That/s pretty much true and in fact on-going in China. But it raises the question whether it is effective at all to manipulate one's currencies. Today, the Japanese Yen, Taiwanese Dollar, Korean Won, etc all have a lower exchange rates than that of Yuan. Yen is like 80:1 against USD, while Yuan is 6:1. But we don't seem to complain too much about Japanese manipulation of Yen. Why? Because the wage inflation in Japanese has pushed up the final cost. Today, inflation is running high in China; market force would have restored the true market costs which are not that high given there are something like 1 billion laborers. The cost advantage in China is mainly due to its massive supply of labor -- simple supply and demand.
Another interesting thing in China is the black market which is prevalent there. Like the Intel processors in most PCs are smuggled into China. Same for Yuan. Back in the early 1990's, the official rate was 3:1, but nobody exchanged at that rate. The black market rate at that time was 8:1, 2.5 times lower than official rate. Eventually, the Chinese government gave up and reset the rate to 8:1. Today, there is still the black market for currecies, but the rate is pretty much close to the official rate. (There are limited "white" markets for Yuan in Hongkong now, trading in amount of the billions of Yuan, at a slighly lower rate for Yuan.) Would that signal the official rate is in fact not too much different than what a free market would support?
The invisible hand exists even if the official market is not really free. And why didn't our politicians make such complain back in the 1990's but do now? It feels like the accusation are at least partially an excuse made up by our politicians to hide their own ineffectiveness.
Edy Jianto, general manager at Flextronics Electronics Technology (Suzhou) Co Ltd, estimated that many multinational companies enjoy a gross profit margin of between 50 to 60 percent while Chinese contract manufacturers have an average margin of around 3 percent.
Do you think you will place much emphasize in environment and labor conditions if your margin is only 3% and wouldn't you try to do whatever you can to circumvent the Chinese environmental and labor laws?.
Then they can just control the joint venture through complex license agreements, just like how McDonald's, KFC, baidu.com, and sina.com do in China. We certainly have plenty of lawyers to create the arrangement. Lawyers roam everywhere on earth. Rules, Chinese or American, are only for those who can't afford one.
Yes, but that's nothing new. It is the same everywhere as well. In the end, when the economy grows and there is a growing middle class which is definitely the case in China now, things will be improved. It is like you first create soemthing and then try to optimize it later. But it takes times, quite a lot of times.
If you read the TFA, the report is from China's Environment Ministry. If the (central) government wants to cover up, why would they release such a report. And in China, producing bad foods can be punishable by death sentence, as seen in the baby milk powder scandal a few years back. Like most other problems, the core of China's problem is that a) there are too much competition for jobs and businesses; b) higher governments have little control over the lower ones unless the problem gets real big, as the famous saying goes "Whenever there are policies up there, there are work around down below."
Like everywhere else, when (and only when) the problems hit front pages, the problem has reached their peak. These kind of reports are hitting media front pages everyday in China; just go visit one of the major Chinese Internet news portals. So they will be solved or reduced substantially, but it will take a long while to solve the problems. The core solution will be lowering the population and increasing per-capita income; both will drive lower the level of competition.
Some of the problems may also be exaggerated in today's media. For examples, if foods in China are poisonous or having excessive amount lead, we would expect people there to have much shorter life span or young people having IQ deficiency; but neither is true. China is facing population aging problem and lots of young people come to study in the Western world and get their Master's and Ph.D.'s. I think it is like gun problem in this country, it is a big problem but most people are still not really affected by it.
The problem I see. Every time something big happens, you will hear this and that person jumping out (in the news) to claim s/he had predicted it, yet nobody has ever noticed what that person had ever made.
My theory. People keep making various and typically vague predictions on the same thing from time to time. The one made the vaguely correct prediction would then jump out after the fact to show off his genius, even though he's only lucky.
I have yet to see anyone making repeated, accurate, detailed -- who, what, when, how, and why -- predictions about the market or the economy. Without track records, why would one really believe a random comment or article on the Internet?
One of my clients had their entire COMPANY cloned over there. They never produced anything there. They never outsourced anything there. They never even hired anyone from there. Someone simply set up a shadow company, expropriated all the logos, model names, etc and set themselves up in the business of building exact knockoffs.
Sounds like they have not set up any presence or registered their trademark there either. So why in the hell do you think their government should care about that? Try setting a complete knock-off of some brand-named Chinese products that are not sold here (Huiyuan Juice?) and see if anybody cares. The first step for protection is to pay up to lawyers and governments.
And the primary reasons we don't see many counterfeit products on the street stores here are
There aren't many (independent) street stores left over here, unlike in a 3rd world country. We only have large chain stores like WalMart, Target, Walgreens. And large chain stores are perfect targets of any kind of describable wrongdoings, because we also have...
A lot of lawyers. We have more lawyers than farmers. And lawyers need to eat, pay bills, get rich. But last I check, they mostly still can't just get money sitting idle. They have to look for someone to go after.
The level of competition (of jobs) in Western world is nothing comparing to that of 3rd world countries, even in the current state of economy. Competition drives up greed (of common people.) Greed leads to risk taking behaviors, then lower morals and ethics. if our economy continue to slide, you guss what will happen.
China is moving along to be a developed economy -- higher income, lower competition, more lawyers, more large companies. That's why they are fixing some of the 3rd world problems and getting some 1st world ones. But it will be a long march.
A country may try to control its currency value but the market at large has way to compensate for that. (Again for the specific of Yuan, look at the black market today.) Same for min wage. How much should the government force it to be? 1 million Yuan (~$150K USD)? Obviously it wouldn't work; businesses will just close and move. The whole min. wage idea is simply a PR gimmick by governments around the world to boost their image showing as if they really care. If you set it too high than what the market allows, then the Market will find ways to work around.
If they are not forcing the wage to be lower using real forcible mean, the actual wage, after currency adjustment etc., is whatever the labor market can accept. If it is something the market dictates, then even the most liberals will not consider it unfair. Only that, we refuse to look at whether that's just a market phenomena, because that situation hurts our own job prospects and we are wishing that it is the fault of their government.
The value of Yuan wouldn't be off too much from market value, when considering inflation and cost, like the Yen. So it is moot called it undervalued, if the market does not support higher value Yuan.
by declining to implement a minimum wage or a basic income
There is minimum wage in China, enforced more rigorously in recent years due to high living costs.
In theory, yes. The same could be said for those sitting in a coffee shop in San Francisco and Palo Alto. They could move to Nevada and live with lower expense. But they still flock to SF and the Silicon Valley with higher rent and expenses.
Why?
The creative ones in Estonia may have to work too hard on blue-collar jobs to express his creativity.
The culture in Estonia or even Japan may not be good fit for creativity.
There may not be as many businesses built on creativity due to lack of risk-seeking venture capitalists as well as good IP (patents) protection
The creative people will likely want to immigrate to the US (or which ever is the most prosperous next.) That's why > 50% of PhDs in the US are foreign born.
They have a billion people, and they aren't a democracy. That makes it very easy for them to have an underclass... China doesn't want high unemployment and is more than willing to undervalue their currency and cause their population to work for slave wages in order to keep them working rather than starting an uprising.
Well... except for the fact that they have a billion and are not a "democracy", the rest is pretty much questionable opinions (probably def to you by our mainstream media and politicians.)
Contrary to what people here believe, people in China are not forced to work for certain employers or at certain wage. If you don't like your employer and wage, you can quit and move on to find a better one; and people certainly are doing that everyday for the last 30 years since economic reform. It is simple supply and demand that drives down the wage. There are 500 million laborers! If they don't embark on the business of low end manufacturing, a lot more people will starve. If you run the Chinese government. what else can you really do to satisfy the 1 billion people? Put them on welfare? Where are the money come from?
The "undervalued currency" is also a myth. Chinese Yuan used to be officially 3:1 against USD before 1993, twice as high as today, but the black market demanded 8:1 and the government gave up and pegged the Yuan to the black market rate until this round of appreciation in 2005. Today the black market is still very vibrant (as there are still limits on exchanges) but rate is not much different from the official rate; signalling that the rate is about what the market can take. for most things in China, forget about the official figures; look at the black market.
Also its official rate may be low but the market adjust that by higher inflation -- currently stood at 6% with wage rising even faster. Think this way, the Japanese Yen is about 80:1 USD (go figure the exact,) but we don't complain too much. Why? Because inflation has caused the Japanese costs (real estate, labor) to match or exceed ours. The same is happening in China.
Actually what you said isn't quite true. Alibaba, along with most top Internet companies in China, are technically foreign companies. The holding companies are registered in Cayman Island and Bermuda; the operating subsidiaries are Chinese companies. These companies all have foreign investors including Silicon Valley venture capital. Alibaba, for example, is still 40% owned by Yahoo. Softbank also owns a big trunk.
The Chinese government's intend is to protect the market from foreign companies which have had huge financial powers; if unrestricted, these greedy foreign companies will just grab over the whole market when the domestic players were still young and vulnerable and Chinese people will stuck in low end manufacturing forever without marketing power.
But lawyers know how to work around the Chinese rules, like they do to US laws. So very often, those rules are ineffective in practice.
I read many years ago on Chinese media (can't find the source anymore) when they first launched Shenzhou that the docking port is imported from Russia for the explicit goal of compatibility with other vehicles as the Russian design is now the de factor standard.
You can argue all day which is the better way but the truth is that 1) for every country it's different and 2) the best solution is always somewhere in between the spectrum of capitalism and socialism.
There is no "best solution". More likely, things swing left and right from time to time. China, for example, was way too socialistic for its 30 years and caused economics to falter. They then embarked on capitalistic reform, that fix the laziness of people but have become too capitalistic and that caused social inequity and instability and so lately they have started to swing back and start enforcing business, labor, environment laws more and more and implementing more social welfare programs.
It is like an airplane does not flight straight but has to adjust its direction on its path. Once a country embarks on one direction, it will eventually go too extreme and then it will have to reverse its direction (often not noticeable) and then it will end up too extreme on the other side.
The company has borrowed $527 million of the $535 million Energy Department loan guarantee, Damien LaVera, the agency’s press secretary, said today in an e-mail.
Solyndra plans to include the Energy Department loan guarantee in its bankruptcy filing.
Good point. Just like we fly our spy planes next to the Chinese border they can't do anything. Maybe this is not "accidental". See we do online attack against our enemy hosted in your country. What can you do?
While it is true that the official rate has been pegged, it used to be pegged at much higher rate. But the black market rate was around 8:1 against the USD, and you could never find anyone trading with you at the official rates; neither you would sell your USD at the official rate. Eventually, around 1992, the government gave up and aligned the official rate to that of the much lower black market rate -- 8:1 has been the real market rate even though it is also the official rate. Recently, the rate has been up to 6.4:1 and that is the rate in the black market as well because one still cannot freely exchange either way. Like many things in China, you need to look at the black market. For example, the imports of foreign products such as microchips to China are much higher than the official numbers because lots of the products enter into China through smuggling.
Not to mention, this is the Chinese edition of Financial Times, a British publication. I believe the official Xinhua agency also ran a similar editorial but its main point is to attack the "double standard" Cameron was taking during the Arab spring movement.
In my original post, I raise the question that this is not a cyberwar but a marketing campaign aim to grab money from taxpayers around the world. Yet such important points are edited out by/.
Oh and in china you don't need to provide healthcare, and wouldn't want to anyway, since if your employees die due to disease you don't need to replace them and no one will do anything if you don't try to help.
The one-child policy is simply ineffective except to people having government or state-own company jobs. If you are one of those, like a relative of mine, you will lose your government jobs. (Note: that's a good thing -- the public employees should be the first to obey rules they set -- a rare case in China.) Otherwise, private employers don't care. If you violate the rule, you need to pay a fine; but if you are rich, you don't care that fine; if you are poor, nothing can be extracted from you. Most friends of mine in China have more than one children.
Slashdot Mirror
I believe Chian does not allow software patents.
and lots of inflation
That/s pretty much true and in fact on-going in China. But it raises the question whether it is effective at all to manipulate one's currencies. Today, the Japanese Yen, Taiwanese Dollar, Korean Won, etc all have a lower exchange rates than that of Yuan. Yen is like 80:1 against USD, while Yuan is 6:1. But we don't seem to complain too much about Japanese manipulation of Yen. Why? Because the wage inflation in Japanese has pushed up the final cost. Today, inflation is running high in China; market force would have restored the true market costs which are not that high given there are something like 1 billion laborers. The cost advantage in China is mainly due to its massive supply of labor -- simple supply and demand.
Another interesting thing in China is the black market which is prevalent there. Like the Intel processors in most PCs are smuggled into China. Same for Yuan. Back in the early 1990's, the official rate was 3:1, but nobody exchanged at that rate. The black market rate at that time was 8:1, 2.5 times lower than official rate. Eventually, the Chinese government gave up and reset the rate to 8:1. Today, there is still the black market for currecies, but the rate is pretty much close to the official rate. (There are limited "white" markets for Yuan in Hongkong now, trading in amount of the billions of Yuan, at a slighly lower rate for Yuan.) Would that signal the official rate is in fact not too much different than what a free market would support?
The invisible hand exists even if the official market is not really free. And why didn't our politicians make such complain back in the 1990's but do now? It feels like the accusation are at least partially an excuse made up by our politicians to hide their own ineffectiveness.
who are paid to "flood" internet sites with comments and reviews about various products.
all other media outlets around the world? Oh... one word difference. Replace 'comments' with 'articles'.
Well... it could well be that Apple or other hardware buyers low-bidding the Chinese manufacturers.
Edy Jianto, general manager at Flextronics Electronics Technology (Suzhou) Co Ltd, estimated that many multinational companies enjoy a gross profit margin of between 50 to 60 percent while Chinese contract manufacturers have an average margin of around 3 percent.
Do you think you will place much emphasize in environment and labor conditions if your margin is only 3% and wouldn't you try to do whatever you can to circumvent the Chinese environmental and labor laws?.
Then they can just control the joint venture through complex license agreements, just like how McDonald's, KFC, baidu.com, and sina.com do in China. We certainly have plenty of lawyers to create the arrangement. Lawyers roam everywhere on earth. Rules, Chinese or American, are only for those who can't afford one.
Yes, but that's nothing new. It is the same everywhere as well. In the end, when the economy grows and there is a growing middle class which is definitely the case in China now, things will be improved. It is like you first create soemthing and then try to optimize it later. But it takes times, quite a lot of times.
If you read the TFA, the report is from China's Environment Ministry. If the (central) government wants to cover up, why would they release such a report. And in China, producing bad foods can be punishable by death sentence, as seen in the baby milk powder scandal a few years back. Like most other problems, the core of China's problem is that a) there are too much competition for jobs and businesses; b) higher governments have little control over the lower ones unless the problem gets real big, as the famous saying goes "Whenever there are policies up there, there are work around down below."
Like everywhere else, when (and only when) the problems hit front pages, the problem has reached their peak. These kind of reports are hitting media front pages everyday in China; just go visit one of the major Chinese Internet news portals. So they will be solved or reduced substantially, but it will take a long while to solve the problems. The core solution will be lowering the population and increasing per-capita income; both will drive lower the level of competition.
Some of the problems may also be exaggerated in today's media. For examples, if foods in China are poisonous or having excessive amount lead, we would expect people there to have much shorter life span or young people having IQ deficiency; but neither is true. China is facing population aging problem and lots of young people come to study in the Western world and get their Master's and Ph.D.'s. I think it is like gun problem in this country, it is a big problem but most people are still not really affected by it.
Doesn't the evidence seem to indicate that it's a genuinely independent implementation of MIPS?
Because most of US already believe that everything that China made must be an exact replica of whatever we have.
The problem I see. Every time something big happens, you will hear this and that person jumping out (in the news) to claim s/he had predicted it, yet nobody has ever noticed what that person had ever made.
My theory. People keep making various and typically vague predictions on the same thing from time to time. The one made the vaguely correct prediction would then jump out after the fact to show off his genius, even though he's only lucky.
I have yet to see anyone making repeated, accurate, detailed -- who, what, when, how, and why -- predictions about the market or the economy. Without track records, why would one really believe a random comment or article on the Internet?
One of my clients had their entire COMPANY cloned over there. They never produced anything there. They never outsourced anything there. They never even hired anyone from there. Someone simply set up a shadow company, expropriated all the logos, model names, etc and set themselves up in the business of building exact knockoffs.
Sounds like they have not set up any presence or registered their trademark there either. So why in the hell do you think their government should care about that? Try setting a complete knock-off of some brand-named Chinese products that are not sold here (Huiyuan Juice?) and see if anybody cares. The first step for protection is to pay up to lawyers and governments.
And the primary reasons we don't see many counterfeit products on the street stores here are
China is moving along to be a developed economy -- higher income, lower competition, more lawyers, more large companies. That's why they are fixing some of the 3rd world problems and getting some 1st world ones. But it will be a long march.
The ultimate destiny of Democratic Process is Political Marketing. The ultimate destiny of Tyranny is a Revolution.
Choose one of the two.
A country may try to control its currency value but the market at large has way to compensate for that. (Again for the specific of Yuan, look at the black market today.) Same for min wage. How much should the government force it to be? 1 million Yuan (~$150K USD)? Obviously it wouldn't work; businesses will just close and move. The whole min. wage idea is simply a PR gimmick by governments around the world to boost their image showing as if they really care. If you set it too high than what the market allows, then the Market will find ways to work around.
If they are not forcing the wage to be lower using real forcible mean, the actual wage, after currency adjustment etc., is whatever the labor market can accept. If it is something the market dictates, then even the most liberals will not consider it unfair. Only that, we refuse to look at whether that's just a market phenomena, because that situation hurts our own job prospects and we are wishing that it is the fault of their government.
The value of Yuan wouldn't be off too much from market value, when considering inflation and cost, like the Yen. So it is moot called it undervalued, if the market does not support higher value Yuan.
by declining to implement a minimum wage or a basic income
There is minimum wage in China, enforced more rigorously in recent years due to high living costs.
In theory, yes. The same could be said for those sitting in a coffee shop in San Francisco and Palo Alto. They could move to Nevada and live with lower expense. But they still flock to SF and the Silicon Valley with higher rent and expenses.
Why?
The creative ones in Estonia may have to work too hard on blue-collar jobs to express his creativity.
The culture in Estonia or even Japan may not be good fit for creativity.
There may not be as many businesses built on creativity due to lack of risk-seeking venture capitalists as well as good IP (patents) protection
The creative people will likely want to immigrate to the US (or which ever is the most prosperous next.) That's why > 50% of PhDs in the US are foreign born.
...
Look at the big pitcure, dude!
They have a billion people, and they aren't a democracy. That makes it very easy for them to have an underclass ... China doesn't want high unemployment and is more than willing to undervalue their currency and cause their population to work for slave wages in order to keep them working rather than starting an uprising.
Well... except for the fact that they have a billion and are not a "democracy", the rest is pretty much questionable opinions (probably def to you by our mainstream media and politicians.)
Contrary to what people here believe, people in China are not forced to work for certain employers or at certain wage. If you don't like your employer and wage, you can quit and move on to find a better one; and people certainly are doing that everyday for the last 30 years since economic reform. It is simple supply and demand that drives down the wage. There are 500 million laborers! If they don't embark on the business of low end manufacturing, a lot more people will starve. If you run the Chinese government. what else can you really do to satisfy the 1 billion people? Put them on welfare? Where are the money come from?
The "undervalued currency" is also a myth. Chinese Yuan used to be officially 3:1 against USD before 1993, twice as high as today, but the black market demanded 8:1 and the government gave up and pegged the Yuan to the black market rate until this round of appreciation in 2005. Today the black market is still very vibrant (as there are still limits on exchanges) but rate is not much different from the official rate; signalling that the rate is about what the market can take. for most things in China, forget about the official figures; look at the black market.
Also its official rate may be low but the market adjust that by higher inflation -- currently stood at 6% with wage rising even faster. Think this way, the Japanese Yen is about 80:1 USD (go figure the exact,) but we don't complain too much. Why? Because inflation has caused the Japanese costs (real estate, labor) to match or exceed ours. The same is happening in China.
Actually what you said isn't quite true. Alibaba, along with most top Internet companies in China, are technically foreign companies. The holding companies are registered in Cayman Island and Bermuda; the operating subsidiaries are Chinese companies. These companies all have foreign investors including Silicon Valley venture capital. Alibaba, for example, is still 40% owned by Yahoo. Softbank also owns a big trunk.
The Chinese government's intend is to protect the market from foreign companies which have had huge financial powers; if unrestricted, these greedy foreign companies will just grab over the whole market when the domestic players were still young and vulnerable and Chinese people will stuck in low end manufacturing forever without marketing power.
But lawyers know how to work around the Chinese rules, like they do to US laws. So very often, those rules are ineffective in practice.
Are the docking ports compatible?
I read many years ago on Chinese media (can't find the source anymore) when they first launched Shenzhou that the docking port is imported from Russia for the explicit goal of compatibility with other vehicles as the Russian design is now the de factor standard.
You can argue all day which is the better way but the truth is that 1) for every country it's different and 2) the best solution is always somewhere in between the spectrum of capitalism and socialism.
There is no "best solution". More likely, things swing left and right from time to time. China, for example, was way too socialistic for its 30 years and caused economics to falter. They then embarked on capitalistic reform, that fix the laziness of people but have become too capitalistic and that caused social inequity and instability and so lately they have started to swing back and start enforcing business, labor, environment laws more and more and implementing more social welfare programs.
It is like an airplane does not flight straight but has to adjust its direction on its path. Once a country embarks on one direction, it will eventually go too extreme and then it will have to reverse its direction (often not noticeable) and then it will end up too extreme on the other side.
The company has borrowed $527 million of the $535 million Energy Department loan guarantee, Damien LaVera, the agency’s press secretary, said today in an e-mail.
Solyndra plans to include the Energy Department loan guarantee in its bankruptcy filing.
How much is the difference? Can you calculate?
Good point. Just like we fly our spy planes next to the Chinese border they can't do anything. Maybe this is not "accidental". See we do online attack against our enemy hosted in your country. What can you do?
While it is true that the official rate has been pegged, it used to be pegged at much higher rate. But the black market rate was around 8:1 against the USD, and you could never find anyone trading with you at the official rates; neither you would sell your USD at the official rate. Eventually, around 1992, the government gave up and aligned the official rate to that of the much lower black market rate -- 8:1 has been the real market rate even though it is also the official rate. Recently, the rate has been up to 6.4:1 and that is the rate in the black market as well because one still cannot freely exchange either way. Like many things in China, you need to look at the black market. For example, the imports of foreign products such as microchips to China are much higher than the official numbers because lots of the products enter into China through smuggling.
Not to mention, this is the Chinese edition of Financial Times, a British publication. I believe the official Xinhua agency also ran a similar editorial but its main point is to attack the "double standard" Cameron was taking during the Arab spring movement.
In my original post, I raise the question that this is not a cyberwar but a marketing campaign aim to grab money from taxpayers around the world. Yet such important points are edited out by /.
Oh and in china you don't need to provide healthcare, and wouldn't want to anyway, since if your employees die due to disease you don't need to replace them and no one will do anything if you don't try to help.
Surprise! They may get better healthcare than most Americans do pretty soon. See http://www.thelancet.com/series/health-system-reform-in-china
The one-child policy is simply ineffective except to people having government or state-own company jobs. If you are one of those, like a relative of mine, you will lose your government jobs. (Note: that's a good thing -- the public employees should be the first to obey rules they set -- a rare case in China.) Otherwise, private employers don't care. If you violate the rule, you need to pay a fine; but if you are rich, you don't care that fine; if you are poor, nothing can be extracted from you. Most friends of mine in China have more than one children.