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The Dystopian Lake Filled By the World's Tech Sludge
New submitter trevc sends this story from the BBC:
Hidden in an unknown corner of Inner Mongolia is a toxic, nightmarish lake created by our thirst for smartphones, consumer gadgets and green tech. The city-sized Baogang Steel and Rare Earth complex dominates the horizon, its endless cooling towers and chimneys reaching up into grey, washed-out sky. Stretching into the distance, lies an artificial lake filled with a black, barely-liquid, toxic sludge. ... You may not have heard of Baotou, but the mines and factories here help to keep our modern lives ticking. It is one of the world’s biggest suppliers of “rare earth” minerals. These elements can be found in everything from magnets in wind turbines and electric car motors, to the electronic guts of smartphones and flatscreen TVs.
We're able to produce most of what we use, including rare earth minerals, without creating toxic sludge lakes. The only reason we send all of these industries to China is to because their lax environmental and labor laws allow cheaper production, and thus higher profit margins.
Not correct, or at least not completely true. The primary reason China has captured a lot of manufacturing business is because they have a large supply of cheap labor. And most of the reason it is cheap is precisely because the supply is so large - economics 101 stuff. Lots of laborers competing for jobs keeps wages suppressed. You are correct however that lax environmental policies do play a role in some industries as well. Stuff like glass, steel, etc can be pretty rough on the environment and not having to pay for these externalities can be a competitive advantage. China doesn't have a bad pollution problem just by coincidence. That is the result of decades of sacrificing the environment to boost wages and build industry. (It also has a lot to do with the number of dirty coal fired power plants they use)
Studies (which I'm too lazy to look up, but I'm sure others can find easily) show that it doesn't cost that much more to make goods in the US and Europe, labor and environmental regulations and all.
Depends strongly on what exactly you are producing. I run a manufacturing company. Whether something costs more to make in China versus the US depends primarily on the labor content of what is being produced. Labor intensive goods tend to get produced in low labor cost countries. Capital intensive goods tend to get produced in capital efficient (usually high labor cost) countries. It's obviously not quite that simple but it's a good first approximation. Stuff that can be automated or which has a lot of IP content tends to stay domestic. Stuff that requires the lowest possible labor costs tends to migrate elsewhere.
The outsourcing of manufacturing hasn't even significantly dropped retail prices much, though profit margins (and net profits) are at record highs across most industries.
Hasn't dropped retail prices much? A quick trip through Walmart should disabuse you of that notion. I've quoted jobs for stuff that is sold through Walmart. The target prices sometimes were below our cost of materials. Much of that cost savings is being passed on precisely because that is Walmart's business model - to be a price leader you have to pass on savings to customers or someone else will. If you think manufacturers are keeping all those profits from offshoring then you are very, very mistaken.
Profit margins are sometimes higher on domestically manufactured goods because of selection bias. The companies that are left are generally those which are not in labor intensive industries where offshoring makes sense due to intense price competition. The ones that are left are those that can for one reason or another protect their margins. Sometimes through IP, sometimes through capital efficiency, sometimes through automation, sometimes due to customer requirements, sometimes due to regulations. The US manufacturing sector is roughly the same size as China's when measured in dollars so plenty of stuff gets made here. Just not your McDonalds happy meal toys.