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Where Will Your Next Gadget Be Made?
hackingbear writes "The New York Times is warning of the possibility of price inflation for gadgets, cars, and many other items, not from our skyrocketing government debt, but rather the increasing cost of doing business in China. Coastal factories are raising salaries, local governments are hiking minimum wage standards, and if China allows its currency, the renminbi, to appreciate against the US dollar later this year, the cost of manufacturing in China will almost certainly rise. (The report missed the biggest cost factors in China — electric and water utility costs.) 'For a long time, China has been the anchor of global disinflation,' said Dong Tao, an economist at Credit Suisse. 'But this may be the beginning of the end of an era.' The shift was dramatized Sunday, when Foxconn, the maker of the iPhone and everything else, said that within three months it would double the salaries (rather than the rumored 20% increase) of many of its assembly line workers."
"And last week, the Japanese auto maker Honda said it had agreed to give about 1,900 workers at one of its plants in southern China raises of between 24 and 32% in the hopes of ending a two-week-long strike, according to people briefed on the agreement. However, while big and famous manufacturers, like those in the US and Europe, may worry about their PR images and give in to labor demands, it is unclear if thousands of smaller ones will follow. And given the millions of people waiting for work in other countries, from India to Vietnam, the only thing that may have changed is the prevalence of Made in China labels of your gadgets."
Since I live here in the US, I'd really like to see a return to the US for manufacturing. We're still teetering on the brink, don't let day to day market-droid speak fool you.
The US is not anywhere near out of the woods yet.
So...I'd like to see my next gadget have "Assembled/Made in the USA" on it.
Just as I'd suspect anyone from another country would prefer their country to be the country of assembly for their next gadget.
Sent from your iPad.
It's no longer efficient to do anything of substance unless it is required(and only to those requirements).
Twitter supports and protects racists - by smearing their critics with the "Hate Speech" label.
Oh, wait.
Lacking <sarcasm> tags,
Finally, manufacturing in USA will be viable option for at least some companies...While in USA labor costs are usually one of biggest expenses for companies, it ain't so in China.
Globalism should aslo mean there is fair labor rate everywhere.
I'm not sure it's so much "out of the woods" as much as it's beginning to be "sweep the undesirables (long-term unemployed) under the rug" to make things look better.
Twitter supports and protects racists - by smearing their critics with the "Hate Speech" label.
How will I ever afford electronics if the people making them are paid 50 cents a day rather than 25 cents a day? :(
The fact is, most of us can't afford to live in an america where everything is made by people who are paid $46,000 a year.
It's been said, a pair of $75 nike's would cost $300 if made by americans.
I think the next step will be more versatile machines (aka robots). Which leaves the issue of jobs for americans still unsolved.
Pay $50k for a robot, and run it 3 years, and you undercut even a $20k job. (not including social security taxes, etc.).
She was like chocolate when she drank... semi-sweet at first and then increasingly bitter.
The Chinese are in a wonderful and unique position to take over as the number one superpower and number one consumer of goods, turning the USA into a number 2 or 3 within a few years. Let's start off with the fact that China now has a "middle class" of fairly affluent working class people that is over 300 million strong.
Let me repeat that in case you missed it: Their middle class is as large (or larger) than the entire population of the USA. This middle class is buying. China can now self-sustain. In other words, there are enough people now in China with the money to buy stuff made in China.
So, we, the USA, need the Chinese more than than China needs the USA. Furthermore, the Chinese are smart enough to both "outsource" to cheaper countries than themselves, while acting as middle-men to their USA 'bosses', and while we will eventually get around to cutting them out (as we did to Japan), it will be too late by then, China will be selling in the USA directly (as the Japanese do, with established brands), and, as I said, they can self-sustain.
China, however, may "import" slave-labor (or nearly so, within boundaries of international law), allowing the Chinese a more relaxed lifestyle while imported workers do the grunt work for low wages. This will allow them to keep prices low and maintain their existing infrastructure of factories.
We just need to be careful though that *we* aren't the slave labor they decide to import.
If telephones are outlawed, then only outlaws will have telephones.
Anyone remember "Made in Japan"? Then "Made in Taiwan"? Now, "Made in China". Manufacturing moves to the cheapest location. This is how globalization works, for better or worse. If China becomes too expensive, somewhere else will arise to take up the slack and open near-slave labor factories.
Hopefully, this results in a rise in living conditions for everyone - My personal pessimism has doubts.
Brazil
Russia
India
China
Those are the current four countries moving up in the world. How long before Mexico goes into the mix.
Now that the Chinese are raising wages (not just Foxconn either, I read about Honda paying more to one of its parts makers there), this is going to spread. Sure you can move more to other countries, but none have the sure population that China has, except India, but I would argue they're well beyond China as far as worker rights and if China is getting more money they're going to want more.
How long until they cost benefit you have from cheap labor + shipping back to the U.S. isn't worth it? It's only a matter of time.
No sig for you!!
China will not allow themselves to be unseated as the manufacturing backbone of the majority of the world. If anything, they will allow for inflation within the economy, thus effectively negating the salary raises. It is all a math problem and china did not get to where they are now by being stupid.
curiously, as costs at the bottom rise, some manufacturing comes back to the home shores. sometimes it's shipping costs, sometimes it's snafus avoided, sometimes it's market pressure to have a made in USA alternative.
the rest of the market goes downhill further, as they move to green monkeys in Kenya, with the local human population pushing chips and solder into the trees, and catching the hot circuit boards as the monkeys drop them down.
when the monkeys need too many figs to keep working, it will go to pirahnas on the Amazon, or little green men from space who need busywork while their flux capacitors recharge, or whatever.
best you can do as a consumer is reward those who don't participate in the race to the bottom.
if this is supposed to be a new economy, how come they still want my old fashioned money?
I care where I get it. I've been getting more and more used instead of new. There are a lot of "trendy" types that sell things use at a insane rate. I got a iPhone 3Gs that was like new for $159.00 off ebay for her used.
I buy everything used now. you get more value for the dollar.
I end up with more stuff and more money. It's a Win-Win.
Do not look at laser with remaining good eye.
not from our skyrocketing government debt, but rather the increasing cost of doing business in China.
Government debt and personal debt still can cause this. It's hard to ignore that our fed is printing money like devaluing the dollar. The trade deficit with China is unsustainable, but let us not ignore the devaluation of the dollar. In 2005 our monetary base was about $800 billion. Now it's over $2 Trillion.
No thanks.
Never mind the corruption(making Chicago look saintly) and contempt for the US that still exists there.
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Not if the US military has their way. Not so much direct influence as much as it is pulling strings to get things done.
But then it's not hard to move upward when you're a Third World country.
(Yes, it's painful to hear, but modbombing is not a valid response.)
Twitter supports and protects racists - by smearing their critics with the "Hate Speech" label.
My boss would have a field day with the summary.
As he likes to say, percentages mean nothing without harder numbers. Let's use one of the original articles for number basis:
Wage hike: $84 million per quarter over entire company (with a raise of 20%)
Workers: 300,000 at one plant.
Assume 300,000 workers are 1/4 of entire workforce
$84 million * (100%/20%) = $420 million
$420 million / 1.2 million workers = $350 per worker per quarter.
Assume 1 quarter is 13 weeks, with each week being 40 hours
$350 / (13*40) = $0.6731 per hour.
Assume that it takes 2 man-hours to build a motherboard
Assume $100 motherboard is marked up 70%
Motherboard Cost: $30
Percentage increase: (2*$0.6731)/$30=4.49% increase in costs
Assume price increase carried through the entire pricing package, The former $100 motherboard is $104.49 now. Not a world class problem.
I call it 'The Aristocrats'
Many former 2nd-world countries are scaling up their high tech production of ... just about everything. Just one example, my current blackberry was made in Hungary; but of course there are many many other similar examples of electronics coming from your favorite former soviet bloc country.
Damn_registrars has no butt-hole. Damn_registrars has no use for a butt-hole.
From my experience, the answer is likely vietnam or cambodia. I have seen a few firms considering pulling out of china due to rising wages/price inflation, and they were all looking at these two countries.
This also illustrates why in the USA, *small business* success is so critically important to any hope of "economic recovery".
When we talk about such items as $75 Nikes that "would cost $300 if they were made in a factory full of USA union labor, paid $45K plus per year", we neglect the possibility that SMALL companies making unique shoes could compete nicely - providing a truly USA made shoe at more like an $85-100 price point - while still earning respectable salaries for the people working there. Sure, they won't employ nearly as many people as a big factory, or even sell as much product -- but the point is, MANY smaller companies can co-exist, all offering alternatives for footwear.
Sometimes, I think we're so fixated on the concepts of "economies of scale" that we forget it's not a universally beneficial thing? When a business grows to a certain size, they have to spend a LOT of money on advertising/marketing to convince people their product is the one they want to buy/keep buying. (And how is all of THAT paid for? Yep ... rolled right back into the price tag of the product.) They also tend to make so much product, it starts making economic sense for them to automate/mechanize all sorts of processes that allow hiring cheaper labor (employees who don't need as many skills or as much intelligence, because they're pressing a button or pulling a level repeatedly, instead of *understanding* how to do whatever process happens as a result). That leads to a lot of low-paying jobs, vs. a relatively small number of higher-paying ones.
With many smaller businesses turning out similar, competing products - you tend to encourage people to buy more regionally/locally from whichever supplier is nearby -- and they can sell to those folks without needing to launch multi-million dollar marketing campaigns with celebrity sponsors, etc.
I find it unlikely that China plans to do that, and so does the US:
http://www.uscc.gov/annual_report/2009/annual_report_full_09.pdf
As pointed out in the article, not only does that fixed price help China's markets grow and build cash reserves; but high technology specifically is a critical aspect of China's plans. Thus, it's very unlikely that they're going to stop trying to bring over development of these high technologies until they finally hare a more integral process in their development.
They've been stubbornly holding the renminbi low for years, and there' no real reason to stop now, not until they have a larger say in the IMF.
"Our goal each year should be to increase the number of goals we set for ourselves!"
If we brought manufacturing back to this country, then SHIT MIGHT ACTUALLY WORK for more than a month!!!
labor will go to the lowest cost country - period. end of story. issue is - we may be starting to see the start of the long dreamed of day when labor prices start to equalize worldwide. sucks if you are labor in the US or EU - it was great for Mexican labor, until China opened up, and now it's gonna be great for India, Vietnam, and probably a few Latin American and African counties.
Once the capacity of a local is exceeded, prices rise, the some of the work moves. Not all of it, but the lowest value add portion. So the Chinese labor will finally feel what the American auto assembly line work felt in the late 80's as their work moved offshore - disruption.
Nationalistic bickering aside, this is very good news. As living standards rise around the globe, labor will get more expensive, sure, and our iPods might cost 20% more or something, and in return, human beings on the other side of the planet have food on their table and work to do. It's good for the world that labor in china is getting more expensive in every way except the most short-term "I want my shit cheap right now" way.
We are not going to be able to bully China into submission like we are used to doing around the world. How about if we start trading with her and learning to respect their culture? That doesn't mean ignoring human rights abuses, but it means respectful engagement.
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If that increase translates into a higher-quality product (and less suicides in Potemkin villages like Foxconn's), then it is indeed worth it.
Twitter supports and protects racists - by smearing their critics with the "Hate Speech" label.
Well, they are going to be using a lot more resources - eating more meat, driving more cars, more precious metals, all that good stuff. Energy costs will soar when the global economy recovers. But don't get me wrong, I can hardly complain when their consumption is on average still a fraction of mine. And maybe their armies of engineers will figure out a post-fossil-fuel economy.
Depends on what I build next. If it's the new arena drag I'll build it out in the machine shed where I do my welding. Motorizing the grinder Robin uses to powder beet pulp I'll do out in the shop. If it's an electronic gadget such as the tractor ECU I've been planning it'll be made mostly upstairs and here on my desk.
Warning: this article may contain humor, sarcasm, parody, and perhaps even irony. Read at your own risk.
A hundred years from now most things will come out of an inkjet printer. And then you have the real thorny question of what we'll do with the unemployed global masses of humanity when factories have been made obsolete. Not everyone can be employed making matter printers.
That was the funniest post I have ever read.
So...I'd like to see my next gadget have "Assembled/Made in the USA" on it.
Yeah. And I'd like Scarlett Johannsen to slob my knob tonight. The probability of either happening are the same.
There are two commonly held misconceptions in your post:
1) the US manufacturing sector is in decline
The US export per GDP is now #179 in the world. That sounds pretty bad to me. Now, we have such a large economy that the raw numbers look great, but saying the US manufacturing sector isn't in a decline is pure nonsense. If I remember correctly, we're on the same performance level as Burma.
The US economy will cease to exist as you know it within your natural lifetime. I say "natural" lifetime because with the pending socio-political-economic collapse, many people will probably come to unnatural ends much sooner than they expect... ...The United States Federal government, as well as the governments of 49 of the 50 states, are legally insolvent. Not only is the federal government out of money, but the largest area of spending growth is debt servicing...
And more bullshit. Our external debt level is not even at an all time high (which was 120% after WWII). People are flocking from the Euro to the Dollar as we speak. No, really:
Global investors flock to US debt at record speed
Gregory Daco, economist at HIS Global Insight, said the investment trends were clear evidence of trust in the US. "As the sovereign debt crisis in Greece intensified in March, foreign investors mostly sought refuge in the safe-haven US Treasury bonds and notes," he said.
"Nonetheless, government agency securities and corporate debt provided very attractive alternatives for investment – an encouraging sign that investors have faith in the US recovery."
Detroit?
Built by nano assemblers on my desk.
Yes Francis, the world has gone crazy.
It's been said, a pair of $75 nike's would cost $300 if made by americans.
.
Interesting that I paid only $105 or so for some USA-made New Balance athletic shoes just a couple of months ago. (And I do mean USA made, not USA assembled.) The list price is higher, but the interwebs price is lower.
Then again, someone's got to pay for all those Nike celebrity endorsements.
Yes, but you are assuming that the cost of the individual parts and the shipping costs associated with getting them to the manufacturing facility are staying the same. The 4.49% increase in costs you have does not take this into consideration. TFA specifically states that local governments have stepped up enforcement of labor and environmental regulations, driving up production costs. Those are costs all around. Not just the labor costs of one company.
Nationalistic bickering aside, this is very good news. As living standards rise around the globe, labor will get more expensive, sure, and our iPods might cost 20% more or something, and in return, human beings on the other side of the planet have food on their table and work to do. It's good for the world that labor in china is getting more expensive in every way except the most short-term "I want my shit cheap right now" way.
That's a bit shortsighted.
Gadgets are not something like food; their novelty/luxury items. If (when) the cost goes up across the board, people will spend less of their hard-earned money on the things they don't need - ie, gadgets. (Perceived) quality will need to go up a similar proportion as the increase in cost for the product to remain competitive (remember the 'high quality' Erickson, etc. cell phones from a decade ago? - they were supplanted by other products offering a better price value).
In return for the decreased demand, there will be less manufacturing done; this will further increase the manufacturing cost per unit, likely leading to a loss of jobs in the foreign plants (unless they're able to cut costs). Increasing costs to your customers NEVER results in more business unless it is paired with a (perceived) equitable increase in the product.
As for respecting China's culture... sure, I'll get right on that. My first cultural taboo to learn to respect is child labor. After I've gotten over that, I'll work on violent persecution of belief systems I don't agree with (Christianity, Islam, etc.). Then I'll work on agreeing with overt state-controlled censorship, and finally, the wanton destruction of the ecosystem and disregard for dumping toxic waste. In fact, I might start on the toxic waste thing: it's easy, because all I'll have to do is pour some waste oil into the municipal sewer. I figure that by this time next year, I'll have matured enough as a person to start accepting China's particular brand of threats and imperialist encroachment - just in time for their wholesale invasion of Taiwan or Tibet, maybe.
~/ssh slashdot.org ssh: connect to host slashdot.org port 22: too many beers
The problem becomes one of population. China has been using the rest of the world to haul it's own development levels and therefore standards of living up. I've been predicting this for quite some time; each outsourcing job results in a number of internal jobs starting up, thus the labor pool is emptied faster than many think.
Back on South America as a potential labor pool - China has 1.3 Billion people. India, which the same thing is happening to(and they're perhaps a bit further along), is 1.1 Billion. Wikipedia places the population of South America at around 385 Million, and it's quite a bit more developed than China, on average. Africa is right around a Billion, making it perhaps a better choice, but it's still got issues with stability.
After China and India industrialize, I figure they'll go through the same process we did, and start looking to export labor. Thing is, I don't think 'cheap' labor will last long in the rest of the under-developed world once China and India are 'used up', ie brought up to close to European/American wage rates.
I think that Stability will be a much bigger concern at that point. A region gets ahold of it's problems long enough to convince businesses to take the risk will be hauled up VERY quickly.
I don't read AC A human right
You should educate yourself on Chinese policy. I'd recommend the USCC (Unites States China Commission) as a start. They're only being nice to us until they can build a bigger military, infrastructure, and 'catch up' with the rest of the technological world.
Yes, letting the renminbi float would drastically help world markets, which is exactly why they won't do it. Not until it's actually to their advantage to do so.
"Our goal each year should be to increase the number of goals we set for ourselves!"
Manufacturing is not coming back to the US as long as consumers only care about their own wallet. Things in the US cost more to manufacture, and until people think about anything other than their wallet when purchasing stuff like electronic gizmos, they'll always be made by the cheapest bidder.
I don't respond to AC's.
It's easy to locate jobs that are lost to free trade, but more difficult for us to immediately identify the many jobs that are gained - but they are there. Think about where you work right now. Is it a foreign-owned company? If no, does your company have any foreign investors (shareholders, bondholders, etc. etc. etc.)? If no, does your company do business overseas? If no, does your company do business with foreigners? If no, does your company do business with recent immigrants? Everyone one of you, if you are honest, should have answered "yes" to at least one of the above. For that matter, this is Slashdot - chances are many of you work at a company that was FOUNDED by recent immigrants. The negatives of free trade are intensely concentrated (factory is shut down and people lose jobs) while the positives we get from free trade are huge, but widely distributed. It doesn't necessarily follow that the positives are greater than the negatives, but it certainly creates an obvious bias. Which means that at the very least, we should interrogate our anti-free-trade intuitions very carefully.
The reflexive free-trade bashing that occurs among otherwise educated, thoughtful people frankly astonishes me. Especially when I encounter it on Slashdot, which is a community that prides itself on a generally high level of scientific literacy (and frequently derides the scientifically illiterate). Yet there's an astonishing economic ignorance that goes entirely unquestioned. Now it's perfectly reasonable to be skeptical of free trade, as there are plenty of very smart economists who are similarly wary, and I am myself. But any informed critique of the system needs to account for, at minimum, the following questions:
1) How is your opposition to free trade any different from the Luddite fallacy? (Or put another way, how is using cheap foreign low-skilled labor for part of the manufacturing chain any different than replacing weavers with weaving machines?) The Luddite fallacy was that each weaving machine represented jobs that were lost forever, which is fallacious because it fails to take into account that cheaper clothes means more clothes sold AND more economic activity in other industries because consumers now have more money left over after buying clothes.
2) If free trade is exploitative, how is it that so many countries that were once sources of cheap outsourced labor have ascended the value-add chain and now have economies that contribute at the middle (Taiwan) or top (Japan) end of the manufacturing chain?
3) A straightforward application of the law of comparative advantage would indicate that completely unrestricted trade increases everyone's absolute wealth as each nation specializes in its field of comparative advantage. How do real-life factors confound this theoretical model? Alternatively, is it a decline in America's absolute wealth that you are worried about, or are you simply worried about a decline in our relative wealth? (Put another way, does it bother you if everyone, including us, gets richer if that means the rest of the world will catch up and surpasses us in wealth?) And if the latter, how do you justify indefinitely concentrating relative wealth in one country out of proportion to its global share of the population?
I predict manufacturing will gradually move east-ward around the globe. First it will head into Southeast Asia. It may also move into India, which is a natural move given we already outsource so much to India. The catch there is that it may already be too expensive to do manufacturing there by the time there is any real push to move. So I think ultimately we're going to be seeing manufacturing in Africa. And I wont be surprise if the Chinese are among the first to move there given how much business they're already doing on the continent. There may be a day that manufacturing is so expensive in any country that we might as well do it domestically, but we're still a long, long way off from seeing that.
I do think, however, that even with these shifts we're going to be seeing the cost of goods continue to rise. Whether our own incomes rise as well is another story. It's possible we'll end up being forced to live more modest lifestyles, back to a sort of 50's era standard of living. 900sq-ft average homes versus over 2000sq-ft today, single-car families, a single tv in the home, etc. It's unreal how much the standard of living has improved for people not just in the west, but around the world, contrary to what a lot of people like to claim. Given the way things are going I wouldn't be surprised if there's a move backwards.
Made in Japan
Made in Korea
Made in Chine (perhaps a special case)
It's a cycle that 3rd world countries should celebrate.
1. Manufacturing, starting with minimal tech, moves to country with extremely cheap labor but is relatively stable.
2. Tech steadily improves as higher and higher tech move in to take advantage of labor costs.
3. Eventually the labor costs start to rise as the country joins the list of developed countries.
4. Rinse and repeat.
Assuming civilization doesn't seriously back step this process will be a great thing for the world.
Now for the pie in the sky, this process will move off world eventually. Earth orbit, moon, asteroids...
Ward
. Silence! Be thankful thy species is unpalatable! .
When was anyone disrespectful to China? You must be asian for this emphasis of respect, and Chinese to think that China has not got it. Chinese are obsessed with aggrandizing China and anyone who thinks anything less is 'disrespecting' China.
"Men willingly believe what they wish." - Julius Caesar
You seem to believe China allows 'free trade'. This simply isn't the case. As outlined in their 'five year plans' and implemented by their government, China expressly focuses on importing certain technologies and divisions. Critical areas include telecommunications and high technology (there are more but the report is too long to remember off-hand).
1)Because the weaving machine companies weren't purposely undermining the market. I'd like to point out the lending spree that happened within the last decade and cause the mess the US is in now. China 'publicized' it's medical works, making medical care costs shoot through the roof. This, in turn, caused the Chinese population to save their money to account for bills. This, in turn, generated a gigantic sum of money that Chinese banks could lend. And then the US, in a spectacular show of greed and stupidity, borrowed all of this money for a spending spree. Perhaps if there weren't doing things like this, the 'free trade' model would actually work.
2) Should I mention the Value Added Taxes which ARE illegal by IMF standards, and which the US has been trying to persecute the Chinese government for via the IMF? The main difference between China and the other industrial nations is that they refuse to allow their currency to float to global standards. If you're so well versed in the economic discussion, then you know that the renminbi is under-appreciated, and that allows for unnatural growth and development in China. In fact, this is how they became the largest creditor in the world.
3)They keep the renminbi pegged at approximately 6.5 to the dollar because it attracts development. Thus, you cannot apply the law of comparative advantage, because the prices are being fixed in favor of China. Should I also mention the joint ventures and foreign company blockades? The Chinese government subsidizes several 'critical sectors' of their economy, driving domestic prices below what any foreign company could sell, assuming the company was even allowed into China. More often, the foreign company is forced into a 'joint venture' with a native Chinese company, where they 'share' their development of the products. There's also typically a signed agreement where the foreign company cannot sell it's goods for x years. By then, the domestic companies are already well established and block out the foreign ones.
In short, you can't apply 'free trade' to a nation which doesn't trade freely.
"Our goal each year should be to increase the number of goals we set for ourselves!"
Changes in China Could Raise Prices Worldwide
or shrink margins.
We don't know yet.
Increase prices into a double dip?
Increase prices into the 2011 tax increases?
"US Tax rate increases next year are everywhere.” 2011 income pulled into 2010
http://www.moneynews.com/StreetTalk/Laffer-2011-Tax-Collapse/2010/06/07/id/361234
Not really even nationalist bickering. But this is how it really is supposed to work with free trade.
If once country imports a lot of stuff the value of it's currency goes down. When that happens imports cost more but your exports cost less. You start to export more and or buy more from internal sources.
The end result is things should start to equal out.
China has been preventing their currency from rising because they don't want their exports to cost more and do not want their people buying imports.
See my blog http://ilovecookes.blogspot.com/ for light hearted technical information.
Actually, I'm not sure of current numbers but I found a report from 2004 that says that we import more food here in the USA then we export. And since a lot of corn is now going to ethanol production, I'm assuming we export even less now.
http://www.organicconsumers.org/corp/exports111204.cfm
Just because we have a lot of farmland doesn't mean we are making any money from that farmland. Think about that $2 jug of apple juice you just bought at walmart -- you think the apples that made that juice were grown here??? Those apples were grown in China. I am not kidding.
If telephones are outlawed, then only outlaws will have telephones.
So why aid them by allowing US corporations to outsource a crap-load of labor over there? US corps seem to be of the ilk of "rape & pillage while the getting is good", so I don't see how we can take any sort of high ground.
They are building many nuclear reactors:
http://english.peopledaily.com.cn/90001/90776/90884/6640166.html
http://en.wikipedia.org/wiki/Nuclear_power_by_country#Countries_with_nuclear_power_plants
http://www.iaea.org/programmes/a2/index.html (search/highlight "China" on that page)
And I think they are trying to control the supply of materials used for motors and batteries.
Go figure :).
Good news? In a few short years China can experience the stagnation, unemployment, and economic crisis that the West enjoys. Learn to respect a culture of totalitarianism? I think we've done enough of that.
"Gadgets are not something like food; their novelty/luxury items. If (when) the cost goes up across the board, people will spend less of their hard-earned money on the things they don't need - ie, gadgets. "
Luxury items are less prone to inflation.
Once upon a time, we lived in insular little markets, where stronger extracted value from weaker by overt force or covert destabilization. (OK--really we kill people and take their stuff, or make them slaves. Read about bananas sometime...).
This still goes on, and will never stop; the human race is still the same bunch of greedy bastards we always have been. As a whole, if it's profitable to be evil, people are evil. Put altruism next to greed and I'll bet on greed every time. If you're an altruist, great; I'm happy for you. Go find a way to make it more profitable for the rest of us morally decrepit capitalists to be less evil. We'll all stand up and chant your mantra.
"Globalization" and "outsourcing" have the same effect on labor and goods as arbitrage has on currency. With labor, takes a little while longer than with currency. But this is only the very predictable and obvious result of the combining of markets.
Suddenly these little markets are not so isolated. It becomes less feasible to devalue somebody's hour of labor when it's connected to your own. The rates of exchange for labor have been converging for a while. In developed markets, the value of labor has gone down significantly. Now we begin to see pay on the other end of the process rise.
So the Chinese laborer wants more of the benefit from his hard work.
Good.
Maybe next year we will sell them something.
"Reality is that which, when you stop believing in it, it doesn't go away." - Philip K. Dick
How about if we start trading with her
I think it's time to drop the 'her' pronoun when referencing boats and countries. It's just stupid.
I suppose that's one interpretation. Just because they start enjoying a better standard of living does not mean they have to have a catastrophic banking crisis brought about by poor government incentivizing in the marketplace. And I believe I explicitly said respecting their culture does not have to include the nasty bits.
Currently hooked on AMP
Personally I think it will take us more like 50 years to get there, but molecular manufacturing (MM) is coming and there is probably no way to stop it.
See the CRN Overview for some idea of how huge this will be.
They will move the jobs to Africa.
It IS good news, but for a different reason. As Chinese workers acquire the ability to become non-trivial consumers, they will be creating their own [domestic] demand. This will push prices even higher -- when export is no longer the only game in town. When the situation stabilizes, Chinese labor will have cost advantages primarily in the Chinese market (which will be a HUGE market, BTW).
As for "I want my shit cheap right now", the solution will be to migrate Chinese production to the last bastions of the third world -- Central America and Africa.
Your comments on "bully[ing] China into submission" are laughable. If someone wants to "bully" me with a $200 billion/year trade imbalance in my favor, I say let the bullying begin -- the sooner the better!
It'll be built in space, with non-existent free-fall manufacturing technologies and at tremendous energy cost. Hey, it was a dream of the '60s, so it must be true.
The hidden inflation costs that will appear once the world stops underpaying their workers in China is going to be insane. For years the USG and the central bank has been trying to report these low inflation numbers. Permitted to be wrong because no one argues with the Fed Reserve nor do they need to explain themselves and because it made for great political coverage, once we start paying full-price for goods again people are going to get a lot less cocky about national debt issues. Real inflation is only felt when the costs of real products go up. Make the same gadget in the U.S. or even in South America instead of some place like China and we'll see how much the cost of goods will really rise. There will be shopping malls closing all over the country and rightfully so.
PS If you don't know what debt has to do with inflation, drop out of the conversation now.
I knew that eventually those making our high tech electronic gear would demand more money. Eventually though the economy in the U.S. will be attractive for manufacturing again.
I wouldn't hold my breath. The last train left the station 2 recessions ago. The factories were shuttered, people scattered, supply chains were dismantled and we haven't been training many people to do electronics work since then. The Electrical Engineering departments at many US universities have de-emphasized circuit design in response falling demand for graduates with that skill set.
It would take a rather large, sustained price hike in electronic products to bring about any resurrection of the electronics manufacturing industry in the US. I doubt I'll live to see it.
Wansu, th' chinese sailor
Specifically because their elasticity of demand is high.
After all, I am strangely colored.
"...a catastrophic banking crisis brought about by poor government incentivizing in the marketplace..."
Fanny and Freddie were insignificant next to the shenanigans worked by Goldman and J.P. Morgan Chase and IAG.
Instead, try an internet bubble that lead to too much cash chasing too few investments. As such financiers created ever more dodgy and creative instruments (mortgage-backed derivatives) that themselves depended upon a steady and ever increasing supply of mortgages. Which in turn encouraged companies to approve anyone and everyone... all behind the scenes and under the covers with little to no government oversight.
The end result we've already seen.
Any sect, cult, or religion will legislate its creed into law if it acquires the political power to do so.
As for respecting China's culture... sure, I'll get right on that. My first cultural taboo to learn to respect is child labor. After I've gotten over that, I'll work on violent persecution of belief systems I don't agree with (Christianity, Islam, etc.). Then I'll work on agreeing with overt state-controlled censorship, and finally, the wanton destruction of the ecosystem and disregard for dumping toxic waste. In fact,
You act as if that's anything strange with a randomly chosen culture. Our standards (no child labor, no child marriages, slavery, freedom of opinion, free economy, ...) are all 1-on-1 copies from an ideological belief system - halfway between catholic and protestant christianity - and then people act totally surprised when other belief systems (or even slight variations on our belief system) don't allow them.
Freedom of conscience (ie. no violent persecution based on religion) - exists in Christianity and Bushido - most notably absent from Judaism and Islam. But the big exception here is Christianity and Bushido. Today, most notably muslims do not have freedom of conscience, there are even questions if it even exists among american muslims - e.g. honor killings. But islam is nothing special here, most belief systems do not tolerate freedom of conscience and do not see it as a value. Even most atheist belief systems -like communism, nazism or simply the atheist society of ancient Athena- do not allow freedom of conscience. And quite frankly, having read Christopher Hitchens, I seriously doubt he's a fan of freedom of conscience laws.
Free economy - exists in protestand Christianity, in a (much) lesser measure in catholic christianity and it exists in Islam, does not exist almost anywhere else, but most obviously does not exist in Hinduism, nor in Buddhism. Every action in the large majority of ideologies is for the exclusive benefit of the system.
Slavery, or permanent forms of forced labor - does not exist in Catholic christianity and doesn't exist in Judaism. Part and parcel of just about every other system, like islam, hinduism and Buddhism
Equality - does not exist in practice, not even in most forms of Christianity, or it is only paid lip service. But nevertheless, in Christianity and Judaism, the life of any one Christian or Jew is the exact same worth as that of any other Christian or Jew - man or woman, man or child, shoe polisher or pope. The distinction between Judaism and Christianity being that christians are supposed to look on members of other faiths as people of equal value, while Jews see themselves (in the scriptures) as better (by birth), even if they're supposed to show this in various positive ways. Of course, in practice there are serious questions to be raised. However, even if perfect equality obviously didn't exist, you'll never see the social apartheid that exists in just about any other system. In most other religions, the inequality is much more explicit : islam has the legal distinction between slaves and free men (women are never free, at best they can own some limited property, they are, however, never free to choose their own life). The life of a free muslim is worth twice (literally, in dollars, or whatever currency) that of a free christian male or a muslim woman (except in the case of murder), which is worth 8 times what the life of a free non-muslim women or generally anyone else. Quite frankly, muslim women are already rather cheap to kill : about 10000 dollars. Hinduism has the caste system, Brahmins are worth the most, men or women, just by their surname the "least" job they can occupy is officer in the army. Below that you have 3 other castes, the least of which - and the most numerous - are the dalits - basically slaves.
child marriages, or marriage contracts not made between marriage partners, but enforced by the state nonetheless - exist in islam, judaism, (part of) hinduism and Buddhism. It even exists in just below a majorit
Greece will be bought up by private international companies. "stabilize" and be used has cheap labor and build our next gadgets.
Your history is full of such comments. So it seems you do enjoy lowering yourself with idiotic responses.
I know what you're trying to say here; that it's the automation and increased efficiency that allows a company to make so much product ... and not vice-versa.
But I'd argue that there's some of *both* going on in mass production of goods, so you and I are both right.
EG. A company might automate a process to increase efficiency, and the result is an increase in product output. But past a certain point, they've automated all the obvious/no-brainer stuff that all the employees are happy to see automated. Then, thanks to diminishing returns, they've got to "dig deeper". That's when they begin the "race to the lowest wage workers" (because the single biggest expense for a business is their workers). That's where they look for solutions like letting go of the higher paid employees with lots of skills by automating away the more difficult tasks they used to perform. That tends to become a huge up-front expense though -- and out of the reach of a smaller business (who can't even get the bank loan required for such a project, in many cases).
Net result? Maximum efficiency at cranking out a widget is closer to being achieved -- but at the "price" of no longer being a company that employs people at higher salaries they used to command for possessing more advanced skill-sets.
Automation only creates "higher salaried jobs" for the installers, designers, and to a lesser extent, maintainers of said automation products. And as big businesses consolidate/merge and become dominant to the point of squeezing out small businesses - this issue worsens.
Nationalistic bickering aside, this is very good news. As living standards rise around the globe, labor will get more expensive, sure, and our iPods might cost 20% more or something, and in return, human beings on the other side of the planet have food on their table and work to do. It's good for the world that labor in china is getting more expensive in every way except the most short-term "I want my shit cheap right now" way.
That's a bit shortsighted.
Gadgets are not something like food; their novelty/luxury items. If (when) the cost goes up across the board, people will spend less of their hard-earned money on the things they don't need - ie, gadgets. (Perceived) quality will need to go up a similar proportion as the increase in cost for the product to remain competitive (remember the 'high quality' Erickson, etc. cell phones from a decade ago? - they were supplanted by other products offering a better price value).
In return for the decreased demand, there will be less manufacturing done; this will further increase the manufacturing cost per unit, likely leading to a loss of jobs in the foreign plants (unless they're able to cut costs). Increasing costs to your customers NEVER results in more business unless it is paired with a (perceived) equitable increase in the product.
As for respecting China's culture... sure, I'll get right on that. My first cultural taboo to learn to respect is child labor. After I've gotten over that, I'll work on violent persecution of belief systems I don't agree with (Christianity, Islam, etc.). Then I'll work on agreeing with overt state-controlled censorship, and finally, the wanton destruction of the ecosystem and disregard for dumping toxic waste. In fact, I might start on the toxic waste thing: it's easy, because all I'll have to do is pour some waste oil into the municipal sewer. I figure that by this time next year, I'll have matured enough as a person to start accepting China's particular brand of threats and imperialist encroachment - just in time for their wholesale invasion of Taiwan or Tibet, maybe.
Great post. Since when are "child labor", "violent persecution", and "toxic waste" dumping part of Chinese culture? That's like saying partisan bickering is part of American culture. It's part of American politics.
Politics - and the societal attitude towards the environment - are very much a part of a culture. A culture is all what makes them a people group, the good and the bad.
Once you say something like violent persecution and child labor aren't part of a culture, you might as well say that war or economics aren't part of a culture, either.
What, per chance, were the defining characteristics of the Roman culture (slavery, opulence, violence, trade, citizenry, the Republic/Empire)? How about the Khan-era Mongol culture? A culture is not a myopic fixture of a people; the people - good and bad - are the culture.
~/ssh slashdot.org ssh: connect to host slashdot.org port 22: too many beers
The shift was dramatized Sunday, when Foxconn, the maker of the iPhone and everything else, said that within three months it would double the salaries (rather than the rumored 20% increase) of many of its assembly line workers."
So thats what? $2 a day now?
The USA use to make almost EVERYTHING, then, CEO's & unions got greedy and killed the golden goose. BOTH sides, labor & management need to be realistic and work together. Unions need to stop demanding retiring at 50 with a FULL pension, you just cannot do that any more, and management needs to be realistic to the needs of labor, and not trying to have a salary 100+ times that of the workers.
Hello. What about increase in demand from Chinese customers?
To the extent that your think that existing problems with the economic system are that it's insufficiently free, I probably agree with you. I think the solution to "immigration" is more immigration, in both directions. That said, the idea that the renminbi peg is somehow distorting the true "free" state of the market and bad for us is a convenient bipartisan way to bash the Chinese that has currency (yeah I know) only because it's repeated so often. The renminbi peg decreases Chinese buying power and increases US buying power. This is supposed to make us upset why? Yes, this means that there is stuff from China that is cheaper than the same stuff from the US. But believing this to be a problem is just the Luddite fallacy all over again. And yes, it is spurring their development - but it's also a creator of wealth here. Now it is possible, and maybe even probable, but the renminbi peg is growing China's economy faster than it is growing western economies... but then we're back to the absolute vs. relative wealth question.
If you're worried about China's rise, you should be fearing the day that they remove the renminbi peg, because that means the Chinese are confident their domestic demand is now up to Western, developed nation levels and they no longer need to be an export-driven economy. Sooner or later that day will come and China will remove the peg (the Western world's concentration of relative wealth is unsustainable), but IMO it should come much, much later (hopefully by which time China has developed a more free political system) because globalization generally works best when its a gradual process. I might find myself agreeing with the Luddites myself if someone told me 50% of all jobs would be replaced by machines... tomorrow. The economic system would have no problem processing that kind of a shift over a longer period of time, but it wouldn't survive a shock that sudden.
You've never worked in electronics manufacturing. I'd say 5% or maybe less and in the long run, prices might even drop a few percent. Human labor costs aren't all that important to a properly designed automated manufacturing process. If labor gets expensive enough, it'll be replaced with robots or hard automation. I suspect that there are lots of jobs at Foxconn like the one that committed suicide because he couldn't face hand-polishing one more iPod. I'm sure there's a Chinese engineer who could design a machine to replace him for under $20K. (then build as many as one needs) The savings would ultimately come from hiring a whole lot less people to do jobs that no humans should be doing and deleting the infrastructure required to manage them along with higher throughput.
When labor is cheap enough, people don't automate where they should because they're thinking short-term rather than solving the problem once and for all by throwing capital at it, even if it would reduce their costs in the long-run.
Tech Public Policy stuff
I realize that most of us here on /. are pretty addicted to the quick lifecycle of technology, but our lifestyles are complete shit. They are based on exploiting people (through unliveable wages and bad workplace environments), they don't actually make us happy (perceived happyness in developed countries has been steadily declining), and are just plain terrible for the environment.
As manufacturing costs increase we will all hopefully consume a little less. Our time will become more valuable, and perhaps we will begin producing more, and producing higher quality products with longer lifetimes. I personally hope that increased manufacturing costs will make antiquated concepts like repairs, component re-use, quality of manufacturing, and pride in one's work become more culturally mainstream. I'm just speculating, but maybe it will become cheaper to upgrade your components rather than purchase a mass manufactured computer, or to repair your television when it breaks rather than replace it.
Maybe a slower rate of technological gadgetry will allow us to adapt more, culturally, socially, and mentally to the enormous changes we've experienced in recent years. Speaking of pride in labor, maybe programming skills will begin to take more value again, as clean and efficient programming and design become more important, since people might not be replacing their devices with double the power every year.
It's impossible to really know what the net consequences will be of course. As the chinese increase their living standards and workers rights, stuff will get more expensive. Maybe manufacturing will start to shift to some other repressive regime. On the other hand, more people sharing in the economic pie means more skilled technicians and different economics of scale. These influences will compete with scareceness of resources. Harder to predict is what the net cultural effect will be.
Of course, all of those considerations are insignificant compared to the fact that no-one should have to live the way the poor workers of the world currently live, so a small minority of us can live like drunken, wasteful behemoths. If less shit (shit being electronic gadgets, cheap clothes, etc) is the price I have to pay to live in a world with a little less inhumanity, then I'm all for it.
You must be reading a different history than me.
You might be interested to know that at a time where the European christians tortured or expelled Jews and Muslims, Turks and Moors allowed Jews and Christians freedom of worship.
I'm in the market for a new pair of boots and could use a recommendation :D
The Pandora console PCBs are made in USA, plastic cases are made in China and the units are assembled in UK. I really would like to see others having similar patterns.
Sorry, China is old news. Vietnam is the new place. Oh wait, that is already old to. Just check were the outsources are moving next. There is always a new poor nation were unions are non-existent. Remember, once Japan was a low-wage nation. So was Korea.
MMO Quests are like orgasms:
You may solo them, I prefer them in a group.
One MAJOR mistake in your analysis, which is a "mistake" that MANY people make, is that:
"A Religion/belief is only as good or as bad as those who practise it"
Lets take a point in example:
In the Torah (old testament) there are rules for Stoning, and such. Yet these are not practised any more, as its unacceptable for modern society, therefore the religious leaders of judaism have adapted.
Also another point, the Caste System (which incidently is NOT part of hinduism, but is just a common misunderstanding/misinterpretation, whoes scope is beyond this comment) is totally deplored by the consitution and Government of India, and also by many hindus. Yet, PEOPLE still (illegally) live by it in India.
Have a nice day!
Judaism is extremely tolerant of other religions. Never have Jews waged war or killed indiscriminately due to religion. Judaism has ideas and opinions about other religions and their validity, but it does not promote violence as a method for dealing with them.
WOW, you don't know anything about economics. stop talking about it, you are embarrassing yourself (even if you don't know it...I'm feeling your pain for you...that's an imbalance of empathy, to be sure).
You know, I used to really think that things that last "forever" were a good idea "all the time". Then I read the sci-fi book by John Ringo called "A hymn before battle". This had little to do with the story, but the general concept was a race that did make everything by master craftsmen and cost so much you had to mortgage them for ~ 150 years to pay for them, but part and parcel, they had a full warranty for the entire payment time and would last generally forever after they were paid for.
For some products and devices that would be great, but not for everything. The race was pretty much technologically stagnant.
Now, out of Sci-Fi for a minute. There are many things that wear out and have to be replaced that I wish I could just buy a better product. For instance, my charcoal grill rusted through and I had to buy a new one. Charcoal hasn't really changed for quite some time, and if the thing could be built to last outside for more than maybe 6 years, it would be great. I'd love to have it last decades. This holds for other items as well, such as a tractor wagon or wheelbarrow.
What it isn't so great for is things that could become demonstrably better somewhat frequently. For instance, I have a clothes steamer that I use to remove light wrinkles from clothes. I bought it about 3 years ago and it was fine. The issue is that it has a water reservoir that it heats up to create steam. This takes ~10 minutes to generate any steam at all and ~ 15 minutes to really get going. Then, it will shut off the heating element periodically to save power or prevent overheating... The problem is this basically shuts off the steam too. So I get 15-20 seconds of steam and 45 seconds of cool-down time.
I just bought a replacement steamer. It's a newer technology that uses some sort of pressurized system. It creates steam in 40 seconds and it's continuous. Now, the old one isn't broken, but I'm sure glad I didn't have a mortgage for x years for a "better built" one so I couldn't upgrade.
Another example is I have an Oreck Vacuum that I bought 2 years ago. It has a 21 year warranty. I see no reason to expect it won't last that long with them yearly (for free) cleaning it up and replacing any parts that are bad. But there are already new models that look prettier (aesthetics are important to many people, if not really to me) and have new features like UV lights on the bottom to kill germs. I don't personally think these features are or would be worth upgrading, but I put a lot of money into the existing vacuum and so wouldn't upgrade for a long time. In 10 more years I might well have to drop the existing investment that would work fine due to great maintenance, but is so far behind technologically I really want the new features.
One existing example is I have a ~ 6 year old Motorolla cell phone. It works fine, and I can replace the battery every 2 years or so for about $5 including shipping. It's strongly built and probably will continue to work for a few more years. However, it is absolutely blown away in functionality and uses by, say, an iPhone or Droid.
Finally, consider Cars. You already have ~5year loans to purchase one now. So look at how invested we are in oil to keep running our economy - wars etc because we can't get people to easily upgrade to a hybrid en-masse due to the cost and expected lifetime of most cars, which is over 10 years now on average, and I certainly see a lot of people going for 20 years. But people with a 20 year old car not only likely pollute more and require more gas, but don't have major safety features like anti-lock breaks, air bags, traction control, electronic stability control not to mention things like cruise control, back up cameras, auto-parallel parking, etc that are either standard or available on many cars now.
I don't like disposable junk, but there are good reasons to allow for reasonable cycles of new technology. I don't think it's a great idea to artificially try and freeze or slow down new tech either.
Opera, Proxomitron-Grypen,GPG 0x0A1C6EE3
I think he's talking about the modern-day religions, not the way they were 1000 years ago. Obviously, the two religions have changed significantly in that time. Back then, Muslims were very progressive thinkers, interested in math, science, art, etc., and Christians were oppressive and backwards. 1000 years later, the societies have changed places. Of course, there's a lot of Christians in the US especially who still favor oppression and hate science, but overall Western societies are more interested in science and freedom of expression, and Islamic societies are backwards and oppressive.
I don't think he's making any mistake at all. There's two issues: 1) the written version of a religion, which includes all the "holy" writings, and 2) the modern interpretation of the religion, which is how most of the followers currently practice it and live.
The Old Testament, which Christians still consider "holy", "the word of God", etc., has all kinds of rules prohibiting, for example, eating shellfish. Almost no Christian today follows these rules, though they usually do follow (or their Churches tell them to) the rule about tithing 10% of your income, which is written in the same place as the prohibitions against shellfish, pork, etc. Christian leaders have made up various contortionist arguments as to why some rules don't apply any more while other rules do.
Same goes for the Caste system. Sure, it may not be part of the official writings or whatever, but if most Hindus still practice it, then it's perfectly valid to say it's part of the Hindu religion. It's ridiculous to say that the majority of the followers of a religion are wrong about their own religion. The religion is what they make of it.
Of course, there's times where you have different factions of a religion, who interpret (or ignore) the writings differently. For instance, the Quran commands Muslims to convert others to Islam by the sword, to impose a tax on infidels, to kill anyone who leaves Islam, etc. Some, more moderate Muslims have dropped this stuff, while most, being more fundamentalist, still believe in that stuff.
So sometimes you just need to be a little more clear about what you're addressing or criticizing: the religions' writings or more fundamentalist side, or the practices of the majority of its modern-day adherents. But most of the time it really should be obvious from context.
CAIMLAS is exactly right in his reply to this. Yes, partisan bickering is definitely part of American culture; I say that as an American. It's what we currently do in America, so it's part of our culture. It's not something that just a few people (the politicians) do, it's something that MOST Americans do; just look at people's conversations, posts on message boards, etc. Partisan bickering is everywhere, and permeates American culture.
Similarly, child labor and toxic waste are part of Chinese culture. They practice those things at large scales, so it's a part of their culture. There's some good things about Chinese culture too, just like there's some good things about American culture, but these cultures also have these negative sides mentioned here.
... for an eventual return to U.S. manufacturing.
The pendulum continues to swing, as it ever has.
This is why China's government tries to control the information their people see on a daily basis. If the Chinese workers knew what we pay for the things they produce, they would also want it.
In a way, we're benefiting from China keeping the truth from their own people. Yes, there's billions more Chinese than us, but in the extreme long-term end-game, that means their vast natural resources may not keep up with ours. (Just a very wide-angle/big-picture view.)
They have to feed/house all of those folks. They already have controls on reproduction that the rest of the world finds "immoral". Now they took on our businesses contracts to make gadgets, and their workers marvel at these things they're building and shipping to us.
There's a backlash from that sooner or later for them, and a price jump that both stifles some of our unbridled "love affair" with cheap electronic crap, and also makes it profitable to make some of the items here again someday... or... perhaps, with Globalization, in the next poor country willing to say, "We'll learn how to make those things, if you'll fund the infrastructure."
The economic waves in the overall ocean can be slow and enormous, or small and powerful. And everyone's slapping the water trying to make the ocean do what they want it to, as if their hands or even a paddle is enough to make a significant change in the wave height.
+++OK ATH
The iPhone is made by Foxconn? Murdoch has a hand in it?
Think of how stupid the average person is, and realize half of them are stupider than that.
Wow. Look at what the language implies. He's also schockingly wrong, although it's not hard to see how he/she got so badly misinformed.
An excellent, rudimentary correction to our piss-poor history knowledge (and understanding of the historical influences of our culture) is "Lies my Teacher Told Me" by J.W. Loewen. I can't recommend it enough.