsio.com
>About third-world outsourcing brain work: don't do it.
>
>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.
>
>I don't want to sound pompous and say that third world programmers are no good, but usually they are no good.
First, think about should you classify China as a third-world country. Frankly it's kind of hazy to classify it between developed country and developing country.
It really depends on what kind of jobs for outsourcing isn't it ? Humans are hard to manage anyway. My analogy is to think about long distance love. Some do work out some don't. I bet you can't ask them to to a lexical analysis stuff but I'm sure most Chinese CS students have no trouble competing contracts on Visual Basic and MS SQL, and many MCSE, Cisco and Orcale stuff. In case you don't know, many favourite CS books in the States such as "UNIX Network Programming" by W.Richard Stevens have been licensed by academic publishers of Tsinghua, (I got one for $9), so watch your back and work hard on your CS class......
Watch out for Microsoft Research in Beijing. They do a lot of SQL stuff don't they ?
>by Astrorunner
>"any ting you want."
>
>"Anything?"
>
>"Anyting"
I don't find this particularly funny. There're many good Chinese that speaks English well too, those who speaks English AND Chinese well will earn a lot there. I know many Asian American friends see this trend.
And again, many Japaneses don't speak good English, but money speaks, saving speaks. Look at your logitech mouse.
And, oddly enough, this lack of IP law does have consequences (in this case, leaky capacitors screwing up most motherboards coming from Taiwan in the last 6 months) in a global economy:
Read here and here.
As much as a lot of Slashdot readers might not want to hear this, when information is totally free, things suck. Things also suck when rules put in place to protect information are enforced too rigidly or unevenly. The secret is to find a moderating system that finds the proper balance - something that Lessig has been saying all along...
That is all.
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.
I remember when Chinese computer components first came into the local market (Los Angeles) in large quantities. At first they were complete crap, cheaply made and clearly with no concept of quality control, and could be counted to barely scrape by and have a short lifespan.
:)
But 3 or 4 years ago, that began to change, and now Chinese products are pretty much on a par with everyone else quality-wise. I no longer cringe when I see "Made in China". This is a good thing all around -- I can save money buying a product whose quality I'm adequately comfortable with, and the money it brings Chinese workers is surely welcome there as well.
It's been the same for every startup-manufacturing process in every country -- they all take a while to get volume and quality on an even keel. We old folks remember when a Japanese car was a wobbly tincan with wheels. About the time Japanese quality went up, Korea came on the scene as the next big cheap manufacturing base, and at first everything from Korea sucked too. And if you go far enough back, you'll find 19th century Europeans' complaints about those manufacturing upstarts in America, flooding the world market with cheap crap.
~REZ~ #43301. Who'd fake being me anyway?