Slashdot Mirror
High-Tech Research Moving From US To China
Hugh Pickens writes "The NY Times reports that American companies like Applied Materials are moving their research facilities and engineers to China as the country develops a high-tech economy that increasingly competes directly with the United States. Applied Materials set up its latest solar research labs in China after estimating that China would be producing two-thirds of the world's solar panels by the end of this year and their chief technology officer, Mark R. Pinto, is the first CTO of a major American tech company to move to China. 'We're obviously not giving up on the US,' says Pinto. 'China needs more electricity. It's as simple as that.' Western companies are also attracted to China's huge reservoirs of cheap, highly skilled engineers and the subsidies offered by many Chinese cities and regions, particularly for green energy companies. Applied Materials decided to build their new $250 million research facility in Xi'an after the city government sold them a 75-year land lease at a deep discount and is reimbursing the company for roughly a quarter of the lab complex's operating costs for five years."
But fortunately for the rest of the world, they can laugh at our silly statements of what they "owe" us and get on with their lives. Oh, wait? What's that you say? We spend more on our military than every other nation on earth put together? Oh, well, I'm sure they'll pay up then.
Come on --- what's left for the US other than the formation of a military-enforced trade hegemony?
You know, a mainstream economist would say that having companies like Applied Materials in the U.S.A doesn't matter because consumer spending is 70% of the economy and Applied Materials does not produce anything that consumers buy directly! That's the problem with Keynesian economics. We think we can get ahead by stimulus and just consuming things and not producing things. People who have read and understood Friedrich Hayek's works know that the producers of goods further back in the chain of production are out competed for resources of all kinds by the consumption sectors when consumer credit is stimulated through cheap consumer credit as it has been in the USA over the previous 30 years. These firms that produce goods further from direct consumption by the consumer have to move to a less consumer oriented economy, like China to have better access to land, labor and capital.
It's not just cheaper labor. It's that they are doing what we did over a hundred years ago when we decided to just ignore the rest of the world's rights and patents and do our own thing. So we built and invented and took all of the credit where we could for ourselves. And it worked fine in the early days. Then lawyers and the courts got involved. And now, it's so cumbersome to even invent or create anything here in the U.S. that the only real option if you want rapid change and to stay ahead is to once again go to where there is no such idiocy.
And just like there was a giant brain-drain from Europe to the U.S. in the last century or so, there also will be once from elsewhere to China.
I know that if I wanted to start a new company, for instance, California would be the last place I'd want to start it. Or well, pretty much anyplace in the U.S., as just fighting and dealing with legal issues alone would take years and enormous amounts of money before even one item hit the shelves.